Environmental Law

Cole Schotz's Environmental Law Department, the largest environmental practice group in Bergen County and one of the largest in New Jersey, has extensive experience with the environmental aspects of real estate, corporate and business transactions across the nation. Perhaps our greatest strength is in helping clients who are selling, buying, leasing, financing or developing property to avoid or manage environmental liability so that their goals are achieved. This is accomplished by knowing the full range of options that are available and using them creatively to overcome whatever barriers may arise.

Many properties that are the subject of transactions today are contaminated. We believe the contamination should seldom be an obstacle to closing the transaction, so long as the client understands the nature of the risk and is comfortable with what has been done to protect against it. We routinely coordinate due diligence and environmental site assessments to get a thorough understanding of the facts, the law, and to allow our clients to make the best decisions concerning how to proceed. We have identified some of the most experienced and cost-effective consultants available to address the issue that needs to be resolved and recommend them to the client as needed.

One of the greatest obstacles to closing a transaction involving contaminated property is to make all the parties comfortable with how they are going to pay for a cleanup which is much more expensive than was anticipated when they signed the contract or closed the deal. Securing the cost of the "worst case scenario", so that the buyer, seller and the lender are willing to proceed, is often a significant challenge. The Environmental Law Department has negotiated environmental insurance policies for over one hundred properties, so that the closing of title and the development and use of the property could proceed before the cleanup is completed. Our extensive experience with insurance companies and brokers that specialize in environmental insurance has allowed us to routinely make the use of innovative approaches.

We have substantial experience advising clients concerning the cleanup of contaminated properties under the various state and federal laws which require such cleanups. Our goal is to help clients avoid or minimize the cost of the cleanup. For example, we have obtained many millions of dollars from the client's insurance companies under the typical business liability insurance policy, as well as from prior owners and operators of the property, to help pay for the cleanup. We ordinarily try to avoid litigation to get this money paid by demonstrating to our adversary that we have a full command of the issues to try to convince them that little will be gained through litigation. However, if litigation is needed we have the experience to consistently obtain a favorable result.

Another approach we have used to help clients avoid cleanup costs is to pursue the brownfields funding available from state and federal governments to pay those costs. We have obtained brownfields approvals for several client's projects, both big and small, that have resulted in governmental approval for our clients to recover many millions of dollars of remedial costs.

We regularly assist our clients with commercial, industrial and residential development of property, including contaminated property. We help obtain permits or approvals to develop in or near wetlands, streams, the Highlands and in coastal or waterfront areas, as well as to address stormwater, vapor intrusion and other site development issues.

Our daily involvement with the broad array of environmental issues keeps us on top of the latest developments in the law and the marketplace, so that when some impediment arises we can offer the client the full range of options so that the best choice can be selected to accomplish the client's objective.

Real Estate and Commercial Transactions

• Counsel clients who are selling, buying, leasing or financing real property on how to avoid or minimize liability under environmental laws; have handled over 1,500 transactions
• Coordinated due diligence and environmental site assessments of real estate on hundreds of projects
• Use creative ways to close transactions involving contaminated properties
• Assist clients with purchase of environmental liability insurance for over 100 properties

Environmental Remediation and Cost Recovery

• Counsel clients performing cleanups under state and federal laws, including the New Jersey Spill Act and the Industrial Site Recovery Act (ISRA), the federal Superfund law, and underground storage tank laws
• Help clients to recover, or avoid spending, costs of environmental remediation
• Have obtained funds under most federal and state government programs to help clients pay for cleanups, including brownfields funding
• Determine if insurance coverage is available to pay for cleanup costs and pursue payment from insurance company 

Real Estate Development

• Assist clients with commercial, industrial and residential development of contaminated properties, using benefits of recent brownfields laws
• Obtain permits to develop in or near freshwater and coastal wetlands, waterfront or coastal areas, streams, flood plains, the Hackensack Meadowlands, the Pinelands and areas subject to riparian claims by the state

Environmental Litigation

• Handle disputes over responsibility to clean up environmental contamination
• Settled many cases without need for litigation by demonstrating command of key issues to opposing parties
• Contest matters between clients and governmental agencies, such as defending against penalty assessments

Operation of Manufacturers and Other Environmentally Sensitive Businesses

• Water and air pollution control permits
• Management of solid and hazardous waste
• Compliance with worker and community right-to-know laws
• Occupational Safety and Health Act (OSHA) matters
• Extensive experience in gasoline service stations, automotive dealerships, dry cleaners, composting and recycling facilities, and transfer stations

• The firm successfully negotiated a contract for a client to purchase a former manufacturing facility that had known hazardous substances contamination. Under the contract, the client was obligated to accept the property “as is” and to protect the seller from future cleanup costs. During due diligence, environmental investigation was undertaken in order to better estimate the cost of the cleanup. In order to cap the client’s total exposure for cleanup costs, the firm negotiated on behalf of the client a Guaranteed Cleanup Cost Contract with an environmental consultant. Under that contract, the consultant agreed to cleanup the known environmental liability for no more than $549,640. Any cleanup costs above that amount would be paid for by the consultant. Since the Guaranteed Cleanup Cost Contract only covered known contamination, the firm negotiated an environmental insurance policy with AIG Environmental Insurance Company to protect the client against any future costs associated with unknown contamination at the property that could be discovered at a later time. The policy also covered any third-party claims for property damage or bodily injury, arising on- or off-site, from either known or newly discovered contamination. With these protections in place, the client was pleased to close title to the property.

• Cole Schotz represented a client in an $8.5 million acquisition of a manufacturer of precision mechanical components. The firm was instrumental in overcoming significant environmental liability obstacles associated with the acquisition. These obstacles included complex compliance issues and the existence of a multi-million dollar cleanup of the company’s main operating facility. Our client succeeded in acquiring the assets of the business within its strategic time frame. We also succeeded in obtaining the protection of environmental indemnities and cleanup obligations from the seller, guaranteed by its well-known and well-financed parent. In addition, we represented the client as local corporate and real estate counsel and assisted with the negotiation of complex acquisition and financing transaction documents.

• The firm represented a client which owned a contaminated property on U.S. Route 1. In order to convince a major automotive dealer to lease the premises before the cleanup was completed, we negotiated a Guaranteed Cleanup Cost Contract with an environmental consultant pursuant to which the consultant agreed to complete the remediation of the property for no more than a sum certain, the “guaranteed cleanup cost”. We then approached AIG Environmental Insurance Company and negotiated an environmental insurance policy which included cost cap coverage, pursuant to which the guaranteed cleanup cost serves as the deductible and AIG provides coverage for cleanup cost overruns in the amount of twice the guaranteed cleanup cost. On this basis, the automotive dealer tenant agreed to take possession of the property and start paying substantial rent even though the groundwater cleanup had not been completed.  

• The firm represented a national television network in connection with its local affiliate's application for municipal approvals to locate antennas on the building it occupies. Locating the antennas on the roof of the building, which houses the station's studios and offices, is critical to the station's operations and security. The application faced organized community opposition and required extensive expert testimony in support of our client's position. Following numerous hearings, the municipal zoning board preliminarily denied the application, but provided our client with an opportunity to address issues raised by the opposition. We filed an appeal of the board's preliminary denial and entered into negotiations with the opponents, the zoning board and the building owner. On the basis of the record created in the application and subsequent negotiations, we were successful in achieving a settlement that allowed the antennas to be located on the roof of the station's building.

• The firm submitted one of the first exemption applications to the New Jersey Department of Environmental Protection under the newly enacted Highlands Water Protection and Planning Act, a law which strictly limits development in the New Jersey Highlands, which includes all or parts of Bergen, Passaic, Morris, Hunterdon, Warren, Somerset and Sussex Counties. The application resulted in one of the first exemptions granted by the DEP under the Highlands Act. The Act was signed into law the month before the exemption was granted, and had the Act applied, it would have completely blocked the client’s proposed development.  

• One of the firm’s clients had expended considerable cleanup costs for the remediation of a contaminated property in New Jersey. Without resorting to litigation, we notified the client’s past business liability insurance carriers of the claim and negotiated a settlement for a substantial portion of the client’s costs. 

• The state of Ohio had obtained a Default Judgment against our client in excess of $5 million in civil penalties for the improper maintenance of oil and gas wells and for various violations of state environmental laws. The state of Ohio proceeded to enter a judgment against our client in the New Jersey court system. In lieu of the $5 million penalty, we successfully negotiated a settlement with the state of Ohio Attorney General’s Office and the Ohio Department of Natural Resources that provided for an administrative penalty of $10,000 and a complete Release and Satisfaction of Judgment Liens in Ohio and New Jersey.

• On behalf of a large retail client, we successfully negotiated an Agreement to Reimburse for Remediation Costs under the Brownfields and Contaminated Site Remediation Act with the New Jersey Department of Commerce and the New Jersey Department of Environmental Protection. The Agreement provides for the state to reimburse our client for up to 75% of the remediation costs necessary for the redevelopment of a site located in an Urban Enterprise Zone in Newark. The project involved the condemnation by Newark of a large parcel consisting of residential, commercial and industrial properties to allow for the proposed retail development.

• Environmental Land Use Permits in New Jersey in 2008

• Environmental Bulletin
• Establishing a Compensable Taking Under the Highlands Act, New Jersey Law Journal
• Failing to Obtain the Necessary Permits Could Lead to Large Fines, Cole Schotz Docket
• New Challenges for Developers, New Jersey Law Journal
• NJDEP Issues New Grace Period Rules and Steps Up Enforcement, Cole Schotz Docket