Highlands Development Still in Limbo

In August 2004, only days before announcing he was leaving office early, then Governor Jim Mc Greevey signed into law the Highlands Water Protection and Planning Act (the “Highlands Act”). Although a clearly well-intentioned attempt to positively impact the quality of drinking water for many New Jersey residents, the Highlands Act immediately created havoc for the 88 municipalities affected. Worse still, with almost 900,000 acres included in this new “region”, countless private property owners were left to find their way through a new and uncharted regulatory morass. In an article on the Highlands Act, the New York Times estimated that “hundreds of thousands of New Jersey residents [were] caught in this collision between water, money and politics….” New York Times, January 15, 2007.
The Highlands Act created two distinct areas within the new Highlands region. Within the “Preservation Area”, development is strictly regulated. In the somewhat less scrutinized “Planning Area”, development consistent with the Act’s intentions is arguably encouraged. Suddenly, countless private properties that previously were subject only to the limits of municipal zoning were now burdened in a manner that might completely preclude development. However, to date, the Highlands Council has yet to finalize the Regional Master Plan governing exactly which properties are in the Preservation and Planning Areas. Six well attended public hearings have been conducted by the Council at locations throughout the region. Former NJDEP Commissioner John Weingart, now head of the Highlands Council, indicated the Council is now trying to complete the Master Plan by November. Until it does, the status of a land mass roughly equivalent to the entire State of Rhode Island remains in limbo.

Despite a clear potential for regulatory confiscation of property rights, no compensation mechanisms for funding such takings were considered as part of the Act. While some federal monies have come to the table, financial resources to fund these potentially massive property confiscations are woefully inadequate. Added to this lack of funding is the continued inability to put forth a Regional Master Plan. In essence, takings have occurred but landowners could be effectively precluded from filing claims because administrative remedies cannot be exhausted. This veritable Catch-22 continues to plague many affected property owners. We understand that several cases are working through the New Jersey court system as we go to press. We will keep you apprised of any legal precedents of importance in this area.

James E. Jaworski is the Administrative Partner of WJ&L. He also heads up our Real Estate Department and actively practices in the Land Use and Development areas.

James E. Jaworski is a Partner at Wells, Jaworski & Liebman, who practices primarily in the Land Use and Real Estate areas.

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