NJ’s Highlands Act ’Red Zone’ Debate Heats Up

Tue June 01, 2004 - Northeast Edition
James Van Horn

The Highlands Act currently before the New Jersey State Legislature is both high-profile and high-stakes. For the state’s construction community, it’s probably the biggest state-government-related issue in the past 15 years. And it could dramatically alter — or more to the point, not alter — the landscape of one of the last undeveloped and unregulated areas of the state.

The Highlands Water Protection and Planning Act seeks to protect a huge swath of northern New Jersey from further development, while proposing a master planning process for an equally large portion, mainly to protect water supplies. The original act stems from the March 2004 report of the Highlands Task Force established in September 2003 by New Jersey Gov. James McGreevey. It characterized the Highlands as “a 1,250 square-mile area that stretches across the northwestern part of the state. The Highlands is noted for its rugged hills, lush forests, pristine streams and lakes, and large, undeveloped scenic lands,” as well as more than 90,000 acres of farmlands. The region extends from Phillipsburg to Mahwah and lies within portions of seven counties (Hunterdon, Somerset, Sussex, Warren, Morris, Passaic and Bergen) and 90 municipalities.

The key point, according to the task force, is that “Over half of New Jerseyans get their drinking water from the Highlands. The municipalities in the Highlands derive 100 percent of their water from the Highlands. Outside the Highlands, more than 900,000 people in urban areas, such as Newark and Jersey City, get their water from the Highlands as do more than 800,000 people in Somerset, Mercer, Middlesex and Union Counties. Overall, drinking water sources in the Highlands yield approximately 400 million gallons per day.”

The 20-person task force consists of state, county and local government officials, as well as people with interests in conservation, farming and development; one member is Joe Riggs, region president, K. Hovnanian Companies, headquartered in Red Bank, NJ.

In addition to examining initiatives in water, open space, farmland preservation and other resources, the task force was asked to look at “provision of smart-growth opportunities, including economic development and redevelopment in the Highlands region through regional planning, including coordination of transportation infrastructure investments and administrative agency activities, consistent with the State Development and Redevelopment Plan.”

The latest version of the Highlands Act puts 395,000 acres in a so-called protected area. Of this area, 171,000 acres is already protected in some form (state parks, wildlife management areas, etc.); 79,000 acres is already developed or committed to it; 145,000 acres or 226 sq. mi. of non-developed, non-protected land is what the bill now proposes to shield from major new developments. (Current residents in this area would still be able to do things like put in a deck.) The planning area, where preservation regulations do not apply, covers 363,000 areas.

The sticking point is the preservation area, in which, according to the Act, “municipalities would be required to conform their master plans and development ordinances with the regional master plan developed by the Highlands Water Protection and Planning Council and in which the strict Department of Environmental Protection permitting requirements would apply.”

It “will be delineated based upon natural resource data assembled by the United States Forest Service, Rutgers, The State University, and the New Jersey Water Supply Authority.”

Because the Highlands is a hilly area where rocky, wooded, silent glens, settlements dating back approximately 300 years, farms and burgeoning construction lie within a mile of each other, the boundaries between the preservation and, the planning areas zig, zag, zig-zag, then double back on each other. This creates a platform for bargaining — trading so many thousands of acres of preservation for this many thousands of planning only.

Consequently, much of the current debate and amendment-seeking centers on moving land into and out of the preservation area (also called the “red zone”). And much of northern Sussex County lies outside both the preservation and planning areas. Although the prime mover of the Highlands Act is Gov. McGreevey, politicians of both parties support the bill, as well as residents of the state who get their water from the Highlands.

Proponents say the Act will safeguard the water supplies for half the state’s population, while combating sprawl and preserving valuable open space — supporters claim approximately 5,000 acres a year are being lost to development in the Highlands — and a fragile environment in what is already the most densely populated state in the country. (See “Suburban Sprawl Continues at Breakneck Pace,” in the Jan. 14, 2004 issue of Construction Equipment Guide.)

Opponents include Highlands area residents and town officials, those concerned about erosion of home rule and increasing state regulation, some in South Jersey smarting over the Pinelands development moratorium, and, probably the largest group, people in building and construction, including equipment dealers and subcontractors, who see it as a serious setback to growth initiatives.

The bill (identical versions were originally introduced in both New Jersey Senate and Assembly), as of Memorial Day weekend, is making its way through the New Jersey legislature. The Assembly Environment and Solid Waste Committee reported its version of the bill, with considerable amendments, out of committee and sent it to the Assembly Appropriations Committee. (Many of these amendments, such as funding “transfer of development rights” or TDR, for vacant land, were attempts to mitigate some provisions of the original measure.) The Senate’s bill is still in committee.

Using the Highlands as a source of drinking water began more than 100 years ago, when public health officials in the state’s burgeoning urban areas identified local water supplies as both inadequate and the source of infections such as typhoid fever.

Rather than relying on then almost-nonexistent water treatment technology, they opted for clean, remote water supplies linked to the cities by pipeline. Helped by the mountainous, rocky terrain, cities such as Newark and Jersey City built reservoirs where snow and rain provided a year-round supply of clean water. They were joined by other city and regional water authorities.

Later, conflicts between water supply needs and development led to state government intervention. In the early 1970s, housing developments in the Parsippany-Troy Hills area of Morris County shut down precipitously, practically in the middle of a shift, as the result of a court finding of imminent environmental threat to the Jersey City drinking water reservoir, located in the midst of the development area. This problem was resolved and residential and commercial development resumed.

However, this was a temporary blip compared with the Pinelands Development Act of 1979 and the Freshwater Wetlands Initiative of 1987. The former permanently blocked any major development — and put strict controls on development in any form — in a wide swath of the Pinelands area of southern New Jersey, again in the name of preserving a major aquifer. The Wetlands Initiative, among other consequences, put a stop to the not uncommon New Jersey practice of siting residential and commercial developments in swamps.

More significant, in both instances, when the New Jersey legislature initially balked at passing the measures, due in part to conflicts among interest groups, then-governors Democrat Brendan Byrne and Republican Thomas Kean each (environmental concerns trumping political affiliations) issued executive orders promulgating the regulations, bypassing the legislature.

Now, almost in deja-vu, the Highlands Act is currently stalled in the Senate reportedly due to objections by State Senator Stephen M. Sweeney, D, Thorofare. The senator has been accused of acting on behalf of builders, but a spokesman for Sweeney said the senator “has been fighting to right the wrongs of the Pinelands and avoid repeating the same problems with the Highlands. Those are his sole motives.”

This could set the stage for unilateral executive action by McGreevey. He has the Byrne and Kean precedents, his popularity is currently on the upswing, there is a projected rise in tax revenues, his party controls both houses of the legislature, and “saving the Highlands” could appeal to at least half the state’s voters when he comes up for reelection in 2005.

So when the New Jersey Alliance For Action recently convened “The Highlands and Governmental Regulations Forum” to discuss the Highlands Act, the mood was serious. (Founded 30 years ago, the Alliance for Action is a statewide nonprofit and nonpartisan coalition of more than 600 business, labor, professional, academic and government organizations. The Alliance is headquartered in Edison and also has 13 county chapters.)

The forum was intended to give those with a stake in the Highlands an opportunity to listen to and then quiz people both in McGreevey’s cabinet and on the task force who helped shape the current proposals.

Richard F.X. Johnson, a partner of the Matrix Development Group, Cranbury, NJ, an industrial and commercial developer, set the stage for the discussion of the Highlands by saying, “Everybody is for protecting the Highlands — ’how’ is the question. The consequences of inaction at this point, a crucial point time-wise, are greater than the consequences of action.

“The state of New Jersey is going to grow at an average of one percent per year no matter what we do or don’t do about it.” He also pointed out that if legislation is passed that results in a flurry of lawsuits, “what good is that?”

Barbara Lawrence, executive director, New Jersey Future, cited estimates particularly dire to the municipal utility authorities, a number of whose representatives were present: it will cost “$25 billion to $30 billion to treat drinking water in the future if no action on the Highlands is taken.”

The issue of funding, of course, was not overlooked; as Johnson noted, “What we don’t need right now is another unfunded mandate” from government. Brad Campbell, commissioner of the New Jersey Department of Environmental Protection, claimed there is at least $100 million available for such expenditures as purchase of affected properties and TDRs.

In addition, it has been proposed to tap the state’s realty transfer tax. (Looming in the background was the recent disclosure that New Jersey tax collections may be $700 million higher than anticipated this year.)

One contractor in the forum audience suggested a water tax to pay for the plan — presumably taxing water users who would benefit from the Act. Murmurs of approval in the audience indicated this was indeed a point to consider. Later one wag, in reference both to McGreevey’s recent proposal to increase state income taxes for only the highest brackets, and the “high-end” new residential developments in the Highlands, suggested a “millionaires’ water tax.”

Another audience member, John Clearwater, director of the Construction Industry Advancement Association, Edison, NJ, suggested that “we could use some incentives to get things done as well as stopping them — are we working as hard on this approach?,” a question for which there was no readily apparent answer.

However, Lawrence pointed out a key feature of the legislation: the preservation area is mandatory, while the planning area is voluntary. She noted this was a compromise the bill’s authors have used to bring about greater consensus. When this approach was used in the Pinelands, it set aside large contiguous tracts of flat, undeveloped farmland and forests.

(The Freshwater Wetlands Act protects wetlands meeting specific criteria, no matter what their location.) But in the Highlands the preservation and the planning areas change every half mile or so.

This split may easily be one of the drawbacks of the current plan for Highlands area residents. Assemblywoman Connie Myers, R, Milford, said, “This bill will not save the Highlands. It will divide them. It will force farmers off their lands both in the preservation area, which will be under the control of the Department of Environmental Protection and in the planning area, which is targeted for growth incompatible with farms. It will result in high density housing in some areas while other areas are preserved as parks for all of the new people who will move here.” (Warren County Reporter, May 21, 2004.)

Myers also has said there are other initiatives to preserve land and protect water in the Highlands that have not been considered. New Department of Environmental Protection storm water regulations and new laws that allow money from the Farmland Preservation, Green Acres and the Environmental Infrastructure Trust to buy land for water protection have not been given time to work, she said.

Concerning the Highlands Act’s negative impact on the ability of building and construction to accommodate the state’s growth, at least one speaker did mention the growing opportunities in urban construction, particularly in “brownfields” — formerly contaminated industrial sites that have been or will be remediated — and replacing obsolete housing. In fact, there is major residential construction and reconstruction going on now in the Ironbound section of Newark and the areas around and east of Route 1 in Elizabeth.

But this may be scant consolation for contractors with an established business stake in Highlands area development.

One government participant, Jack Lettiere, commissioner of the New Jersey Department of Transportation, sounded a conciliatory, positive note in what seems to be brewing as a major showdown between the governor and private interest groups.

“We won’t fall off the cliff next month if no action is taken. The Highlands is not something that will be a disaster tomorrow. But there is this window of opportunity; there’s a lot to be lost here if there is inaction.

“This issue is too large an issue for politics. If this goes the way things do in New Jersey, something will be done. ”