Christie Administration
revamps lease process
for state
lands; ensures consistent method
to
minimize environmental impacts
and ensure fair compensation to
the state
(Trenton) - DEP
Commissioner Bob Martin and NJDOT
Commissioner James Simpson today
unveiled a comprehensive set of guidelines
that revamps and modernizes New
Jersey's policies regarding the leasing
of State lands. It creates a fairer,
simpler and consistent process
that will minimize environmental impacts
while ensuring the State is fairly
compensated for leases, particularly
from private utilities that run
pipelines, cables, transmission
lines and telecommunications towers
across or under hundreds of miles
of State-owned land and water.
The new policy, to be adopted
by all State agencies, rectifies
inconsistent policies and fee schedules
that are outdated and prevent the
State from realizing fair compensation
for legitimate private use of State
land, much of which has been preserved
as open space, wildlife habitat,
or for recreational use.
The new policy will be more efficient
and less expensive for State agencies
to implement, will ensure that
taxpayers receive fair market value
for these leases, and will allow
businesses to know with certainty
what leases will cost.
The guidelines come from an interagency
panel convened last year in the
wake of the Tennessee Gas Company's
pipeline lease. That lease was
drawn up by the DEP and amended
and approved in July 2010 by the
Statehouse Commission, based on
policies that had not been updated
or restructured for decades.
"The State's process for
valuing leases was long overdue
for a major overhaul,'' said DEP
Commissioner Bob Martin. "This
is our opportunity to bring this
system up to date, to provide more
predictability for business and
to get the best deals and most
fair compensation for the people
of New Jersey.''
"Our top priorities at DEP
are protecting the State's air,
water, land and natural resources,
and that includes safeguarding
our State parks and natural lands
-and this policy will discourage
traversing those lands when there
is a viable alternative,'' Commissioner
Martin said. "But when those
lands must be used for purposes
that serve the public interest,
we must get compensation appropriate
to the value of the use, while
also being fair to businesses and
entities that need to cross State-owned
property.''
The DEP alone owns 800,000 acres
of parks and fish and wildlife
habitats that are crossed in many
areas by utility lines.
Commissioners Martin and Simpson
said an improved process would
allow businesses to better predict
and understand costs associated
with leasing State lands. The new
guidelines also will encourage
businesses to minimize any potential
environmental impacts.
"The use of a square footage-based
rate provides a strong financial
incentive for sponsors of linear
projects through preserved lands
to reduce their environmental footprint,
which will lead to reduced impacts
to our land and water resources,''
said Ben Witherell, DEP Director
of Economic Analysis and chairman
of the interagency work group that
considered the issue.
In addition to compensation for
leasing property, businesses and
utilities that cross State lands
also provide substantial non-monetary
compensation to the State, such
as replacement of disturbed lands
and reforestation.
Most of the new guidelines will
be implemented by State agencies
immediately. Key points:
- Appraisals of State land for
the purposes of valuing private
use leases will consider the
intended use of the land.
- No
new "in perpetuity''
leases will be issued.
- All
leases, especially those
with renewal clauses, will include
an annual inflation adjustment
of at least 2.5 percent.
- Linear corridor leases for
projects such as pipelines and
power lines will be assessed
annually at a rate of $0.15 per
square foot in upland areas and
$0.10 per square foot in tidelands
rather than the current
method of individual appraisals
for each parcel intersected
by a project. That would
be comparable to rates
in other Northeast or Mid-Atlantic
states.
- A greater share
of the revenue generated by
leases will be dedicated
to the program or agency
responsible for managing
those leases.
- Management
of billings and collections
for leases on State land
will be centrally coordinated
or outsourced to a
property management
company, to increase
efficiency and cut
costs.
- Telecommunications
tower and antenna right-of-way
leases will be consistently
valued across all State
agencies, based on
prevailing market conditions.
- Per acre shellfish harvesting
lease rates will increase.
Many have not risen in decades
and do not adequately
fund the management
and assistance provided
by the State to the
shellfish industry.
- The Department of Transportation
will establish occupancy
lease rates for private
use of its right-of-ways.
- Current methods that are working
well will be continued, such
as publicly bidding
farm leases on DEP-owned
land when it is consistent
with the Department's
mission and market-based
leases of office and
commercial space by
the New Jersey Economic
Development Authority.
The report does not
make specific recommendations
related to mitigation
for environmental damage
or interagency coordination
related to large linear
corridor projects,
but lays out a framework
to address these issues
in a forthcoming report.
The scope of the report
on the new guidelines
includes evaluations
of and recommendations
for six major categories
or types of leases
the State holds: tidelands;
linear corridors; publicly
bid, market-based,
and nominal fee leases;
telecommunications
towers/antennae; leases
related to aquaculture;
and leases related
to State roads and
highways.
The report identifies key principles
for leasing State land, guidance
on appraisals related to valuing
leases of State land, and a framework
for improved coordination of project
review and mitigation related to
large linear corridor projects
that fall under the jurisdiction
of multiple agencies and programs.
Other recommendations are aimed
at upgrading management systems
for the inventory of leases, and
dedicating a sufficient portion
of revenues from leases of State
land to programs responsible for
maintenance and upkeep of lease-impacted
State parks and wildlife areas.
The report was prepared by a working
group including members from the
DEP, DOT, Board of Public Utilities,
Economic Development Authority,
State Treasurer's Office, Department
of Agriculture, Office of Consumer
Affairs, Pinelands Commission,
State Agriculture Development Committee,
New Jersey Water Supply Authority,
and the Highlands Council.
To read the full report visit:
http://www.nj.gov/dep/docs/landlease110817.pdf
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