NAIOP New Jersey: Rebound From Superstorm Sandy Still a "Work in Progress"

Ongoing Development and Redevelopment Impacted by a Changing Regulatory Climate. End Quote

Middlesex-Somerset-Hunterdon, NJ (1888PressRelease) June 11, 2013 - Panelists addressed the topics "The State Response to Rebuilding" and "Design and Insurance for More Resilient Communities," both focusing on the aftermath of superstorm Sandy. The overview of those topics at NAIOP New Jersey's Annual Regulatory Update was that the State of New Jersey effectively marshaled its resources during and after the storm, and that the rebound is still a work in progress. The event was held at the New Jersey Law Center in New Brunswick, N.J.

Moderating the former panel, Allen Magrini of Hartz Mountain Industries noted that, "the emergency work is done. Now, we're settling down, looking to rebuild and focusing on the long-term effect of new regulations. The storm impacted not only our beaches, but also the Hudson River waterfront, which has been a 'Smart Growth' target. It was an unparalleled storm for that region.

"The result was an unprecedented marshalling of its assets by state government," Magrini said. "The state stepped up and did what it had to do."

Prefacing remarks by state officials, John Jennings of FEMA called the storm "a transformative event. We are continuing to work with communities to develop remediation and better protection plans."

Robert Piel of the New Jersey DEP termed the state as still being in a "response and recovery mode-it is an ongoing effort. We are working to obtain grants and buyouts for those impacted by the storm." Those ongoing efforts also include a new land use management program, waiving and/or changing certain permitting requirements for rebuilding infrastructure and buildings, working with FEMA on new flood maps, considering additional emergency rules, and "getting 'out of the way' in an administrative sense."

Amy Frank of the New Jersey Department of Community Affairs conceded that, "some of those rules don't allow some of the solutions." The bottom line, however, is that the governing flood rules have been adapted from national standards, and "new construction will have to follow state construction and national flood insurance rules." It was noted that dry flood proofing is not allowed in a V Zone.

Regarding utilities, "the impact of Sandy and three previous major storms has shifted the paradigm," said James Giuliano of the New Jersey Board of Public Utilities. "Sandy impacted 70 percent of the state-it was a true energy emergency, impacting not only electricity, but also petroleum and natural gas." He spelled out three targets in the storm's aftermath: "hardening and resiliency in the electric grid," vegetation management (cutting trees, for example); and "improving petroleum fueling plans and strategy. The question is, 'what could we have done better?'

"The bottom line is that energy providers and communities have to be better prepared," Giuliano said. "Energy-dependent businesses need better continuity plans."

The New Jersey EDA has been focused on disaster recovery funds, said the authority's Tim Lizura. "Multiple billions of dollars have been designated for recovery," he said. Disposition includes everything from federal CDBG funds ("there is a special bill in Congress"); to a grant program for businesses; $100 million set aside for a loan program to help businesses ("the terms are extraordinarily favorable and flexible"); $75 million set aside for communities targeting infrastructure; and even the well-received "Stronger than the Storm" television and radio advertising campaign.

DESIGN AND INSURANCE FOR MORE RESILIENT COMMUNITIES
On the topic of "Design and Insurance for More Resilient Communities," our panel will discuss the practical effects of the new regulations," said moderator Diana Fainberg of D.E. Fainberg Associates.

Much of the new regulatory impact is emerging from NJIT's new Center for Resiliency. "We've learned a lot of lessons," said NJIT's Thomas Dallessio, noting that the Center's goal is to "provide actionable 21st Century ready-to-build designs and expertise." Asking the commercial real estate industry to "come to us with projects and ideas, our long-term goal is to mobilize a comprehensive approach. We have to act now so the costs aren't as high in future storms."

The Center's mission is to develop new building prototypes, using new, cutting-edge materials. "Universal design is key," he said.

From the insurance standpoint, "the number of climate and weather-related events impacting the industry and its models is going up," said Carl Hedde of Munich Reinsurance America, Inc. In terms of Sandy, however, "it's too early to take into account how the industry reacts because there are thousands of events affecting the long-range insurance models. We will see a lot of research over the next few years-we have an awful lot to do," he concluded.

On the municipal level, Sandy "was a nightmare for us," conceded Robert Antonicello of the Jersey City Redevelopment Agency. Responses to the storm's impact there include everything from elevating new construction, to proposed projects not yet under construction "being re-thought." With an overall goal of keeping Jersey City's momentum on track, "it is important to align what we're doing with what the New Jersey DEP is doing and work through FEMA's maps. It's a work in progress," he said.

One new project in Hudson County is LCOR Inc.'s redevelopment of the perimeters of the rail yards straddling the Hoboken/Jersey City border. Being done in partnership with New Jersey Transit, the mixed-use project's response includes raising the site's buildings from the previous 11 feet above the 100-year flood to 14 feet above, noted LCOR's Brent Jenkins.

The redevelopment plan also includes funds to "help mitigate the impact of future storms," he said. Those funds will be utilized to create an integrated flood barrier, create the means of absorbing and diverting rainwater from local sewers by pumping it into the Hudson River, and creating weather-resistant buildings. Besides the local tax and economic benefits of the project, "it will generate funding to complete more than $15 million of storm prevention improvements at no cost to local residents," Jenkins said, encouraging people to "work together with the development community."

"As we adjust to the aftermath of Sandy, it is very important to have this update provided by those who are in the front lines," said Michael McGuinness, CEO of NAIOP New Jersey, the commercial real estate development association. "We will continue to play a major role in providing news, information and advocacy for an industry that is a backbone of our state's economy."

Many of the attendees at the event also qualified for two Continuing Education Units (CEUs).

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