NJBIZ panel: Uncertainty in policy can lead to cost and delays

Listen to this article

A panel of experts representing real estate development, management and construction in New Jersey were virtually on hand May 25 during NJBIZ’s The Future of Construction and Development Panel Discussion. Moderated by NJBIZ editor Jeff Kanige, the discussion gave viewers a good look at what is really  going on in the industry in the state.

Kanige kicked things off by “throwing the panelists right into the deep end,” as Michael Leondi, vice president design and construction at The Rockefeller Group, put it when Kanige asked where in terms of the regulatory and legislative landscape the state’s environmental justice law that was signed last fall might play out.

Kate Gibbs, deputy director of business development for the Engineers Labor-Employer Cooperative, dove into the answer with her concerns about what is still unknown with the legislation, as it is not finished going through the rulemaking process, making it difficult to know how it is going to work when it is put into practice.

Under Senate Bill 232, signed into law by Gov. Phil Murphy in September 2020, applicants for projects like gas-powered refineries and power plants, sewage plants, landfills, incinerators and other waste disposal sites will have to consider their environmental impact on marginalized communities, submitting a statement on the project’s potential environmental and public health impacts on the local community and holding a public hearing for its residents.

Gibbs said it all poses some very real concerns for the potential of New Jersey’s construction forecast, but believes it will come down to how it’s implemented, whether or not it’s workable and whether or not the business community and the development community feels like “this is a place worth investing in.”

“The only thing that businesses find more difficult than dealing with high cost is uncertainty, because that could lead to more costs and more delays, which are costs, so I think our challenge is, we in the private community working with our policymakers, to make sure that connection between the intention and perhaps unintended results may be able to proceed and prevent the kind of uncertainty that chases dollars away from this market,” she said.

Joining the meet was Leondi, who stated he believes it’s a very noble and well-intentioned plan that is already provoking a important dialogue, but stressed the need to be cautious with its aggressive implementation, stating the importance of a clear path.

Master plan

One of the next topics the panelists discussed had to do with New Jersey’s energy master plan, and the importance the wind port and other developments might place on the regulatory approach to things like solar-ready warehouses, community solar and the development of electric vehicle charging stations and things like that.

James Thaon, branch manager at Bohler, stated the development side was certainly seeing implementation in a lot of town codes requiring electric vehicle charging stations on sites and those types of things must be accommodated for in the design, even for industrial developments.

“For industrial developments that request came from one town. To ensure that there were trailer parking spaces such that we could accommodate electric,” Thaon said. “Vehicle trucks, tractor-trailers to be charged on sites, nowadays, which we haven’t heard about in the past. So this is definitely something that we’re seeing coming down the line and it’s going to be important to design around those facets making sure that there’s proper coordination with utility companies and ensuring that you have the appropriate power in that area to service something like electric vehicle charging stations and make that feasible for your site.”

Leondi concurred with that sentiment and confirmed that electric trucks, as exciting as they are, are always a sticking point in any approval that is sought.

“There’s this perception of all these large tractor-trailers on the road polluting and causing all kinds of congestion, not just traffic-wise but environmentally as well, so that that’s something I’m excited to see how that sort of pans out in regards to solar and, specifically, as it relates to our asset class,” Leondi added.

He continued by explaining how The Rockefeller Group takes a proactive approach and makes all of its warehouses solar-ready, as the solar industry has really come a far away in the last five years. And, that there’s a lot of good opportunity to correct the perception of the solar industry, which has suffered from bad public relations.

Kanige turned to Steve Hittman, founder and chief executive officer, Crossroads Cos., on the question of dealing with municipalities. Hittman said in general, municipalities have a good working relationship with the private sector, but admitted that every town is different.

As municipalities represent their constituents, it is the role of the developers to put together a team and to meet with members of the municipality – such as key stakeholders or the planning board – and get their feedback to come to an agreement on how to proceed in the best interest of all parties.

“You have to listen to them because it’s very expensive, as you know. In a short period of time, you can run up hundreds of thousands of dollars and be no closer to an answer and have to spend seven figures before you get an answer so it’s a delicate process you have to do your homework, you have to communicate, you have to get feedback and listen to the feedback,” Hittman said.