In Re Reauthorization of Cafra Individual Permit and Taw, Etc.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3464-21

IN RE REAUTHORIZATION OF
CAFRA INDIVIDUAL PERMIT
AND TAW, 1500-04-0001.5
LUP190001.
______________________________

Argued November 13, 2023 – Decided December 12, 2023

Before Judges Gilson and Berdote Byrne.

On appeal from the New Jersey Department of
Environmental Protection.

Daniel A. Greenhouse argued the cause for appellants
Pinelands Preservation Alliance and Save Barnegat Bay
(Eastern Environmental Law Center, attorneys; Daniel
A. Greenhouse and Maggie Broughton, on the briefs).

Kevin DeCristofer, Deputy Attorney General, argued
the cause for respondent New Jersey Department of
Environmental Protection (Matthew J. Platkin,
Attorney General, attorney; Donna Arons, Assistant
Attorney General, of counsel; Kevin DeCristofer,
Deputy Attorney General, on the brief).

William F. Harrison argued the cause for respondent
Jaylin Holdings, LLC (Genova Burns, LLC, attorneys;
William F. Harrison and Jennifer Borek, of counsel and
on the brief).
PER CURIAM

Appellants Pinelands Preservation Alliance (PPA) and Save Barnegat Bay

(SBB) seek to prevent the development of property located in the coastal region

of the Pinelands National Reserve. After almost twenty years of administrative

review and litigation, appellants again claim the Department of Environmental

Protection (DEP) erred in granting Jaylin Holdings, LLC's (Jaylin) a Coastal

Area Facility Review Act (CAFRA) 1 Individual Permit and Transition Area

Waiver.

Specifically, appellants contend DEP (1) acted erroneously and arbitrarily

in ignoring the required Flood Hazard Area (FHA) and Riparian Zone (RZ)

verifications based on an outdated permit and a generalized finding that Jaylin's

proposed development was far enough from those protected areas; (2) failed to

include the FHA and RZ in its calculation of the applicable impervious coverage

limits; (3) erroneously permitted Jaylin's proposed modified transition area to

encroach upon the FHA and RZ; and (4) arbitrarily ignored the Pinelands

Commission's (the Commission) determination that Jaylin's proposed

development is inconsistent with the Pinelands Comprehensive Management

1
N.J.S.A. 13:19-1 to -21.
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Plan (CMP). According to appellants, each one of these errors warrants reversal

of the permit and waiver reauthorizations and require further submissions by

Jaylin and administrative review by DEP before any development can begin.

Having reviewed the record and applicable law, we discern nothing

arbitrary, capricious, or unreasonable in DEP's reauthorization of the CAFRA

Individual Permit and Freshwater Transition Area Waiver to Jaylin. Because

appellants had notice and ample opportunity to raise the alleged defective

delineations of the FHA and RZ on the property to DEP and failed to do so in

multiple prior rounds of comments and litigation, they are precluded from

raising this issue on this appeal. And substantively, appellants fail to show the

FHA or RZ zones depicted on Jaylin's application are incorrect or require a

different result. We also conclude appellants' arguments regarding

encroachment of the transition area and impervious coverage limits lack merit.

Lastly, we conclude appellants' argument concerning the Commission is moot

as we previously ruled on that issue in our prior opinion, see Pinelands Pres. All.

v. Dep't of Enviro. Prot., 436 N.J. Super. 510, 516 (App. Div. 2014).

Accordingly, we reject all of appellants challenges and leave the permit and

waiver in place.

I.

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 On November 4, 2004, Jaylin applied for a CAFRA Individual Permit and

a Freshwater Wetland Transition Area Waiver (TAW) pursuant to the

Freshwater Wetlands Protection Act 2 (FWPA) to the DEP's Division of Land

Resource Protection (Division) for proposed development of land located in the

Townships of Toms River and Manchester (the property). The property is

located in the coastal zone of the Pinelands National Reserve. Within 500

meters of the proposed development is an unnamed tributary of the Sunken

Branch stream. The property is currently forested and undeveloped and was

initially determined by DEP to possess a mix of wetland habitats having

intermediate or exceptional resource value. DEP subsequently amended its

determination to consider all the property's wetlands to be of exceptional

resource value based on more recent information on threatened and endangered

species on the property.

Jaylin's initial application sought to construct a 208,433 square foot

department store, with an approximately 20,000 square foot garden center, three

stormwater basins, parking to accommodate almost 1,200 vehicles, two

outparcels to be reserved for future use, and access road off Route 37 and

2
N.J.S.A. 13:9B-1 to -30.
A-3464-21
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Northampton Boulevard. After fifteen years of administrative review and an

appeal in 2014, Jaylin submitted another CAFRA Individual Permit and TAW

application on December 9, 2019 (the application). The application proposed a

substantially reduced footprint: an 81,275 square foot retail buildi ng, a 4,800

square foot restaurant, a 9,322 square foot retail building, 570 parking spaces

and associated circulation roadways, stormwater management measures,

utilities, and landscaping. Jaylin submitted a Stormwater Management Report

and CAFRA Individual Permit Report with its application. The former noted

the proposed development was more than 400 feet away from the stream

encroachment line and the finished floor elevation was set more than 6 feet

above the 100-year flood elevation.

On February 12, 2020, Jaylin's application was found to be

administratively complete and proceeded to public comment. PPA timely

submitted comments to the application and addressed the TAW averaging plan,

threatened and endangered species, coordination with the Commission, and

impervious cover requirements. The Commission also provided DEP with its

own assessment of Jaylin's proposed development and determined the plan

"remain[ed] inconsistent with the wetlands protection and the threatened and

endangered . . . species protection standards of the CMP."

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 The Division issued Jaylin a CAFRA Individual Permit and TAW on

September 2, 2020. Included with those approvals was an engineering report

which stated a flood hazard verification was not needed because the "[p]roposed

development is located at significant higher elevations than the approved stream

encroachment line [and is] far enough from the stream."

PPA and SBB appealed on various grounds and DEP moved before us to

remand the permitting decision. We granted the remand, and a new thirty-day

public comment period was held from April 21, 2021, until May 20, 2021.

Again, appellants submitted public comments and requested a hearing. These

comments addressed many of the same issues as their previous comment: the

TAW averaging plan, threatened and endangered species, coordination with the

Commission, and impervious cover requirements. In addition to appellants'

comments, sixty-four other persons and entities submitted comments, most of

which opposed Jaylin's application. Some of the comments raised concerns

about the habitat of the Northern Pine Snake and Pine Barrens Tree Frog,

wetlands, impervious cover calculations, stormwater management, and the

CMP. Jaylin responded on October 2, 2021. One month later in November

2021, PPA submitted further comments with regards to threatened and

endangered specious and impervious cover.

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 On May 31, 2022, DEP issued a reauthorization of Jaylin's CAFRA

Individual Permit and TAW. Concurrent with the approvals, DEP issued an

environmental report addressing all the comments it received. DEP then

published an Amplification of Record on July 28, 2022, to clarify its May

reauthorization. This appeal followed.

II.

Our review of an administrative agency's decision is circumscribed. N.J.

Highlands Coal. v. State, Dep't of Env't Prot., 456 N.J. Super. 590, 602 (App.

Div. 2017). An agency's decision will not be reversed unless: "(1) it was

arbitrary, capricious, or unreasonable; (2) it violated express or implied

legislative policies; (3) it offended the State or Federal Constitution; or (4) the

findings on which it was based were not supported by substantial, credible

evidence in the record." Id. at 602-03 (quoting Univ. Cottage Club of Princeton

N.J. Corp. v. State, Dep't of Env't Prot., 191 N.J. 38, 48 (2007)). With respect

to DEP, "great deference" is provided to decisions balancing the competing

interest of development and conservation. Id. at 603 (quoting In re Stream

Encroachment Permit No. 0200-04-0002.1 FHA, 402 N.J. Super. 587, 597 (App.

Div. 2008)). The party challenging DEP's permit authorization must

demonstrate "not that the agency's action was merely erroneous, but that it was

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arbitrary." Ibid. (quoting Stream Encroachment Permit, 402 N.J. Super. at 597).

An agency, however, cannot issue a permit prior to satisfaction of the applicable

statutory and regulatory criteria. Del. Riverkeeper Network v. State, Dep't of

Env't Prot., 463 N.J. Super. 96, 113 (App. Div. 2020) (quoting In re

Authorization for Freshwater Wetlands Gen. Permits, 372 N.J. Super. 578, 596

n.8 (App. Div. 2004)).

III.

1. Verification of FHAs and RZs.

First, appellants contend DEP impermissibly relied upon an outdated

Stream Encroachment Permit from 2005 and, based on that outdated permit and

information, arbitrarily determined Jaylin's proposed development was far

enough away from the property's FHA and RZ to obviate verification.

According to appellants, the Flood Hazard Area Control Act (FHACA) requires

DEP to specifically identify and delineate FHAs to protect the public's health,

safety, and general welfare. Because FHAs and RZs are "special areas," Jaylin

was required to submit with its application site plans which delineated the

"upper and lower limits of all special areas, as described at N.J.A.C. 7:7-9"

pursuant to DEP's Coastal Zone Management (CZM) rules.

A-3464-21
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 Appellants argue the only way to avoid verification would be if the

proposed development were either: (a) not in a FHA or RZ, or (b) met one of

the conditions listed at N.J.A.C. 7:13-5.5(a). Neither DEP nor Jaylin provided

any documentation delineating the express locations of the FHA and RZ on the

property. Appellants claim it was improper for DEP to issue the CAFRA permit

without "knowing these details with formality, certainty and specificity."

Appellants contend the matter must be remanded for further findings to correct

this "fatal flaw" in the CAFRA permit reauthorization. They further argue,

rather than focusing on the requirements of the current regulatory framework,

DEP prioritized the stream encroachment line, which is no longer part of the

applicable regulations.

As an initial matter, we note that appellants failed to first raise this issue

regarding delineation of the FHA and RZ to DEP. Appellants had ample time

and opportunity to present their concern that the application lacked precise

delineation of the FHA and RZ during the five notice-and-comment periods but

failed to do so. Had they done so, Jaylin could have properly and timely

responded. Moreover, at oral argument, appellants conceded they do not have

an expert or engineering report to demonstrate Jaylin's delineations on its

Stormwater Management Report, filed with the application in 2019, are

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incorrect or do not fall within the exception to FHACA. In other words,

appellants argue only that Jaylin's failure to provide an expert or engineering

report delineating the FHA and RZ violates the applicable regulation.

Ordinarily, we would not address issues appellants failed to raise before DEP.

Stream Encroachment Permit, 402 N.J. Super. at 602.

Nevertheless, we relax this rule when the questions raised on appeal

concern matters of great public interest. Zaman v. Felton, 219 N.J. 199, 226-27

(2014). DEP was required to abide by the applicable statutes and regulations

regardless of whether appellants raised compliance issues prior to its decision.

See L.W. ex rel. L.G. v. Toms River Regional Schs. Bd. of Educ., 381 N.J.

Super. 465, 489 (App. Div. 2005) (holding an agency action that violates express

or implied legislative or regulatory policies is evidence of arbitrary and

capricious conduct).

Because Jaylin's proposed project is near land including a FHA, RZ, and

transition area, Jaylin was required to comply with those regulations governing

"special water's edge areas." N.J.A.C. 7:7-9.1, 7:7-9.25, 7:7-9.26, 7:7-9.28. An

FHA is "the space . . . which lies below the [FHA] design flood elevation."

N.J.A.C. 7:13-1.2; see also N.J.A.C. 7:7-9.25. A RZ is "the land and vegetation

within and adjacent to a regulated water." N.J.A.C.7:7-9.26. A transition area

A-3464-21
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is that "area of land adjacent to a wetland which minimizes adverse impacts on

the wetlands or serves as an integral component of the wetlands ecosystem."

N.J.A.C. 7:7-9.28.

FHACA's rules require a verification before, or contemporary with, an

authorization of an individual permit. N.J.A.C. 7:13-5.2(b); N.J.A.C. 7:13-5.5.

This general requirement is subject to two exceptions. N.J.A.C. 7:13-5.5(a).

Relevant here, if DEP determines, "based on a visual inspection of submitted

site plans and without review of calculations, that . . . [n]o fill or aboveground

structure is proposed within a flood hazard area," then no verification is

required. N.J.A.C. 7:13-5.5(b)(1). RZs are absent from N.J.A.C. 7:13-5.5.

While verification of a RZ is permissible, N.J.A.C. 7:13-5.2(a)(4), it is not

required, see N.J.A.C. 7:13-5.5.

DEP noted the tributary is approximately 650 feet away from the closest

point of the proposed project. Topography shows up to eight feet in elevation

differences. Based on these regulations, DEP did not arbitrarily waive the FHA

verification requirement and was not required to verify the RZ. DEP was

permitted to visually inspect the site plans provided by Jaylin and based upon

that visual inspection, permitted to find the proposed development was

sufficiently far enough from the FHA to waive verification. Jaylin provided site

A-3464-21
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plans with its application in 2019, and nothing in them contradicts DEP's

finding. Nor do appellants point to contrary evidence; instead, their argument

ignores this exception entirely.

Although Jaylin's Stormwater Management Report referenced the stream

encroachment line and the former stream encroachment permit, not the FHA,

this supports, rather than detracts from DEP's findings. Put simply, the term

"stream encroachment permit" was merely replaced with the term "flood hazard

area permit," which is "a permit or authorization issued under [N.J.A.C. 7:13]

pursuant to [FHACA]." N.J.A.C. 7:13-1.2. The permits pursuant to the pre-

2007 amendments were "called stream encroachment permits" but DEP found

the term "impl[ied] the existence of both a stream and an encroachment into the

stream, neither of which are necessarily aspects of an activity regulated" under

FHACA. 38 N.J.R. 3963 (Oct. 2, 2006). Instead, DEP found the term "flood

hazard area permit" was "a more descriptive and accurate term that better

reflects the subject matter of [FHACA]." Ibid. There is nothing in the record

to suggest reliance upon the previously established stream encroachment line

would be arbitrary or erroneous and appellants failed to show any evidence.

As stated previously, N.J.A.C. 7:7-23.4(c)(4)(vii) requires applicants

provide site plans, which delineate the upper and lower limits of all special areas

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such as FHAs and RZs subject to certain exceptions. The maximum width of a

RZ is 300 feet. N.J.A.C. 7:13-4.1(c). This is in addition to any other similar

zones present on the property, such as an FHA. N.J.A.C. 7:13-4.1(i). At best,

the RZ in question would be afforded a 150-foot zone pursuant to N.J.A.C. 7:13-

4.1(c)(2)(iii). The combined 150-foot RZ buffer with the requisite 150-foot

transition area would still not reach the proposed development on the property,

which is more than 300 feet away from those areas.

There is substantial credible evidence in the record to support DEP's

conclusion its reauthorization of the permit did not require an engineer delineate

the FHA and RZ. FHA verification is not required before an individual permit

is authorized where DEP can determine, pursuant to a visual inspection of

submitted site plans, that no fill or aboveground structure is proposed within the

FHA. DEP visually inspected the various site maps provided by Jaylin and

assessed the distances between the FHA and the proposed development, as well

as the project's elevation above the FHA, and issued a report stating verification

was unnecessary. In doing so, DEP properly relied on the regulation.

Appellants present no evidence DEP's findings are erroneous or arbitrary.

2. The Impervious Cover Calculation.

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 When a CAFRA permit is requested for land situated in a coastal area, all

parties concede any development is limited to thirty percent of the impervious

surface coverage. N.J.A.C. 7:7-13.17(d)(1). The net-land area is calculated by

totaling the entire acreage of the property and subtracting the seven listed special

water's edge areas. N.J.A.C.7:7-13.3(e).

Appellants argue Jaylin and DEP impermissibly failed to include the FHA

and RZ in that calculation. Although the applicable regulation does not require

those areas be included in the calculation, appellants contend that regulatory

omission "lacks any coherence and must be rejected . . . ." Due to this

incoherence, appellants request we "issue a precedential opinion which

expressly requires [] DEP to account for the FHA and the RZ when calculating

the allowable impervious coverage of a site under CZM rules."

Appellant's arguments are unavailing. The regulation specifically lists

seven special water's edge areas that are to be subtracted from the total land area

calculation. N.J.A.C. 7:7-13.3(e)(2). Although wetlands transition areas must

be subtracted from the total land area, N.J.A.C. 7:7-13.3(e)(2)(iv)(v), FHAs and

RZs are absent from the list. Appellants' arguments to the contrary ignore the

plain language of the regulation requiring DEP to subtract only a subset of the

listed special water's edge areas—seven out of a total of fifteen—and would

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require us to overrule DEP's own regulations based on appellants' unsupported

belief there is no reasonable distinction between intermittent stream corridors

and FHAs and RZs. We decline to change the DEP regulation. In that regard,

we note appellants did not file a timely objection to the DEP regulations. See

In re Adoption of N.J.A.C. 11:3-29 ex rel. State, Dep't of Banking & Ins., 410

N.J. Super. 6, 26 (App. Div. 2009) ("To permit a party . . . to raise objections to

a rule . . . that it failed to raise before the administrative agency at the appropriate

time would be to undermine the very purpose of administrative agencies.")

(quoting Bergen Pines Cnty. Hosp. v. N.J. Dep't of Human Servs., 96 N.J. 456,

475 (1984)).

There is sufficient credible evidence in the record supporting DEP's

exclusion of these areas. FHAs and RZs are not listed as excludable in the plain

language of the statute. The specific seven areas are excluded because they are

"the most sensitive special water's edge areas," 32 N.J.R. 503(a) at Response to

Comment 465 (Feb. 7, 2000). Appellants' personal disagreement with this

regulation provides no basis for reversal.

3. The Modified Transition Area Calculation.

Entities and individuals are not permitted to engage in commercial

development in transition areas, N.J.A.C. 7:7A-2.3(a)(3), without a transition

A-3464-21
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area waiver, N.J.A.C.7:7A-3.3(f). Jaylin's application included a TAW

averaging plan governed by N.J.A.C. 7:7A-8.2. A TAW averaging plan

"modifies the overall shape of a transition area without reducing its total square

footage" and is permissible for regulated activities adjacent to exceptional

resource value freshwater wetlands. N.J.A.C. 7:7A-8.2(a).

We disagree with appellant's argument that "DEP's issuance of the TAW

frustrates and violates the FHACA and the FWPA" because DEP's contingent

issuance, based upon the creation of a "modified" transition area, fails to adhere

to the applicable regulations. They argue Jaylin's proposed modified transition

area requires the alteration of the existing FHA and RZ, and, hence, "will not

continue to serve functionally equivalent purposes of the original transition area

and there will be a substantial net loss in protection of the wetlands on site."

Once more, appellants' argument sets forth their preferred regulatory

requirements, rather than citing to existing regulations. A TAW authorizing the

reduction of a transition area adjacent to an exceptional resource value wetland

must be conditioned on an averaging plan that provides an average transition

area width of at least 100 feet. N.J.A.C. 7:7A-8.1(g). DEP must also include

additional protective conditions in a TAW to ensure the proposed activity "does

not result in a substantial impact on the adjacent wetlands and does not impair

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the purposes and functions of transition areas," if necessary. N.J.A.C. 7:7A -

8.1(b). Outside of these general requirements, a TAW averaging plan may

modify the shape of the transition area as long as it does not reduce the area's

total square footage. N.J.A.C. 7:7A-8.2(a). Appellants assert DEP should be

precluded from approving a modified transition area which takes from the FHA

or RZ but there is no regulatory requirement to account for FHAs or RZs when

approving TAW averaging plans. Nor do appellants provide any evidence to

support their claim that the approved TAW will cause a "net loss of significant

protections" or "commensurate benefit" to the areas at issue. Moreover, if the

modified transition area in the averaging plan "will continue to serve the

purposes of a transition area as set forth in N.J.A.C. 7:7A-3.3," then DEP is

required to issue a TAW, barring four exceptions not relevant here. Appellants

fail to show how the modified transition area will not continue to serve the

purpose of a transition area. Therefore, the record supports DEP's grant of the

TAW to Jaylin.

4. The Pinelands Commission Plan.

Lastly, appellants contend DEP arbitrarily failed to concur with the

Commission and reject Jaylin's application. Appellants cite the Commission's

memorandum, which opined Jaylin's proposed development is inconsistent with

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the CMP. According to appellants, DEP's single-sentence explanation for its

disagreement is inadequate and is predicated upon DEP's failure to respond to

the Commission's previous memoranda on the matter. They claim we are

constrained to remand the matter to DEP for an administrative adjudication of

this issue.

We previously addressed this issue in appellant's 2014 appeal. There, we

concluded "[t]here [was] nothing in the MOA, statutes or regulations . . .

requiring that DEP agree with the Commission's findings on any one

application."

In the February 1988 Memorandum of Agreement with DEP, the

Commission agreed that projects within the Pinelands National Reserve (PNR)

and Coastal Zone are subject to DEP's authority. The PNR is an approximately

1,000,000-acre area encompassing much of southern New Jersey. N.J.A.C. 7:7-

9.42(a). The "Pinelands Area" is a smaller subset of the PNR. Ibid. The

Commission exercises direct regulatory authority over the state-designated

Pinelands Area. Jaylin's proposed development is outside of the Pinelands Area,

but inside the PNR and inside the coastal zone subject to CAFRA. Thus, DEP

has the authority to issue the permits even if the Commission objects. DEP is

required only to review the Commission's comments on development

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applications within the PNR, which it did. There is nothing inherently

erroneous, let alone arbitrary, about DEP's disagreement with the Commission.

In sum, there is substantial, credible evidence DEP comported with

applicable regulations and did not act arbitrarily or capriciously in reauthorizing

the CAFRA Individual Permit and Freshwater Transition Area Waiver to Jaylin.

We conclude there is no basis to vacate the permit or wavier.

Affirmed.

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