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Lesser v. Cape May, City of

ELR Citation: 31 ELR 20091
Nos. 99-5575 (JAP), 110 F. Supp. 2d 303/(D.N.J., 08/16/2000)

The court holds that the city of Cape May, New Jersey, did not violate the National Environmental Policy Act (NEPA) or the National Historic Preservation Act (NHPA) when it approved the proposed plans of an owner of a historic hotel to restore the hotel and build a conference center on the property. The court first holds that the city did not act arbitrarily or capriciously when it found that 202 parking spaces currently exist on the hotel premises. The programmatic agreement (PA) that the city used to address concerns about the project does not suggest that there has been a legal determination that the hotel is permitted to use 202 parking spaces. Instead, the PA provision stating that there are 202 parking spaces in use on the property is a factual finding adequately supported by the record. Moreover, the city did not have an obligation to determine whether the 202 parking spaces were a preexisting nonconforming use of the property because no defendant had the authority during the NHPA process to make such a determination. Further, the city adequately took into account the potential adverse effects of the parking and included provisions in the PA seeking to mitigate any potential harm.

The court next holds that the city's decision to use a PA instead of a memorandum of agreement was neither arbitrary nor capricious. According to NHPA regulation 36 C.F.R. 800.14(b)(1)(ii), where, as here, the effects of a complex project on a historic property cannot be ascertained prior to approval of the project, a PA may be used. Moreover, the city's use of the PA did not improperly bypass the phase II portion of its historic application because the phase II was privately financed and, thus, is not subject to NHPA and NEPA review.

The court then holds that the city did not violate NEPA by bifurcating the project during the environmental review process. When it reviewed the project, the city considered phase I to be rehabilitation of the hotel, and phase II as construction of the conference center. However, phase I is the only proposed action presently subject to review because the phase II design and construction plans remain uncertain, making the determination of environmental effects unascertainable. Moreover, phase I by itself has independent utility, and there is no evidence that the potential environmental effects of both phases, when considered together, will have a cumulative or synergistic impact. Thus, the bifurcation was not arbitrary or capricious.

The court also holds that the city properly conducted NHPA §§106 and 110(f) review of the project even though it did not conduct an independent analysis of the project's potential adverse effects, but instead relied on documents submitted by the hotel owner. The record contains ample evidence that the city properly conducted the NHPA process and that the plaintiffs were afforded a sufficient opportunity to comment. Similarly, the PA contains ample evidence that the city complied with the NHPA §110(f) mitigation requirement by attempting to minimize the harm caused by phase I and by inserting provisions in the PA to continue to mitigate harm if phase II is developed.

The court next holds that the city's finding of no adverse effect was not procedurally flawed. After receiving comments that the project would have adverse affects, the city considered the comments and developed the PA to address them. Therefore, the claim that the city failed to address the adverse effects is moot. Likewise, the city properly documented its no-adverse-effect finding. In addition, the city was not required to consider prudent and feasible alternatives to the project. The court also holds that the city did not abdicate its responsibility to conduct an independent review of the project when it relied on an independent environmental review of the project prepared by environmental consultants retained by a state agency. The NEPA review process often involves specialized scientific knowledge, and to forbid consultation with outside experts would result in uninformed agency decisions. As long as the agency retains ultimate decisionmaking authority, as the city did in this case, such consultation is reasonable.

The full text of this decision is available from ELR (30 pp., ELR Order No. L-262).

Counsel for Plaintiffs
Jonathan M. Preziosi
Jamieson, Moore, Peskin & Spicer
300 Alexander Park, CN 5276, Princeton NJ 08543
(609) 452-0808

Counsel for Defendants
Anthony P. Monzo
Cooper, Perskie, April, Niedelman, Wagenheim & Levenson
211 N. Main St., Ste. 202, Cape May Court House NJ 08210
(609) 465-3000