Legislation Would Make Companies Pay More for Building on Public Land

Value of project would be factored in when deciding on purchase or lease price, possibly earning state millions of dollars

State Sen. Bob Smith (D-Middlesex)
The Legislature is moving to require companies that want to put projects on land acquired for open-space preservation to pay more to the state than they have in the

In a unanimous vote this past Monday, the Senate Environment and Energy Committee urged approval of a bill (S-570) that would require an assessment of how much revenue a project would generate, a process that would deliver more value to taxpayers who paid for the preservation in the first place, according to proponents.

The bill was spurred by revelations about how little the state was receiving for various projects that crisscross protected land, such as natural-gas pipelines and transmission lines. Some of the projects traverse the New Jersey Highlands; another has been proposed for the heart of the Pinelands.

“It appeared to be from an economic perspective, the state was getting the short end of the stick, to put it mildly,’’ said Sen. Gerald Cardinale (R-Bergen), a cosponsor of the bill.

He and Sen. Bob Smith (D-Middlesex), another primary sponsor and chairman of the committee, became aware of the issue when they were serving on the Statehouse Commission, which reviews the leasing and sale of state-owned properties.

In one case, it was the approval of a $45,000 lease with Tennessee Gas Pipeline for a project in the heart of the New Jersey Highlands that sparked their concerns. The lease, later approved by the commission, was amended to return to the state $180,000 over 24 years, as well as require the pipeline company to pay $2 million in mitigation costs.

“Even that raise is very inadequate,’’ said Smith, who argued that the pipeline project when completed could reap the company millions and possibly billions of dollars. “Our citizens should be properly compensated,’’ he said.

Cardinale agreed, saying that the formula the state uses to determine compensation needs to be revised. The state Department of Environmental Protection has acknowledged problems in the program and proposed raising the price of leases for private projects on state lands, although not high enough, according to some.

The DEP has long been criticized for the way it handles leases on public lands, including by the nonpartisan Office of Legislative Services, which has released three separate audits faulting the agency. The most recent noted that nearly half of the 236 leases under the agency’s purview had expired.

With the discovery of new deposits of natural gas in neighboring Pennsylvania and other nearby states, there has been a profusion of projects aimed at delivering the fuel to both consumers and power plants in New Jersey.

Environmentalists questioned just how many projects are needed.

“We understand diversions are sometimes necessary,’’ said Eileen Swann of the New Jersey Conservation Foundation. “There needs to be a compelling public need.’’

Others argued that these companies are targeting public land because it is cheaper than trying to develop projects on privately owned land.

“What’s happening is we’re selling off our heritage,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “If they had to pay market value, maybe they wouldn’t be targeting open space.’’

Tittel said his group is also concerned about diversion of an 88-acre property in Millville called the Duran tract, which was purchased only a year ago for open-space preservation, but now may be slated for private development, if sold by the DEP.

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