DEP Commissioner Bob Martin today announced the creation of a special panel to recommend ways to overhaul the State's process of leasing property to private companies that run pipelines, cables, electric lines and towers across many thousands of acres of state-owned land and water.
The new panel, to include representatives of the DEP, Treasurer's Office, Board of Public Utilities, Economic Development Authority and New Jersey Highlands Council, will thoroughly examine how lease agreements are currently structured and created. It will then develop and recommend a new leasing formula that will treat all companies that do business with the state fairly and equally, while getting the best deals for taxpayers.
Commissioner Martin has asked the panel to make its recommendations for changes to the system later this year, to be presented to Gov. Chris Christie.
"This process is broken. How we determine compensation for allowing use of our precious state property, much of it preserved as unique open space and recreational land, needs to be overhauled,'' said Commissioner Martin. "We must ensure that the compensation we get for allowing use of these lands accurately reflects the value of the property. Especially in these tough economic times, the State cannot afford to leave money on the table, and we have an obligation to get the best deal for the public.''
"In some cases, over the last few decades, it seems leases were crafted without a consistent and logical determination, and the State has not even kept accurate records of all the lease transactions. It's time to change that system, to bring it up to date, to develop a better process that will result in proper payments to the state for use of its land, providing the best deals for the people of New Jersey.''
Commissioner Martin also said an improved process would be fairer for businesses that seek to use State lands, allowing them to better predict and understand costs associated with leasing those lands.
"If we want companies to do business in New Jersey, we must have a system that is clear and easily understood,'' the Commissioner said. "They should be able to clearly understand our mitigation rules, understand our formula and know up front how much money it will cost them."
Commissioner Martin said the issue of leases particularly caught his attention recently in connection with the Tennessee Gas Pipeline Co.'s proposal to run a new utility line along its already existing 45-mile natural gas right of way, including State-owned land, in the North Jersey Highlands.
The current system of developing leases, Commissioner Martin said, may not fully account for the unique value of preserved lands, including the disturbance of plant and animal habitats, disruption of conservation efforts, loss of recreational value, and protection of air and water resources.
The DEP owns 800,000 acres of parkland, wildlife refuges and other open spaces that are crisscrossed in many areas by utility lines. In many instances, there is minimal payment derived from outdated and sometimes expired agreements. A thorough inventory and cataloguing of DEP land agreements will be part of the panel's review process.
"We have to establish a framework for a system that is right for the taxpayers and the environment, while also being fair to businesses,'' said Commissioner Martin. "The good news is there is an opportunity now to create a new process.''
The new panel is being chaired by Ben Witherell, the DEP's Director of Economic Analysis.