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Monday, May 27, 2024

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UPDATE: N. Wildwood Facing $12.8M in Fines From DEP

A photo
Court Exhibit

A photo, sent by a North Wildwood representative to the state Department of Environmental Protection (DEP), shows waves crashing over the vinyl bulkhead at 2nd Avenue and John F. Kennedy Beach Boulevard, as Hurricane Ian wreaked havoc on the city’s coastline Oct. 3, 2022. The bulkhead was not authorized by the DEP.  

By Shay Roddy

NORTH WILDWOOD – The state Department of Environmental Protection (DEP) issued a total of $12.8 million in fines to North Wildwood for unauthorized work that was done on the city-owned beachfront over the last several years.  

An attorney for the city said they are in the process of appealing the penalties, which would eventually then end up in front of an administrative law judge. 

The severity of the fines issued by the DEP is “probably unprecedented. I don’t ever recall ever having seen one that large,” said Neil Yoskin, special counsel for the city on environmental matters. Yoskin has represented clients in environmental cases in New Jersey for decades.  

A spokesman for the DEP, Larry Hajna, said he would look into it when asked by the Herald if he could put the magnitude of the penalty into historical perspective. However, he did not respond further as of this writing.  

Some of the fines have to do with unauthorized storm mitigation and shore protection efforts the city undertook, which are currently the subject of litigation brought by the DEP in the Chancery Division of Cape May County Superior Court.  

Others are related to the renovation and current operations of Seaport Pier, which extends from the boardwalk toward the ocean over dry land, with a high-volume restaurant and bar adjacent to a members-only pool club, with a small live music venue outdoors in between.  

The city owns the pier and leases it to operator B.G. Capital, a Philadelphia-based developer who has recently become one of, if not the most, active commercial developers on the island. B.G. Capital was heavily involved in the renovation of the pier. 

In three Administrative Orders and Notices of Civil Administrative Penalty Assessment (AONOCAPA), issued Jan. 11, Jan. 24, and Jan. 27, the DEP fined North Wildwood for actions the agency says the city took in violation of the Coastal Area Facility Review Act (CAFRA), Water Pollution Control Act, Treatment Works Approval, Freshwater Wetlands Protection Act and Flood Hazard Area Control Act.  

North Wildwood is being fined $8,661,000 for the Jan. 11 violations, which focused on city projects, including the following: 

  • Construction of vinyl bulkheads from 3rd to 5th Avenues 

  • Construction of steel bulkheads from 7th to 13th Avenues, within a dune area  

  • Unauthorized removal of vegetation and filling and grading of the beach and dune area to create what is now a playground inland of an unauthorized bulkhead between 5th and 7th avenues  

  • Unauthorized path through the dunes to Lou Booth Amphitheater and other unauthorized projects at the amphitheater, including a flagpole and its approximately 96-square-foot concrete landing   

  • Unauthorized gazebos at 1st and Surf Avenues and 2nd Avenue and John F. Kennedy Beach Boulevard 

  • Removal of vegetation and grading to create other footpaths, a bike rack area, a composite bike path, etc. 

  • Installation of composite walkways, benches, and foot showers at some beach entrances 

  • Beach work, including moving and grading of sand, and installation of a vehicular access way at 25th Avenue 

  • Filling of freshwater wetlands between 7th and 13th Avenues by grading within the dune 

Seaport Pier was originally constructed in the 1920s as a private fishing pier and was acquired by the city and made public in 1955, according to the DEP.  

In the 80s, the pier was converted to a shopping village, but closed in 2005 when the buildings were deemed unsafe, the department said.  

The buildings were removed between 2007 and 2009, and, in 2010, it was designated as “an area in need of redevelopment.”  

In 2017, B.G. Capital presented a plan for the redevelopment of the pier and later that year, the city and B.G. Capital entered into a lease agreement and construction began by the end of the year.  

North Wildwood was fined $2,941,000 Jan. 24 for work involved in the renovation of the pier, including: 

  • Construction of the main restaurant/bar building  

  • Construction of a tiki bar (next to the stage) 

  • Construction of the stage  

  • Construction of storage rooms 

  • Construction of additional decking and a beach access path  

  • Converting a proposed storage facility on the pool pier into a swim-up bar with sinks, showers, and bathrooms, despite the permit not allowing for any sewer-generating facilities on the pool pier  

North Wildwood was fined $1,216,182 Jan. 27 for unauthorized operations on Seaport Pier and the pool pier, including: 

  • All sewer generating operations on the pool pier, since that is a non-sewer service area  

  • Bars and restaurant on the main pier are connected to sewer without a treatment works permit  

  • Failure to have a pool discharge permit  

Joe Byrne, managing principal of B.G. Capital and head of the construction company that worked on the pier, also received AONOCAPAs from the DEP related to the work for which the city was fined.

Byrne said in an interview that he met with the DEP  Feb. 21. In the meeting, which Byrne called the most productive meeting he has had with the department in years, he said he and the DEP found what he believes will be a mutually acceptable path forward, which would result in all of Seaport Pier being absolved of litigation and compliant with the department prior to the end of 2023.

In the meantime, Byrne said he feels “100% confident” Seaport Pier will open for business this summer. He would not comment if that was part of discussions with the DEP.

“I’m very optimistic and thankful that we have an open dialogue with the DEP and we’re actively progressing forward on getting Seaport Pier compliant. I have no doubt in my mind that it’ll happen before the end of 2023,” Byrne said. “We will be open this summer.”

 

Byrne acknowledged that his company made some mistakes and messed up the initial pool pier application, but said B.G. Capital is willing to make compromises. He pointed out since Seaport Pier’s opening, he has worked successfully with the DEP on permitting for projects in different parts of the island.

Byrne said he accepts some blame and admitted he hired the wrong professionals for the planning of Seaport Pier, which was B.G. Capital’s first big job on the New Jersey coast. He stressed that the company is not a one-off developer, uninterested in complying with local regulations. He said his company is working on projects in five states and feels its reputation is critical. This was an honest mistake, he said. 

The city was not a participant in the meeting, Byrne said. 

North Wildwood Mayor Patrick Rosenello said he does not see the Seaport Pier violations as a city issue. He said the tenant was responsible for all permits issued. He said the city’s construction office followed the same procedure that it always follows when issuing any city permits for work on the pier. 

Rosenello said it’s his belief all of the fines were brought in retaliation for a $21 million counterclaim that the city made in the civil court case, asking for the DEP to pay back the expense the city has endured performing self-funded work to protect its coastline. Much of that work is what the DEP is now penalizing North Wildwood for. 

Clearly, they were issued as a direct result of our counterclaim. Those things sat in a drawer somewhere for two-and-a-half years. Then, miraculously, after we have this counterclaim, they come out of the drawer,” Rosenello said. “That doesn’t really upset me, because all of these issues need to be resolved in front of a judge together. These are all fingers on the same hand.” 

In a certification, filed as part of the Chancery Division case, Rosenello made Judge Michael J. Blee aware of that position.  

However, it will not be Blee, who allowed North Wildwood’s $21 million counterclaim to proceed to trial Feb. 1, determining the city’s culpability in the AONOCAPA fines. Outlined in the documents is a process in which the city can request an administrative hearing, which would be conducted in the New Jersey Office of Administrative Law. 

Rosenello acknowledged that but said he isn’t necessarily opposed to a different judge. He just wants the power out of the DEP’s hands, since he believes they are “conflicted” when it comes to this issue. 

The mayor said the city may cite the Entire Controversy Doctrine, a legal standard that could potentially bring the hearing on the fines in front of Blee and allow it to be considered as part of the larger case. 

“There are arguments to be made on both sides,” Yoskin acknowledged regarding the doctrine’s applicability in this instance.  

When asked if he was worried about the fines, Rosenello said he is confident the legal process will work itself out, even if it takes time and ends up in the state Supreme Court.  

“I think anyone in the city’s position would do exactly what we did,” said Rosenello. “You’re not going to let your city wash away because of a regulatory dispute with a state agency. You’re going to take whatever actions necessary to protect your city.”  

Rosenello said he is encouraged that the DEP is taking the issue of shore protection more seriously, adding that Commissioner of Environmental Protection Shawn LaTourette visited the beach recently for a meeting with the U.S. Army Corps of Engineers and the mayor.  

“I was happy the commissioner was here. I was happy that the Army Corps was here. This obviously now is on the radar,” Rosenello said. “I’m hopeful that will lead to some energy toward getting shore protection done for North Wildwood.” 

One of the next steps in that process is an emergency authorization for which the city applied to build a bulkhead in front of the Beach Patrol headquarters. 

In accordance with a court order, the city applied Feb. 10 for the authorization. According to Yoskin, the DEP sent the city a letter asking it to address another alternative, which he said it did in a submission made last week.  

In the meantime, supplies to build the bulkhead are piling up near Beach Patrol headquarters.  

Thoughts? Questions? Contact the author, Shay Roddy, at sroddy@cmcherald.com or 609-886-8600, ext. 142. 

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