State revising policies for leases on state lands

TRENTON – The state is revamping policies for leasing of state lands.

The Department of Environmental Protection said today that the policies they are unveiling will minimize environmental impact, and ensure the state is fairly compensated, particularly regarding utility cables, lines, towers, and other infrastructure.

The state said the new policy rectifies outdated and inconsistent fee schedules.

The guidelines come from a panel convened last year in the wake of the Tennessee Gas Company’s pipeline lease in northern New Jersey. That lease was drawn up by the DEP and amended and approved in July 2010 by the Statehouse Commission, based on policies that had not been updated or restructured for decades.
“The state’s process for valuing leases was long overdue for a major overhaul,” said DEP Commissioner Bob Martin. “This is our opportunity to bring this system up to date, to provide more predictability for business and to get the best deals and most fair compensation for the people of New Jersey.”

The DEP alone owns 800,000 acres of parks and fish and wildlife habitats that are crossed in many areas by utility lines.

Most of the new guidelines will be implemented by State agencies immediately. Key points:

  • Appraisals of State land for the purposes of valuing private use leases will consider the intended use of the land.
  • No new “in perpetuity” leases will be issued.
  • All leases, especially those with renewal clauses, will include an annual inflation adjustment of at least 2.5 percent.
  • Linear corridor leases for projects such as pipelines and power lines will be assessed annually at a rate of $0.15 per square foot in upland areas and $0.10 per square foot in tidelands rather than the current method of individual appraisals for each parcel intersected by a project. That would be comparable to rates in other Northeast or Mid-Atlantic states.
  • A greater share of the revenue generated by leases will be dedicated to the program or agency responsible for managing those leases.
  • Management of billings and collections for leases on state land will be centrally coordinated or outsourced to a property management company, to increase efficiency and cut costs.
  • Telecommunications tower and antenna right-of-way leases will be consistently valued across all state agencies, based on prevailing market conditions.
  • Per-acre shellfish harvesting lease rates will increase. Many have not risen in decades and do not adequately fund the management and assistance provided by the State to the shellfish industry.
  • The Department of Transportation will establish occupancy lease rates for private use of its right-of-ways.
  • Current methods that are working well will be continued, such as publicly bidding farm leases on DEP-owned land when it is consistent with the Department’s mission and market-based leases of office and commercial space by the New Jersey Economic Development Authority.

The Tennessee Gas Pipeline Company wants to extend lines through areas of northern New Jersey in state parkland:

State revising policies for leases on state lands