Novartis, A Superfund Site & A Local Mayor
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By Ed Silverman // September 13th, 2012 // 10:34 am
Nearly a decade ago, a landfill that is located just a few miles from the sprawling Novartis US headquarters campus was declared a Superfund site. Known as Rolling Knolls, the former dumping ground covers about 200 acres and is bounded by the leafy New Jersey suburb of Chatham Township and a national wildlife refuge. But a simmering dispute recently broke out over plans for the site that put the drugmaker on the defensive.
Here’s the background. Novartis is one of the so-called responsible parties. This means that, along with a few other entities, the drugmaker would be expected to pay to remediate the site, which is in a residential zone. The final costs are not yet known, however, since the US Environmental Protection Agency has not performed a baseline risk assessment, which gauges contamination and required remedial steps, according to an EPA spokesman (read more here).
Meanwhile, the local Chatham Township government decided to pursue a redevelopment plan that initially included changing the zoning for the landfill site to allow agricultural activities, or what officials called market gardens. This would become a permitted use under an ordinance that was proposed and also dovetail with usage permitted by the New Jersey Right to Farm Act (read here).
Several residents, however, have expressed concerns about the extent and type of commercial activity that may eventually take place and recently filed a lawsuit against the town in hopes of thwarting the ordinance. There were also questions about whether the ordinance might benefit the responsible parties, notably Novartis. That’s because the township effort to pursue redevelopment has been led, in part, by Mayor Nicole Hagner.
Hagner is a clinical trial head at Novartis Consumer Health. Initially, she recused herself from Planning Board meetings, but over the past year, she participated in other public meetings where the ordinance and related issues were discussed, according to court documents and local media reports (see here). In their lawsuit, the residents contend, among other things, that the ordinance could, ultimately, lower clean-up costs for Novartis, depending upon EPA actions.
“I believe that the Mayor’s administration fully intended this ordinance to benefit her personal financial interests, the business needs of her supporters and was an attempt to reduce the clean-up costs to her employer, Novartis Pharmaceuticals,” says Erich Templin, one of several residents who filed the lawsuit. “The only reason that the Township has been forced to pull back from this irresponsible stance is through the efforts of our citizens group making the Township, our Mayor and Novartis accountable for their actions.”
The residents argue that market garden usage – or any related commercial activity – may also increase traffic and potentially affect surrounding property values in what is otherwise a residential neighborhood. They have also alleged that illegal dumping has taken place at the site and town hall has not acted sufficiently to prevent such activity. A recent inspection did find signs that some debris had been left there (see this).
While the Chatham ordinance would not be binding on how the EPA proceeds, current land use typically drives risk assessment, says Bill Wolfe, a former policy analyst and planner with the New Jersey Department of Environmental Protection and former policy director for the Sierra Club in the state, who now heads the state chapter of Public Employees for Environmental Responsibility, which supports environmental enforcement efforts.
“A clean up would look at things like whether gas or ground water is migrating through the subsurface. So you need to build something to prevent them from migrating to homes. And these devices cost a lot of money to build and to install,” he tells us. “If people are going to live there, you obviously want a cleaner site. If there’s agricultural use, you wouldn’t have to look at those kinds of things during configuration of a clean up plan, so you’d have a less costly clean up plan.
“That’s the sort of thing that can vary, though. So it’s premature to make that argument now, because it’s too early in the process. But in a few years, it will be front and center,” he explains. “Depending on the future use of the site, it can impact the nature and cost of the clean up. And so in that case, there is a relationship between zoning and land use and a clean up in the future.”
However, Chatham Township attorney Carl Woodward says Novartis will not benefit, because the ordinance, which was adopted this past spring, was specifically designed to call for conditional use. This means, he explains, that underlying residential zoning remains intact and the EPA would later assess clean-up requirements on that basis. “The zoning remained in place as residential and did not change,” says Woodward, who is a real estate attorney with the Carella Byrne law firm. “Any clean up will have to comply with residential standards” overseen by the EPA.
One expert agrees that conditional use would not alter zoning status. “The underlying zoning district that a parcel is identified with does not change when an application for conditional use, which in some places, is also known as a special exception, is approved,” says Notre Dame Clinical Law Center professor Jim Kelly, who specializes in community development law. “The changing of a zoning district designation is invariably called a rezoning and usually requires approval by the local legislative body that enacted the zoning ordinance and zoning map.”
In other words, any EPA clean-up requirements would have to adhere to the stricter standards applied to residentially zoned areas. “Right now, the zoning for the site is residential and EPA intends to (plan for and oversee a) clean up for a residential zone,” an EPA spokeswoman tells us. “If the zoning were to change, that could change” the approach. She confirms that “residential is our more stringent standard.”
In any event, Woodward adds that a second ordinance was subsequently adopted this summer when the township committee decided to exempt the Rolling Knolls site from being used for market garden purposes. As a result, he says, the residential zoning status of the landfill site continues to remain intact. The second ordinance was proposed and then adopted just weeks after the residents filed their lawsuit.
But Woodward says the second ordinance, which was adopted last month, was proposed only to correct a typographical error in the first ordinance, which included the landfill site in the market garden proposal (you can read both ordinances here and here). “It was something that people did not recognize at one point,” he says, but denies the change was made in response to community opposition. “It’s an academic discussion, though. There is no benefit to Novartis” (you can read his certification here).
However, the residents who filed their lawsuit continue to maintain the entire episode was not pursued in good faith, in part because they allege the landfill was not initially disclosed in proposed zoning changes. And while Woodward maintains Hagner properly recused herself, the residents also argue that Hagner should never been present at any proceedings in which the ordinance was discussed. And they cite these arguments in a proposed amended complaint they hope to have approved by a state court judge as soon as this week (here is the complaint).
For the record, the Novartis code of conduct says that “employees may not act as elected or appointed officials of any branch of government or any governmental agency or as an advisor or consultant to any governmental agency, which has any regulatory or supervisory power over the company or any of its affiliates.” Hagner did not respond to requests for comments, but a Novartis spokeswoman defended her in an e-mail she sent us.
Hagner, she wrote, “cleared her appointment as Chatham Township Mayor with Novartis Pharmaceutical Corporation’s Ethics and Compliance committee and she has an agreement with the Chatham Township Committee to recuse herself from any discussions or votes that have anything to do with Novartis so there aren’t conflicts of interest…. Our understanding of the Market Gardening ordinance is that it has nothing to do with the Rolling Knolls site and has no benefit to Novartis. In fact, the recent Town Committee ordinance was passed to ensure that market gardening would not be allowed on the Rolling Knolls site, as it is a former landfill.”
