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State of New Jersey Department of Environmental Protection
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NJ DEPT. OF ENVIRONMENTAL PROTECTION NEWS RELEASE
RELEASE: 6/8/01
01/68
CONTACT: Sharon A. Southard or Amy Collings
(609) 984-1795 or (609) 292-2994

DEP COMPLETES DEMARCO REVIEW;
DEP WITHDRAWS ACO

The Department of Environmental Protection (DEP) today announced it has withdrawn its proposed administrative consent order (ACO) with A.R. DeMarco Enterprises, Inc. after failing to reach agreement with DeMarco on revised settlement terms.

In response to recommendations received from the public and the state Inspector General (IG) on the proposed ACO during the normal public comment period, DEP acquired two independent, formal appraisals of land assets proposed to be conveyed to the State by DeMarco to settle the penalty for wetlands violations. The agency also agreed to form a senior committee to review the proposed wetlands settlement to ensure public confidence in the outcome and to address any public misperceptions in the matter.

The proposed ACO allowed for transfer of land and an easement interest in lieu of a $594,000 penalty. DEP Chief of Staff Gary Sondermeyer stated that the department's review committee determined that the state could accept land in lieu of the cash penalty in this case, but the land should be transferred in fee simple. The department determined to impose a monetary penalty of $594,000 against DeMarco after a settlement proposal based on receipt of land in fee simple was rejected by DeMarco.

"This extensive comment and review showed us the strengths of our land use permitting and enforcement program and also areas for improvement," said Sondermeyer. "Land is appropriate as a penalty, provided an appraisal is done, the value of the land is at least equal to the penalty amount, and it is given in fee simple. Relinquishing land can provide the deterrence of a monetary penalty and benefit the public."

The committee conducted an exhaustive review of the appraisals, the IG report and public comments. Specifically, the committee found that the penalty was properly calculated in accordance with Department regulations; exceeded any economic benefit DeMarco realized as a result of filling the wetlands; any Pinelands Development Credits (PDCs) received should transfer to the state with any land provided; and that the easement did have value to the state and public.

In other related actions, Sondermeyer announced that after very careful analysis, DEP has concluded that DeMarco Enterprises, Inc. qualifies for two permits to legitimize the expansion of its cranberry bogs. He said the two permit applications were approved because the site chosen for expansion was the only available site that met the Freshwater Wetlands General Permit requirement for availability of water for bog operations and had the least ecological value. Wetlands converted for bog operations must have a water supply of 227 gallons per minute per acre. The two permit applications, submitted in 2000 and 2001 respectively, each cover 10 acres.

Because bog expansion permit applicants can only seek to convert 10 acres per year, DeMarco needs three permits to legitimize the 22 acres of wetlands that were converted to cranberry bogs. DeMarco will have to apply for a third permit in 2002 for the remaining two acres. As a condition of approvals, DeMarco will have to transfer 2 1/4 PDCs to the DEP which will then be sold to the Pinelands Development Credit Bank and the revenue will be placed in DEP's white cedar restoration fund.

DEP Deputy Commissioner Bob Tudor said that the permit applications meet the criteria under newly revised general wetlands permit rules, noting that DeMarco's wetlands violations and the approval of the permits were evaluated as two separate issues.

"Had it not acted prematurely, DeMarco Enterprises would have received approval under our new rules for cranberry bog expansions and we believe that the penalty assessed today sufficiently compensates for the wetlands disturbance which occurred," said Tudor.

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