Farer Fersko is proud to have worked with K. Hovnanian Companies on the homebuilder's entree to the brownfield scene: the Hickory Manor condominium community in Union, New Jersey.

For decades, a company known as Elastic Stop Nut of America (ESNA) manufactured parts for the aviation industry in a sprawling factory. Operations included degreasing and metal plating involving the use of hazardous substances.

Due to industrial operations at the ESNA site and at other nearby properties, an array of environmental problems were found in the 1980s and 1990s.

As the factory owner was considering the best manner to resolve the environmental conditions, including metal-contaminated soils beneath the plating room of the factory, the company encountered financial problems. Operations ceased, and the company went into bankruptcy.

As the factory sat vacant and unused, New Jersey passed a sweeping series of environmental law reforms, including passage of important “brownfields” legislation that provided new opportunities for developers to clean up and redevelop old industrial sites while protecting themselves against inheriting potential environmental liabilities.

K. Hovnanian recognized the opportunities allowed by the brownfield reforms, and was intrigued by the potential for redeveloping the ESNA site due to the residential nature of much of the surrounding area.

The key was finding a means to quickly acquire the site through the bankruptcy court, establishing a fast and effective way to clean it up to residential standards with the cooperation of DEP and planning authorities, obtaining the protections of the brownfield laws, and building the new condominium community.

K. Hovnanian assembled a specialized team of professionals, including David Farer and Ann Waeger of our firm, to coordinate and expedite the regulatory process, develop and implement a swift cleanup to strict DEP residential standards, obtain the necessary “No Further Action” sign off from DEP, and secure environmental insurance.

K. Hovnanian acquired the property in 1998. The cleanup was complete and the DEP sign-off received by May 1999, and the condominium redevelopment project commenced promptly after that. It quickly sold out.