In economic hard times, this combination of poor marketconditions coupled with state regulatory pressures wreak havoc onthe circumstances of developers and further extend the recoverytime after a recession. Recognizing this "vicious cycle of default"and finding that a national recession has drastically affected NewJersey's economy, particularly the banking, real estate andconstruction sectors, the Assembly and Senate passed the PermitExtension Act of 2008 on June 23, 2008. The Act, which Gov. JonCorzine is expected to sign into law, will suspend the expirationof most permits in existence during the extension period fromJanuary 1, 2007 through July 1, 2010, including, among others,Wetlands permits, New Jersey Meadowlands permits, and preliminaryand final approvals granted by municipalities under the MunicipalLand Use Law.

As originally drafted, the Act only excluded permits involvingthe federal government and municipal approvals for residentialdevelopments where the land has been subsequently re-zoned foreither industrial or commercial uses. In response to strenuouslobbying from environmental groups, additional categories ofpermits have been excluded from the protection of the Act,including permits in defined environmentally sensitive areas,permits issued by the Department of Transportation in areas otherthan rights-of-way, permits issued under the Flood Area HazardControl Act and some permits issued under the Coastal Area FacilityReview Act.

The permit extensions work like this: Let's say a builder hadpreliminary site plan approval to construct a housing developmentbut, because of the recession, wasn't able to get the project goingbefore the approval expired on March 1, 2007. Under the PermitExtension Act, the running of the permit period stops as of Jan.1,2007 – actually resurrecting this expired permit for the extensionperiod, until July 1, 2010. At the end of the extension period, thepermit period begins to run again from where it was suspended as ofJan. 1, 2007, for the two remaining months, making the newexpiration date Sept. 1, 2010. The Act only allows covered permitsto extend for six months beyond July 1, 2010, so all suspendedpermits will expire by Jan. 1, 2011.