Project Development/Infrastructure/P3

April 29, 2020June 11, 2020 by Brad A. Molotsky

COVID-19: NJ Executive Order 128 allows for the use of Security Deposits to pay for Rental Obligations

Late last week (April 24, 2020), NJ Gov. Murphy signed Executive Order No. 128 (“EO”). The EO takes effect immediately and will remain in effect until the end of the public health emergency established by Executive Order No. 103 (2020). The EO applies in the context of residential leases (not commercial leases, given the ambit of the Security Deposit Act).

The EO allows residential tenants to use their security deposit for the payment of rent (per N.J.S.A. 46:8-19 et seq., a security deposit and any accumulated interest and earnings of such deposit remain the property of the tenant).

Upon a tenant’s written request, which may be an electronic communication, a security deposit that is governed by the provisions of N.J.S.A. 46:8-19 et seq. and the tenant’s portion of any interest or earnings that have accumulated may be applied or credited toward rent payments due during the public health emergency or up to 60 days after the public health emergency terminates. The use of a security deposit for the payment of rent will NOT be considered a violation of N.J.S.A. 46:8-19 et seq.

After a tenant has applied or credited the security deposit, interest or earnings to pay rent for the duration of the tenant’s current lease, the landlord can still charge the tenant any money the landlord expends that would have been reimbursable by the security deposit.

Per the EO, the tenant is NOT obligated to make any further security deposit relating to the current term of the contract, lease or license agreement.

If the tenant and landlord extend or renew their contract, lease or license agreement, the tenant will then be required to replenish the security deposit in full if it was previously used for the payment of rent, on the LATER of (A) the date that is 6 months following the end of the public health emergency and (B) on the date on which the current contract, lease or license agreement is extended or renewed.

Note: Pursuant to an earlier Executive Order, EO 106, residential evictions and foreclosures have been halted (i.e., “stayed”) for the time being until the public health emergency has been lifted by the Governor.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Paul Josephson, Elizabeth Mincer, Jimmy Greenberg or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 29, 2020April 29, 2020 by Brad A. Molotsky

COVID-19: NJ names 21 Member COVID Taskforce

NJ has officially announced the 21 members of its COVID Taskforce. According to Governor Murphy, the NJ taskforce “is composed of experts in a multitude of fields — from academia to industry to the arts to labor, and so much more,” he said. “They bring passion and vision to the table. And, if there’s anything we need right now, it’s both.”

The group will include 16 members and 5 ex-officio members from the Murphy administration. It will be co-chaired by Merck Chair and CEO Ken Frazier and former Princeton President Shirley Tilghman.

“They will address core economic issues, but also issues which directly impact economic health — notably public health, workforce issues and transportation,” he said. “And, they will seek ways to sustain our recovery by maximizing future federal support, especially for our small business sector.”

The members are:

Co-chairs:

Ken Frazier, Merck chairman and CEO;

Shirley Tilghman, president emerita of Princeton University and professor of molecular biology & public policy.

Sitting members:

Ben Bernanke, former two-term chair of the Federal Reserve and distinguished fellow in residence with the Economic Studies Program at the Brookings Institution;

Rich Besser, CEO and president of the Robert Wood Johnson Foundation and former acting director of the Centers for Disease Control and Prevention;
Evelyn McGee Colbert, founding board member and president of Montclair Film, and vice president of Spartina Productions;

Anthony Coscia, chairman of Amtrak, partner and executive committee member of Windels Marx Lane & Mittendorf, and chairman of Suez North America Inc.;

Jessica Gonzalez, founder and CEO of InCharged and founder of Experience VendX.

Jonathan Holloway, incoming Rutgers University president;

Lisa Jackson, vice president of environment, policy and social initiatives at Apple Inc. and former administrator of the U.S. Environmental Protection Agency under President Barack Obama;

Jeh Johnson, former secretary of homeland security under Obama, and partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP;

Charlie Lowrey, chairman and CEO of Prudential Financial Inc.;

Denise Morrison, founder of Denise Morrison & Associates, senior adviser for PSP Partners and former CEO and president of Campbell Soup Co.;

Bill Rodgers, professor of public policy and chief economist at the Heldrich Center for Workforce Development at Rutgers University and former chief economist at the U.S. Department of Labor;

Neera Tanden, president of the Center for American Progress and CEO of the Center for American Progress Action Fund;

The Rev. Dr. Regena Thomas, director of the Human Rights and Community Relations Department of the American Federation of Teachers and former New Jersey secretary of state;

Richard Trumka, national president of the AFL-CIO.

Ex-officio members:

Sheila Oliver, lieutenant governor;
Judith Persichilli, health commissioner;
George Helmy, chief of staff;
Matt Platkin, chief counsel;
Kathleen Frangione, chief policy adviser

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Paul Josephson, Elizabeth Mincer, James Greenberg or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 27, 2020 by Brad A. Molotsky

COVID-19: PA Announces May 1 reopening for Golf Courses, Marinas and Privately Owned Camp Grounds

As of May 1, PA will allow golf courses and marinas and privately owned campgrounds to re-open.

Golf Courses – as reported by Paul Gough of the Pittsburgh Gazette, the reopening will be statewide but also include specific physical-distancing guidelines, including “no gatherings of any kind and appropriate social distancing of 6 feet between individuals is strictly abided” by the golf courses, according to the regulations updated Monday afternoon.

Only 1 person will be permitted per cart without caddies. Only takeout or delivery is allowed for restaurants and banquets and social gatherings at the club houses are NOT allowed.

Marinas – will be required to adhere to physical distancing, and chartered watercraft or rental activity isn’t allowed.

State campgrounds – will remain closed until May 14, 2020.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Matt LoBello or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 27, 2020 by Brad A. Molotsky

COVID-19: NJ Announces 6-Point Plan and Methodology for ReOpening the State – “The Road Back”

Gov. Murphy announces NJ’s 6-point reopening plan called “The Road Back: Restoring Economic Health Through Public Health.”

The Governor also reiterated that his “Stay-at-Home” executive order will remain in effect until further notice.” The plan also calls for a measurable drop in cases over a 14-day period before a reopen happens.

Murphy’s press conference focused on:

• The Shore – hoping “we have some semblance of norm” at the Jersey Shore this summer, beginning on Memorial Day weekend, but “I just don’t envision being in tight spaces without real restrictions on capacity and social distancing.”

• Workplaces – the first workplaces and venues to reopen will be the ones where the state has a “high confidence” that social distancing can take place.
• Bigger Gatherings – concerts, he said, are not going to happen “anytime soon.”

• Parks – he hopes “sooner or later” that parks can reopen, saying he may agree with the argument that they’re essential “for mental health and other reasons.”

• Schools – he indicated that NJ is “still a number of weeks away” from a full reopening, but that there is “a chance” schools could reopen by May 15.

The 6 key principles (based in science and facts) will guide “the process for lifting restrictions and restoring New Jersey’s economic health through public health.”

“Restarting New Jersey’s economy and returning people to work will be done methodically, strategically, and responsibly,” he said.

Principle 1: Demonstrate Sustained Reductions in New COVID-19 Cases and Hospitalizations:

• The state must show a 14-day trend lines showing appreciable and sustained drop in cases, hospitalizations, and other metrics; and
• Hospitals must step down from functioning under crisis standards of care.

Principle 2: Expand Testing Capacity:

• The state must at least double current diagnostic testing capacity;
• The state must prioritize testing for health care workers, essential personnel, and vulnerable populations;
• The state must provide a flexible testing plan accessible to all residents;
• The state must expand partnerships with institutions of higher education, private-sector labs, and the federal government; and
• The state must ensure that those who test positive are linked to a health care provider.

Principle 3: Implement Robust Contact Tracing:

• The state must recruit and deploy an army of personnel who will identify and follow-up with contacts. The state Health Department has said it’s going to need to hire anywhere from 15 to 81 contact tracers per 100,000 people, or 1,500 to 7,000 people statewide;
• The state must leverage technological data and innovative solutions to increase efficiency; and
• The state must coordinate the approach of local and state health officials, which will have a coordinated county/regional component.

Principle 4: Secure Safe Places and Resources for Isolation and Quarantine:

• To the greatest extent possible, the state must provide individuals who do test positive in the future with a safe and free place to isolate and protect others from COVID-19; and
• The state must ensure that quarantined contacts are provided supportive services, if needed.

Principle 5: Execute a Responsible Economic Restart:

• The state must create the “Governor’s Restart and Recovery Commission” to advise on the process and recommend responsible and equitable decisions;
• The state must plan for a methodical and strategic return to work based on level of disease transmission risk and essential classification;
• The state must continue social distancing measures where feasible and appropriate; and
• The state must leverage any available federal funds and programs to support health care, individual, and small business recoveries.

Principle 6: Ensure New Jersey’s Resiliency:

• The state must learn from the lessons of COVID-19 and prepare for the possibility of a resurgence;
• The state must ensure hospitals, health care systems, and other health delivery facilities have inventories of personal protective equipment and ventilators;
• The state must build its own state personal protective equipment and ventilator stockpile; and
• The state must create a playbook for future administrations for the next pandemic.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Paul Josephson, Elizabeth Mincer, James Greenberg or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 27, 2020 by Brad A. Molotsky

COVID-19: PA Announces Methodology for Phased Re-Opening Approach (50 new cases per 100,000 of population for 14 days)

Governor Wolf elaborated on the PA Department of Health metrics for Re-Opening and included an example to aid in calculation.

A target goal for reopening has been set at having fewer than 50 new confirmed cases per 100,000 population reported to the department in the previous 14 days. So, for example, an area with a population of 800,000 people would need to have fewer than 400 new confirmed cases reported in the past 14 days to meet the target. An assessment will determine if the target goal has been met. The administration will work closely with county and local governments to enable the communities to reopen and transition back to work.

The target data goal is not the only metric to be met before reopening a region. Additionally, the Commonwealth is also focusing on ensuring that there is:

• Testing – Enough testing available for individuals with symptoms and target populations such as those at high risk, health care personnel and first responders.

• Case Investigation – Robust case investigation and contact tracing infrastructure in place to facilitate early identification of cluster outbreaks and to issue proper isolation and quarantine orders.

• Safeguards – Identification of an area’s high-risk settings including correctional institutions, personal care homes, skilled nursing facilities and other congregate care settings, and assurance that facilities have adequate safeguards in place such as staff training, employee screening, visitor procedures and screening and adequate supplies of PPE to support continued operations.

PA will be relying on a modeling dashboard under development and evaluation by Carnegie Mellon University to take a regional and sector-based approach to re-openings, the easing of restrictions and public health response.

The full PA plan is available here: https://www.governor.pa.gov/process-to-reopen-pennsylvania

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Eve Klein, Elizabeth Mincer, Matt LoBello or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 27, 2020 by Brad A. Molotsky

COVID-19: NY announces Phased Approach for Re-Opening

On April 27th, Governor Cuomo outlined a phased plan to re-open New York starting with construction and manufacturing. Based on CDC recommendations, once a region experiences a 14-day decline in the hospitalization rate they may begin a phased re-opening. The plan will be implemented in phases and will be based on regional analysis and determinations. NY is closely monitoring the hospitalization rate, the infection rate and the number of positive antibody tests, as well as the overall public health impact, and will make adjustments to their plan and other decisions based on these indicators.

• Phase 1 – Phase 1 will include opening construction and manufacturing functions with low risk.

• Phase 2 – Phase 2 will open certain industries based on priority and risk level. Businesses considered “more essential” with inherent low risks of infection in the workplace and to customers will be prioritized, followed by other businesses considered “less essential” or those that present a higher risk of infection spread. As the infection rate declines, the pace of reopening businesses will be increased.

• Large Gatherings – the region must not open attractions or businesses that would draw a large number of visitors from outside the local area.

• 2 week Monitoring – there will be two weeks in between each phase to monitor the effects of the re-opening and ensure hospitalization and infection rates are not increasing.

• Coordination – the plan will be implemented with multi-state coordination, especially in downstate New York. The plan will also coordinate the opening of transportation systems, parks, schools, beaches and businesses with special attention on summer activities for downstate, public housing and low-income communities, food banks and child care.

• Employee Protections – the phased re-opening will also be based on individual business and industry plans that include new measures to protect employees and consumers, make the physical work space safer and implement processes that lower risk of infection in the business. The state is consulting with local leaders in each region and industry to formulate these plans.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 24, 2020April 28, 2020 by Brad A. Molotsky

COVID-19: PA Construction Guidance – May 1, 2020 Return to Work – Philadelphia Follows Form

As the construction industry prepares to resume work, the Wolf Administration today issued guidance for all construction businesses and employees to attempt to mitigate the spread of COVID-19.

All businesses in the construction industry in Pennsylvania are permitted to resume in-person operations starting on Friday, May 1 – one week earlier than previously announced.

Previously, Governor Tom Wolf and Secretary of Health Dr. Rachel Levine ordered most construction projects to cease unless they were supporting life-sustaining businesses or activities or were granted an exemption to perform or support life-sustaining activities.

The guidance, developed from guidance created by the General Contractors Association of Pennsylvania, provides universal protocols for all construction activity, as well as specific additional guidance for residential, commercial and public construction projects.

All business and employees in the construction industry are required to adhere to the Secretary of Health’s order providing for business safety measures, which requires that every person present at a work site wear masks/face coverings unless they are unable for medical or safety reasons and requires that businesses establish protocols upon discovery that the business has been exposed to a person who is a probable or confirmed case of COVID-19.

All construction projects must maintain proper social distancing and provide hand washing and sanitizing stations for workers, as well as cleaning and sanitizing protocols for high risk transmission areas. Businesses must identify a “pandemic safety officer” for each project or work site, or, for large scale construction projects, for each contractor at the site.

Residential construction projects may not permit more than 4 individuals on the job site at any time, not including individuals who require temporary access to the site and are not directly engaged in the construction activity.

For non-residential or commercial projects, the number of individuals permitted on enclosed portions of a project varies depending on the size of the enclosed site. Commercial construction firms have been encouraged to strongly consider establishing a written safety plan for each work location containing site specific details for the implementation of this guidance to be shared with all employees and implemented and enforced by the pandemic safety officer.

Contractors performing work at the direction of the Commonwealth, municipalities or school districts should defer to those public entities to determine what projects may continue.

Local governments may elect to impose more stringent requirements than those contained in the guidance and in such instances, businesses must adhere to those more stringent requirements.

Local officials have been tasked with ensuring that construction businesses are aware that this guidance exists and notifying businesses that a complaint of noncompliance was received.

Businesses that have questions about whether guidance applies to them, may email the Department of Labor and Industry at RA-LIBOIS-BUILDINGS@pa.gov.

For the most up-to-date information on COVID-19, Pennsylvanians should follow www.governor.pa.gov and www.doh.pa.gov.

Philadelphia Mayor Jim Kenney said on 4-28 that with some limited exceptions, construction projects that were subject to the State Shutdown Order on March 20 will be allowed to resume in Philadelphia this Friday, May 1. This decision comes in light of the earlier announcement by Governor Wolf that construction business in Pennsylvania can resume on Friday.

“We are currently reviewing that order with respect to construction work in Philadelphia, and we will have more details tomorrow on the extent to which work can return in the city,” said the Mayor. “Construction managers and workers will have to consistently follow practices that keep their workers and the community safe. I’m confident that this will prove to be a much-needed boost to economic activity in the city. And I’m equally confident that everyone involved will be vigilant about adhering to these safe procedures and protocols as this work resumes.”

https://www.phila.gov/2020-04-28-city-provides-update-on-covid-19-for-tuesday-april-28-2020/

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

April 22, 2020June 11, 2020 by Brad A. Molotsky

COVID-19: PA defers payment obligations and maturity dates by 3 months on loans from various Commonwealth Agencies (NOT a reduction in amount owed)!

Today, Department of Community and Economic Development (DCED) Secretary Dennis Davin announced that the Pennsylvania Industrial Development Authority (PIDA), Pennsylvania Minority Business Development Authority (PMBDA), and Commonwealth Financing Authority (CFA) are deferring loans and that the maturity dates and amortization schedules of all applicable loans are extended by three additional calendar months.

“As we look to the future for a phased reopening of Pennsylvania’s economy, it is imperative that we provide relief to businesses affected by the administration’s stay-at-home order,” said Sec. Davin. “Businesses statewide have been cooperative and made sacrifices for the health and safety of their communities, and we are committed to supporting them through the next steps ahead.”

PIDA borrowers with payments due in April, May, and June of 2020 are deferred. All other terms and conditions of all applicable loans remain unchanged.

PMBDA borrowers with payments due in April, May, and June of 2020, including principal, interest, and any associated feeds are deferred. Accrual of interest that would be included with deferred payments is suspended. All other terms and conditions of all applicable loans remain unchanged.

CFA borrowers except for PENNWORKS loans, with payments due in April, May, and June of 2020, including principal, interest, and any associated fees are deferred. Accrual of interest that would be included with deferred payments is suspended. All other terms of all applicable loans remain unchanged.
DCED continues to update its website with financial and other resources.

Businesses seeking further guidance and clarification from DCED can also contact its customer service resource account at ra-dcedcs@pa.gov.

For the most up-to-date information on COVID-19, Pennsylvanians should follow www.governor.pa.gov and www.doh.pa.gov.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Matt LoBello or the attorney in the firm with whom you are regularly in contact.

April 21, 2020 by Brad A. Molotsky

COVID-19: Maryland issues Executive Order Temporarily Halting Residential and Commercial Evictions

Maryland Governor Lawrence J. Hogan issued Order Number 20-04-03-01 on April 3, 2020 (the “Order”) that amends and restates an order previously issued on March 16, 2020 that, among other things, temporarily prohibits evictions of tenants suffering substantial loss of income due to COVID-19. The Order expands the coverage of the original order to temporarily prohibit commercial and industrial evictions.

The Order applies to Section 8—401 of the Real Property Article of the Annotated Code of Maryland (the “Real Property Article”) (i.e. repossession following failure to pay rent when due and payable) and Section 8-402.1 of the Real Property Article (i.e. proceedings upon breach of lease) and provides that:

“No court shall give any judgment for possession or repossession, or warrant for restitution of possession or repossession of residential, commercial, or industrial real property, if the tenant can demonstrate to the court, through documentation or other objectively verifiable means, that the tenant suffered a Substantial Loss of Income.”

Under the Order “Substantial Loss of Income” is defined as:

“Substantial Loss of Income” means (i) with respect to an individual, a substantial loss of income resulting from COVID-19 or the related proclamation of a state of emergency and catastrophic health emergency, including, without limitation, due to job loss, reduction in compensated hours of work, closure of place of employment, or the need to miss work to care for a home-bound school-age child; and (ii) with respect to an entity, a substantial loss of income resulting from COVID-19 or the related proclamation of a state of emergency and catastrophic health emergency, including, without limitation, due to lost or reduced business, required closure, or temporary or permanent loss of employees.

The Order further clarifies that the fact that the tenant, or any person permissibly cohabiting with the tenant in accordance with the terms of the lease, has a confirmed diagnosis of COVID-19 or is under investigation for COVID-19, shall not constitute a “clear and imminent danger” of the tenant’s or other person’s doing harm to themselves, other tenants, the landlord, the landlord’s property, or any other person on the property, for the purposes of establishing that there has been a breach of the lease.

The Order provides that the prohibitions regarding evictions are in effect until the state of emergency is terminated and the catastrophic health emergency is rescinded.

It is noted that the Order only temporarily prohibits landlord eviction actions and does not expressly relieve or reduce any tenant payment obligations (including late fees, interest or other damages) or prohibit the application of any security deposits or the drawing of any letters of credit. Although not addressed in this Alert, it is further noted that the Order expressly prohibits the initiation of residential foreclosures, but does prohibit commercial foreclosures.

For Further Information:

If you have any questions about this Alert, please contact Thomas Totten, Gordon Knox or any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.

April 20, 2020April 24, 2020 by Brad A. Molotsky

COVID-19: PA Extends Closure Order until May 8th but will relax Auto Sales, Liquor Sales and some Construction Activities Restrictions (May 1)

On April 20, Governor Tom Wolf extended Pennsylvania’s stay-at-home order until May 8, 2020.

The governor indicated he would be using a region-by-region approach that is data-driven and will include strict social-distancing measures as he considers reopening parts of Pennsylvania.

However, he announced three actions that offer some flexibility to businesses, including permitting curbside pickup of orders at state liquor stores, allowing auto sales online and opening what he said were various construction activities statewide on May 1st. More specific guidelines will be released at a later date.

To read the full text of this Duane Morris Alert, please visit the firm website.