After more than two years offline, the Murphy administration formally began accepting applications from developers for a state subsidy meant to entice commercial redevelopment in downtowns across the state.
New Jersey Economic Development Authority officials on Aug. 16 opened applications from businesses for the incentive known as the Economic Redevelopment and Growth gap financing program, which has separate pots of money for commercial and residential projects. There is $75 million available under the commercial incentive, after applications opened in June for the $125 million available under the residential piece.
Over the years, state financing under ERG has gone toward mixed-use and commercial projects including the American Dream Mall in East Rutherford, the Tropicana hotel and casino in Atlantic City and the New Brunswick Performing Arts Center in its namesake city, according to public records.
The largest-ever ERG award was 2011’s $261 million to kick-start the Revel Casino Hotel in Atlantic City, but that project fell through and instead opened in June 2018 as the Ocean Casino Resort.
In June 2019, amid intense public scrutiny into ERG – and its sister program the Grow New Jersey tax breaks – Gov. Phil Murphy declined to sign a bill extending the program while its successors were hashed out. It will ultimately be replaced by NJ Aspire, which is capped at $1.1 billion a year, and was enacted as part of the New Jersey Economic Recovery Act of 2020–the successor that Murphy approved in January.
This short-term extension of ERG is meant to act as a placeholder while rules are finalized for NJ Aspire, according to NJEDA officials at a virtually-held board meeting on Aug. 11.
Developers can get compensated for up to 30% of the project costs, or 40% in Atlantic City, Camden, Paterson, Passaic and Trenton.
The projects have to be at least 100,000 square feet of retail, office, or industrial space. Developers need to show an actual gap between their available funds for the project, and its total costs, and they must have yet to have actually started construction.
