Many of the programs created under the New Jersey Economic Recovery Act of 2020, a transformative $14 billion package of incentives recently signed by Gov. Murphy that’s intended to foster economic advancement and recovery throughout the state, don’t quite fit into the work of a law firm’s redevelopment or real estate practice.
“They’re really multi-disciplinary. Rather than putting a square peg in a round hole, we should really put them in a multi-disciplinary group,” explained Steven Mlenak, who chairs the new financial incentives and economic development practice group at Greenbaum, Rowe, Smith & Davis LLP.
Mlenak’s group is comprised of attorneys that specialize in real estate, redevelopment & land use, environmental, energy, tax, and corporate law. They’re the only such group at a firm in New Jersey focused solely on addressing financial incentives programs as the state eases into economic recovery from the ongoing COVID-19 pandemic.
“We’ve always at Greenbaum assisted clients getting applications through and money that’s available at the state and federal level. With the new act, signed by the governor in January, there’s a lot more money from a lot more new programs with new regulations, new applications, and new rules, many of which we don’t even know yet because the regulations haven’t been promulgated,” Mlenak said.
Enter Mlenak to make sense of the New Jersey Aspire Program Act, a program created by the bill that provides tax credits to redevelopers to cover certain project financing gap costs. Together with the Emerge Program Act, also created by the bill, $1.1 billion has been allocated for programs less than $100 million in value. In many ways, Mlenak said Aspire is a revamping and rebranding of the New Jersey Economic Development Authority’s Economic Redevelopment and Growth Program, and Emerge is the same for Grow New Jersey.
While some programs make the old new, others are as green as can be, like the Food Desert Relief Act, a program created by the bill to provides tax credits of up to $40 million yearly, grants, and/or loans to businesses that establish and retain new supermarkets or grocery stores in food deserts.
Other programs within the act require lawyers of other specialties. Enter environmental lawyers for the bill’s Brownfields Redevelopment Incentive Program Act, or tax and corporate attorneys for its Angel Investor Tax Credit Act.
Together, the 12 members within Greenbaum’s group are counseling clients on what they can and can’t make work for them within the new bill, which also beefs up the list of what businesses must satisfy to be eligible in a way that doesn’t make it a one-size-fits-all opportunity.
For some businesses around the state and businesses trying to get into New Jersey, it could have a tremendous impact and could be the difference between expanding or bringing your business to New Jersey or not. At the same time, there’s a reality check – for certain businesses, or projects that are stick built, the implications of certain obligations under these bills may be a barrier,” Mlenak said.
For developments without an existing prevailing wage requirement, for example, the tax credit they would receive through the bill would be offset by the higher cost of doing their job. But for those already required to pay prevailing wage and within an area where costs can be further offset by higher rents once the project is complete, the programs put forth within the bill can be a boon.
Right now, as the rules and regulations that will govern the law haven’t been set, Mlenak and his colleagues spend their time fielding inquiries from and reaching out to clients to help them have ready the information that might be included in the applications when they are ready.
“Really what we’re doing, we’re reaching out to clients and saying, ‘this might be something that can help you. Let’s keep an eye on this, let’s start preparing on things we know we’ll need for an application,'” Mlenak said.
“We take pride in crafting creative, flexible and complex financing solutions that enable our clients’ projects to move forward to completion. We now continue this tradition by harnessing the full resources of this dedicated practice group,” he said.