Making all the right moves

Jessica Perry//July 3, 2013

Making all the right moves

Jessica Perry//July 3, 2013

While the Economic Opportunity Act is poised to be a game-changer for job growth and capital investment, the developers whose projects attract companies to New Jersey say it’s just the beginning. Here are four other pressing priorities:


Affordable housing fees

New Jersey in 2011 enacted a second moratorium on a fee for commercial developers, which would have charged them 2.5 percent of their project costs to help fund affordable housing efforts. But the moratorium is scheduled to expire today, reigniting calls for a permanent repeal.

The fee is “a huge disincentive” to the commercial builders and potential tenants who would bear the costs, said Michael Allen Seeve, president of Mountain Development Corp., in Woodland Park. He said companies that require new facilities are committing to make a major investment, “and when you add to the mix a very significant fee that’s paid up front, which doesn’t exist in any other state, that’s a good way to scare people off.”

“(The requirement) is a major issue just because it’s so discordant,” said Seeve, who is New Jersey’s chapter president of the NAIOP, the commercial development trade group. “It stands in such stark relief to what’s available anywhere else, in a negative way. It certainly doesn’t help the state’s competitive profile.”

The Legislature late last week sent a bill to Gov. Chris Christie that would extend the moratorium through 2016. But it’s unclear whether he’ll sign it, as it’s tied to foreclosure-related legislation he has vetoed in the past.

Local buy-in

The flight of tenants from the state’s suburban office parks has forced developers to consider adaptive reuse of commercial properties in recent years, but such plans are easily thwarted when skittish municipal governments refuse to get on board.

Robert Kossar, who heads Jones Lang LaSalle’s New Jersey offices, said “you do have some municipalities with reasonable concerns” about redeveloping office space into properties with some residential component. For instance, roads may need upgrades and schools may become overcrowded. But often, developers can’t persuade zoning boards of the net benefits to the community and economy.

“I think that if some of the municipalities had a more open mind, they would see we’re talking about some significant ratable opportunities — and in some project proposals, not a material impact,” said Kossar, an executive managing director with the brokerage. “You’ve got to have an open mind, or we’re going to be stuck with these white elephants around the state.”