The New Jersey Economic Development Authority is adding a combined $150 million to a duo of state incentives meant to entice commercial and residential redevelopment in downtowns across the state.
Known as the Economic Redevelopment and Growth gap financing program, the incentive expired in July 2019 amid intense public scrutiny and political fighting over ERG and the Grow New Jersey corporate tax breaks.
But as part of the $14.5 billion New Jersey Economic Recovery Act of 2020, lawmakers and the governor approved an extension of ERG – both for residential and commercial projects – and added millions of dollars, in a bid to revitalize some of the state’s poorest cities and downtown neighborhoods.
According to a July 29 announcement, the NJEDA is adding $75 million to the pool of dollars meant to subsidize commercial redevelopments, and adding another $75 million on top of the existing $50 million to a program meant to cover the costs of residential projects.
“[E]ssential commercial and residential projects throughout New Jersey will be able to move forward while the new programs created by the Economic Recovery Act are under development,” Tim Sullivan, who heads the NJEDA, said in a July 29 statement.
The program in question under development is NJ Aspire, which is capped at $1.1 billion a year. It’s the sister program for NJ Emerge, which is also capped at $1.1 billion a year and serves as Grow NJ’s replacement. According to a recent NJ Advance Media report, the NJ Emerge program has yet to see any applicants as employers gauge the full extent of the post-COVID, work-from-home office environment.
Applications for the residential piece of ERG went live on June 1, and for the commercial ERG incentives, they go live at noon on Aug. 16.
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, have yet to actually started construction, and the developers need to show an actual gap between their available funds for the project, and its total costs.
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.
