After being shuttered for nearly two years, the New Jersey Economic Development Authority opened applications June 1 for a state incentive for residential developers, under one of a dozen programs meant to lift the state out of the COVID-19 recession.
The program is known formally as the Economic Redevelopment and Growth program, which initially expired in July 2019 amid intense public scrutiny and political fighting over ERG and the Grow New Jersey corporate tax breaks.
But the state Legislature authorized $50 million toward the program under the newly minted “New Jersey Economic Recovery Act of 2020,” which Gov. Phil Murphy signed in January after the bill was fast-tracked to his desk.
Under the extension, tax credits will cover up to 30% of certain project costs, or up to 40% for projects in the state’s poorest cities: Atlantic City, Camden, Paterson, Passaic and Trenton. The incentives cannot be used to cover debt and equity financing, according to the NJEDA, which oversees the program.
Tim Sullivan, head of the NJEDA, said in a June 1 statement the $50 million means “essential housing projects throughout New Jersey that have been on hold will be able to move forward.”
The $50 million, Sullivan said, will help kick-start many long-stalled projects while the state hashes out the specifics of Aspire and several other key incentive programs, like a state-run venture capital fund.
For much larger real estate and redevelopment projects, the broader-reaching commercial ERG will be replaced by NJ Aspire under the ERA, capped at $1.1 billion a year.
Over the years, state financing under ERG has gone toward mixed-use and commercial projects including the American Dream Mall in East Rutherford, Tropicana 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.
Like NJ Aspire, the accompanying program NJ Emerge will also be capped at $1.1 billion a year. It is set to replace Grow NJ and has much stricter job creation and retention requirements for companies considering a move out of New Jersey.
Businesses have decried those requirements as too cumbersome for existing businesses in the state eyeing an expansion, and lawmakers are looking at whether to scale them back. Either way, applications opened for NJ Emerge last week.l