The state Economic Development Authority will temporarily stop accepting applications for residential projects under the Urban Transit Hub tax credit program, agency officials said today, as the demand for residential tax credits has outpaced availability.
At the EDA’s monthly board meeting, in Trenton, CEO Caren S. Franzini said the incentive program was about $30.5 million from reaching its $250 million cap on residential tax credits. She recommended the remaining allocation be reserved for projects that were previously approved and “ready to go,” but in need of additional credits to close their financing gaps.
That means several residential projects in the EDA’s application pipeline should be put on hold as the authority reviews its other allocations under the four-year-old Urban Transit Hub program, Franzini told the board. The program’s statutory $1.5 billion tax credit bank includes its main portion for commercial projects, of which about $253.5 million remains; a $200 million allocation for the Grow New Jersey Assistance Program and a $100 million set-aside for offshore wind projects.
“There are a lot of great, worthwhile projects on the residential side, but really we can’t accommodate them all today,” Franzini said.
A bill introduced by state Sen. Raymond J. Lesniak (D-Union) would set aside another $1 billion for the Urban Transit Hub program.
In the meantime, the EDA will continue to accept applications for commercial projects through September, Franzini told the board. At that time, the agency will review its commercial project pipeline, with an eye toward “ready-to-go” projects, and determine whether more tax credits should be diverted to residential projects and Grow New Jersey, she said.
Franzini’s recommendations, which were backed by the EDA board, came after the agency conducted a month-long review of its application pipeline and remaining tax credits under Urban Transit Hub. The recommendations revolve in part around a series of deadlines tied to the program: all applications for commercial and offshore wind projects must be submitted by next January, while applications for residential projects and projects under Grow New Jersey must be submitted by July 2014.
“I don’t think this comes as a complete surprise to anyone,” board Chairman Alfred C. Koeppe said. “These programs have experienced great demand and they have finite resources. And it’s our obligation, as a fiduciary agent for the state, to administer them sensibly.”
After Franzini’s report, the EDA board approved a $17.7 million, 10-year Urban Transit Hub tax credit for Pennrose Properties LLC, which is proposing a 256-unit residential development in Trenton. The approval amends and increases an October 2009 award for the Trenton Housing Authority, which owns a piece of the project site, but needed to find a developer and change its financing plan before proceeding.
The EDA tax credit is one of several state and federal financing tools helping to fund the mixed-income, affordable rental housing project, Franzini told the board.
The board also took action on several other items, including a preliminary approval of a Redevelopment Area Bond for a mixed-use project in downtown Newark. The project, by Tucker Development Corp., is called Springfield Avenue Marketplace; it calls for an 11.6-acre development that includes retail space and an apartment complex.
Also approved was a $5.6 million Economic Redevelopment and Growth grant for MSST Fidelco Properties LLC. The applicant, which is a partnership of developer Marc E. Berson and Hanini Group, has proposed a $34.2 million project that calls for renovating a string of aging properties around Market Street, in Newark, into new residential and commercial space.
Correction: A previous version of this story listed an incorrect amount for a bond awarded to Tucker.