Governor Murphy today signed Senate Bill 1323/Assembly Bill 2076, the long-awaited legislation correcting many of the impediments holding-back the use of “NJ Aspire” – a potentially powerful financial incentive that was designed to address project financing gaps through the awarding of transferable, pledgeable state tax credits to eligible proposed redevelopment projects.
State Public Financial Incentives
Update on NJ Aspire 3.0
In our previous summary of the Aspire legislation approved by both houses of the State Legislature two weeks ago and now awaiting Governor Murphy’s enactment into law (click here to view the summary of Aspire 3.0), we noted the following with respect to the usability of Aspire tax credits:
State Buyback of Tax Credits: The Aspire tax credits are only usable against the Corporate Business Tax and insurance premium taxes. Should a project redeveloper be unable to use directly or sell its credits, the State Treasury will have the discretion to purchase such credits at a floor of 0.85 cents per dollar. (Note that many of the bills’ sponsors will be introducing legislation early in the new year that would obligate the State Treasury to be the “buyer of last resort” for unutilized credits—a step that would provide the certainty and predictability that many equity investors and debt financiers give considerable weight (if not require) in the course of the underwriting process.)Continue Reading Update on NJ Aspire 3.0
Breaking News: State Legislature Just Approved NJ Aspire 3.0
Redevelopers have always struggled to make the numbers work on their proposed projects due to the unique added expenses of redevelopment not typically encountered on “greenfield” new construction projects—costs of land assemblage, environmental remediation, and structured parking, to name a few. Project financing-gaps only widened during and following COVID, as inflation drove up the cost of labor and materials and the Federal Reserve launched a rapid series of interest rate hikes. Adding to the challenge, local incentives—specifically, long-term tax exemptions (PILOTs), even when coupled with redevelopment area bond (RAB) sale proceeds—have generally not been generous enough to make the numbers work. As a result, even proposed redevelopment projects in tested, primary New Jersey cities have not always penciled-out.Continue Reading Breaking News: State Legislature Just Approved NJ Aspire 3.0
NJEDA Releases Opt-In Documents for Municipalities to Participate in Garden State C-PACE Program
Just about two months after the New Jersey Economic Development Authority (“NJEDA”) approved the Garden State Commercial Property Assessed Clean Energy program, or “C-PACE”, it has released form documents for municipalities wanting to opt into the Program. The documents include a sample ordinance and form Program Agreement to be executed by the NJEDA and the municipality. The C-PACE program will provide low interest rate loans to certain property owners, including commercial and industrial property owners and tax-exempt/nonprofit entities, seeking to undertake certain improvements expand or implement energy efficiency and water conservation (i.e. electric vehicle charging stations and improved stormwater management systems). Municipalities are required to first opt-in before property owners in their town can apply for the Program. The application process for owners has yet to commence, but the NJEDA states it will start accepting applications shortly on a rolling basis.Continue Reading NJEDA Releases Opt-In Documents for Municipalities to Participate in Garden State C-PACE Program
Summary of the Revised “NJ Aspire” Redevelopment Incentive Program
Since its launch more than two years ago, the New Jersey Aspire tax credit incentive program (“NJ Aspire”) has not been the deal-closing fund that redevelopers have so desperately needed. Thus far, NJ Aspire, like the “ERG” program which preceded it, has been unable to close, or even substantially narrow, projected financing gaps on most potential redevelopment projects across the state’s urban centers.Continue Reading Summary of the Revised “NJ Aspire” Redevelopment Incentive Program
Gov. Murphy Signs Law Amending Incentives Program to Lure Film & Digital Media
Governor Murphy today signed into law amendments to the Garden State Film and Digital Media Jobs Act, P.L. 2018, c. 56 (the “Program”). Below is a summary of the key changes to the Program:Continue Reading Gov. Murphy Signs Law Amending Incentives Program to Lure Film & Digital Media
New Jersey Economic Development Authority Proposes Brownfields Redevelopment Incentive Program
On September 1, the New Jersey Economic Development Authority (EDA) announced its plan to institute a new financial incentive program called the “Brownfields Redevelopment Incentive (BRI) Program,” part of the New Jersey Economic Recovery Act, to spur brownfield redevelopment in New Jersey. The EDA requested public feedback based on information it provided to the public (EDA Information), so that it may tweak the program before the program is established. The EDA held information sessions on September 7 and 8, to present a summary of the program. The slides provided by the EDA at the BRI information sessions are linked here and provide a detailed summary of the program. Following are highlights of key aspects of the proposed program, as set forth in the EDA Information:
Continue Reading New Jersey Economic Development Authority Proposes Brownfields Redevelopment Incentive Program