The State has long encouraged the private preservation of historic structures, but has offered precious little monetary support towards such efforts. With the Historic Property Reinvestment Act, now pending before the State Legislature as Assembly Bill No. 896 and Senate Bill No. 2030, the State is finally proposing a significant new tax credit program to encourage the rehabilitation of qualified historic properties.

Download assembly_bill_896_gusciora1.pdf

The Act applies only to “qualified historic buildings,” which it defines as those with an individual listing on the State or National Registers of Historic Places, or those that lie within a locally designated historic district and are deemed by the district to be contributing to the district’s significance. The latter designation must be certified by the State Historic Preservation Office in order to prevent abuse of the tax credit program.

The Act will provide homeowners and business entities an economic incentive to fund the rehabilitation of such buildings by allowing a portion of the rehabilitation costs to be off-set by a credit against personal income tax or corporate business tax (as applicable). To further promote historic preservation efforts among those who are unable to themselves benefit from the credit, such credits may be transferred by purchase or assignment. Analogous tax credit transfers have successfully lured private capital into public needs housing projects.

In order for a project to qualify for the tax credit program, the rehabilitation must not commence until the tax credit application is approved. The project must also be substantial such that the total rehabilitation cost shall not be less than 50 percent of the property’s equalized assessed value. A further limitation provides that interior rehabilitation costs shall not exceed 50 percent of the total rehabilitation cost.

Up to 25 per cent of the total rehabilitation costs can be recovered by this tax credit, with a $25,000 cap for each qualified property within any ten year period. The credits will be available on a first come, first served basis since the total allowable credits are limited. For fiscal year 2008, $15,000,000 in credits will be available, increasing to $25,000,000 in 2009, $40,000,000 in 2010 and $50,000,000 in 2011 and thereafter. Of the total credits available, 2/3 will be allocated to business entities, with the remainder available to individuals.

A qualified individual applying for such a credit must either own or occupy the property as his/her principal residence for a period of 12 consecutive months following the completion of the rehabilitation. Furthermore, if the property is sold or the structure’s historic status is somehow lost within five years after completing the rehabilitation, the credit will be proportionally disallowed, from 100% during the first year down to 20% during the fifth and final year. If a disallowed project’s tax credit is sold or assigned to others, the entity holding the tax credit certificate will be liable to pay the recaptured credit.

The New Jersey Meadowlands Commission recently proposed new regulations regarding affordable housing. If adopted, all development projects within the Meadowlands District will be required to include affordable housing onsite or the developer of such projects will be required to make a payment in lieu of actually constructing affordable units. See 38 N.J.R. 3762(a). These regulations mark a dramatic transformation in the NJMC’s affordable housing policy, which previously asserted that facilitating the development of affordable housing was strictly a municipal obligation.
Click the following link to view the proposed regulations. Download 38_njr_3762a.PDF

These regulations are the NJMC’s apparent response to being named as a defendant in various Mount Laurel litigations, including the recent builder’s remedy litigation filed by Sills Cummis on behalf of Tomu Development Co., Inc., which is the only builder’s remedy awarded for property in the NJMC District and resulted in the trial court stripping East Rutherford and Carlstadt of its land use authority. See the May 19, 2006 blog entry below or click the following link to view the proposed regulations on the Tomu litigation.
Download TomuOpinion2.pdf

The 5th Annual RealShare New Jersey conference, presented by Real Estate Media, will highlight office sector recovery and redevelopment activities. Kevin Moore, a Member of the Firm’s Real Estate Practice Group, will moderate a panel entitled “Finding and Following Through on Redevelopment Opportunities.”

Date: 10/3/2006
Time: 8am – 2pm
Location: Teaneck Marriott Glenpointe
Address: 100 Frank W. Burr, Teaneck, NJ

Juris Publications has appointed the Land Use and Development Law practice group of Newark-based Sills Cummis Epstein & Gross to overhaul and revise the widely-read treatise, New Jersey Land Use, which was originally written by a consortium of authors from 1989 to 1992. One of the original authors, Thomas Jay Hall, co-chair of the Land Use and Development Law practice group at Sills Cummis, has been named Editor of the new edition. Hall will lead a consortium of Sills Cummis attorneys who will co-author the treatise, including Kevin Moore, Noah Bronkesh, Ted Zangari, John Phillips, Robert Kasuba, Steve Tombalakian, Peter Flannery and Andrew Lettington.

MORRISTOWN, NJ, JULY 10, 2006—Ted Zangari, an attorney with law firm Sills Cummis Epstein & Gross, was recently appointed to the New Jersey Advisory Council of the Trust for Public Land (TPL), the only national nonprofit working exclusively to protect land for human enjoyment and well-being.

“I am honored to join the New Jersey Advisory Council of the Trust for Public Land,” Zangari stated. “TPL has had tremendous success preserving important land tracts and creating much needed parks in some of New Jersey’s most blighted areas. I look forward to sharing my knowledge of the redevelopment process and fostering opening communications with land owners and developers to help address New Jersey’s critical need for open space and recreational choices for all of the state’s residents. After all, the essence of ‘smart growth’ is keeping residents close to where they work, learn, shop, dine and, yes, recreate.”

“The Trust for Public Land depends on the support and generosity of individuals and groups who identify with our proactive mission, and who seek to make a difference,” commented TPL’s New Jersey State Director Terrence Nolan. “We are extremely excited to welcome Ted aboard. With his extensive experience in redevelopment law and powerful relationships in the real estate industry, he is truly an asset to TPL, and we are looking forward to his valuable contributions.”

Zangari is a member of Sills Cummis Epstein & Gross in Newark. He was the only attorney among real estate professionals identified as a “Power Player” in Real Estate New Jersey magazine, was named a “Top 40 under 40” New Jerseyan in 2004 by njbiz magazine, and was named a “New Jersey Super Lawyer” for the past few years by New Jersey Monthly magazine. Earlier this year, he co-authored a white paper on economic development to Governor-Elect Corzine on behalf of the New Jersey Business & Industry Association, and earlier this month authored a similar policy paper to Newark Mayor-Elect Booker on behalf of the Newark Real Estate Board. Zangari received his law degree from Georgetown University Law Center and his B.A. from George Washington University. He is a resident of Morris Township.

Since its founding in 1972, The Trust For Public Land has helped protect more than 1.6 million acres of land in 45 states. In New Jersey, TPL has protected approximately 18,000 acres. A national nonprofit organization working exclusively to protect land for human enjoyment and well-being, TPL conserves land for people to enjoy as parks, gardens, and other natural places, ensuring livable communities for generations to come.

Tombalakian_steven_color_3
Steve Tombalakian has joined the Land Use and Development practice group at Sills Cummis. Tombalakian comes to Sills Cummis from Podvey Meanor Catenacci Hildner Cocoziello & Chattman in Newark. A licensed Professional Engineer and licensed Professional Planner in New Jersey, Tombalakian received his B.E. in Civil Engineering from Stevens Institute of Technology, his M.E. in Environmental Engineering also from Stevens and his J.D. from Seton Hall University School of Law. He is admitted to practice in New York and New Jersey, and before the U.S. Patent and Trademark Office.

The Tomu case has been causing a lot of discussion as Superior Court Judge Jonathan Harris stripped Carlstadt and East Rutherford of their zoning powers for failing to meet their obligations under the Mt. Laurel Doctrine.  Tomu Developers of Mahwah, NJ is looking to build 840 condominiums, including 140 affordable-housing units, in two 18 story towers.  Carlstadt and East Rutherford opposed this development arguing that it would create traffic nightmares and threaten adjoining site-protected wetlands.  In this NJBIZ article written by Shankar P, (5/29/06), Tom Hall, the Sills Cummis attorney representing Tomu stated: “Harris’ ruling could set a powerful precedent on behalf of builders…”  For more, please click here to read the entire article.

A May 22, 2006 njbiz article by Shankar P. discusses Newark’s proposed office and residential projects, including economic incentives, and how Mayor-elect Cory Booker may handle these proposals. Ted Zangari, Co-Chair of the Redevelopment Practice Group at Sills Cummis Epstein & Gross, predicted in the article that “He’s [Booker] going to have the city’s skyline teeming with construction cranes.” Zangari suggests that Booker “should emulate the success of Bret Schundler when he was mayor of Jersey City and dip into the financial-service industries in New York City,” and that “[l]ow-hanging fruit within the city may itself be enticing enough and not require incentives to jump-start development.” The article also discusses the revival of the Newark Real Estate Board (NREB) and reports that Zangari is writing a real estate position paper to Booker on behalf of the NREB. To read this entire article, please click here.

By Eric Peterson

TRENTON, NJ-The New Jersey EDA has taken several steps to speed up the approval process for grants awarded under the state’s Hazardous Discharge Site Remediation grant and loan program, as well as the Petroleum Underground Storage Tank remediation program. Both are jointly administered by the EDA and the New Jersey DEP.

Chief among the procedural changes cleared by EDA’s board is the delegation of greater power to the authority’s CEO and SVP to approve grant awards up to $100,000 without board approval. The various other changes are similarly aimed at speeding up the approval process.

“These changes will significantly reduce the time it takes for an applicant to receive a final determination on an application for assistance,” says EDA chief executive officer Caren S. Franzini. “We anticipate that processing time will be reduced from what can be as long as 60 days to as little as 10 days.”

To date, more than $112 million has been provided in HDSR grants and low-interest loans for businesses and communities to clean up and subsequently redevelop brownfield properties. Similarly, another $177 million has been made available to clean up, upgrade or close underground storage tanks.

To read the full article, click here.

New Jersey is a hotbed of eminent domain activity and could be the source of the next U.S. Supreme Court case on eminent domain — a case that would redefine and clarify the Court’s Kelo decision, according to a recent New York Times article. In that story, which appeared on Sunday, May 28, Ted Zangari, who co-chairs the Sills Cummis redevelopment practice group, was prominently quoted.

“The post-Kelo case I see going to the U.S. Supreme Court one of these days, and it could very well be a case from New Jersey,” said Ted Zangari, a Newark lawyer who represents developers, “would be one involving a hastily hatched redevelopment designation intended to benefit a developer who’s a benefactor of some local politician.”

The story also noted Zangari’s view that the Court, in its 5-4 decision in the Kelo case, expressed lingering reservations about redevelopment deals, which are crucial to New Jersey because the state has so little undeveloped land suitable for initial development.

The article noted that New Jersey has far more “current controversies” involving eminent domain than its neighboring states, and pointed out that more than 70 municipalities have designated “areas in need of redevelopment” which confers the power of eminent domain on local officials since the state started requiring notice of these declarations in 2003. Others carved out redevelopment zones earlier and could still act on them.