Last week, New Jersey Governor Phil Murphy introduced his new economic agenda, including several new and revamped tax incentive programs.
Gov. Murphy's economic development "master plan" outlined four basic pillars: investment in people, investment in communities, building up the innovation economy, and streamlining application processes and bureaucracies. Importantly, these pillars and the economic plan provide for investment into the state's urban centers by creating new incentive programs and overhauling the Grow New Jersey (Grow NJ) and Economic Redevelopment and Growth (ERG) programs.
The new tax incentive programs include a new tax credit tied to "Brownfields" cleanups and a historic preservation project tax credit. Brownfields consist of vacant commercial and industrial sites that have been contaminated or are suspected to contain environmental contamination. The governor is proposing a remediation and redevelopment tax credit and a dedicated loan fund through the Economic Development Authority to incentivize cleaning up and developing such sites. The governor is also proposing a new Historic Preservation Tax Credit program, which would complement the existing federal programs, to assist with rehabilitating historic sites into housing or mixed-use developments.
Because the Grow NJ and ERG programs are scheduled to sunset on July 1, 2019, the governor also introduced two new programs that would revamp Grow NJ and ERG. The NJ Aspire program would be a place-based gap financing tool to aid in developing underutilized, abandoned or vacant lots into job- and tax-generating development, with a focus on cities, downtowns and suburban neighborhoods served by mass transit. NJ Aspire would be structured as a competitive tax credit grant funded through the Economic Development Authority, awarded to the most impactful and development-ready plans. NJ Forward is the governor's proposal to revamp the Grow NJ program by preserving the best features of the existing program and making important fiscal and economic reforms. The goals of NJ Forward include focusing on high-wage, high-growth sectors, prioritizing new job creation, and rewarding companies that invest in employee skill development. The program will also include an annual award cap and review to ensure fiscal sustainability.
Although it is not a state program, the governor anticipates utilizing the federal Opportunity Zone program, which will give private investors preferential treatment for spending in distressed neighborhoods. New Jersey has identified 169 "opportunity zones," and the state created a zone-mapping tool so that municipalities and private investors can take advantage of the program once final rules are in place.
While these programs are proposals that still require legislative approval, they offer a glimpse into the governor's vision for the future of commercial real estate development in New Jersey.
Should you have any questions concerning the development of these proposals or real estate matters in general, please contact the authors of this alert or any of the Day Pitney real estate team.
On January 17, Craig Gianetti and Justin Hannan will be speaking on a panel, "Low Income Housing Tax Credits and Opportunity Zones: Synergies and Conflicts," at the 2020 Economic Leadership Forum, produced by the New Jersey Bankers Association.
On December 11, Craig Gianetti will be speaking at "The Land Use Institute: Mt. Laurel and Other Hot Topics," a program presented by the New Jersey Institute for Continuing Legal Education (NJICLE) in cooperation with the New Jersey State Bar Association (NJSBA) Land Use Section and the New Jersey Chapter of the American Planners Association.
On October 25, Christopher Stracco and Katharine Coffey co-presented a webinar for the New Jersey Institute of Continuing Legal Education (NJICLE), entitled "The Legal Aspects of Electronic Billboards and Signs."
Katharine Coffey and Peter Wolfson are serving as the organizers of Redevelopment Planning Law, a two-day course presented by the New Jersey Redevelopment Authority Redevelopment Training Institute (NJRA-RTI) that will be held on October 23 and 24 at Kean University in Union, NJ.
Day Pitney Alert
Day Pitney LLP announced today that April F. Condon has joined the firm as a partner in the Real Estate and Environmental group in its Stamford office. She joins from Robinson & Cole LLP.
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Firm Ranked Tier 1 Nationally for Energy Law and Trusts and Estates Law
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Craig Gianetti, a partner in Day Pitney's Real Estate & Land Use group, has been elected to serve as Vice Chair of the Land Use Law Section of the New Jersey State Bar Association (NJBSA).
Day Pitney's representation of Cottontail Holdings LLC and Two Franklin Realty is noted in an article, "NJ Office Complex Overvalued By $15M, State Tax Court Says," published by Law360 Tax Authority.