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.
Day Pitney Advisory
On April 3, partners Craig Gianetti and Kate Coffey will be speaking at the 70th Annual Atlantic Builders Convention (ABC), presented by the New Jersey Builders Association (NJBA) and held in Atlantic City, NJ.
On March 20, Craig Gianetti, a partner in Day Pitney's Real Estate & Land Use group and secretary of the New Jersey State Bar Association (NJSBA) Land Use Section, will be moderating and speaking at the 2019 Land Use Update, a program presented by the New Jersey Institute for Continuing Legal Education (NJICLE) and being held at the New Jersey Law Center in New Brunswick, NJ.
Craig Gianetti and Nicole Magdziak co-authored an article, "An Update on Redevelopment and Pilots," published by Dimensions, a newsletter of the New Jersey Builders Association.
Day Pitney Alert
Peter Wolfson was mentioned in an article, "Over-Capacity Crowd for Madison Historic Preservation Commission's Hearing on Proposed Movie Theater Redevelopment," published by Tapinto.net.
Kate Coffey was mentioned in an article, "Planning Board Grants Preliminary Approval for Assisted Living Facility," published by centraljersey.com.
Day Pitney Press Release
Day Pitney represented AlphaCrest Capital Management LLC (AlphaCrest), a quantitative research and technology-driven systematic trading firm based in New York, in connection with (i) the acquisition of a minority ownership interest in AlphaCrest by Brummer & Partners, an alternative investment manager based in Sweden and (ii) an investment by Brummer's BMS Multi-Strategy fund of funds in AlphaCrest Offshore Strategies Fund Ltd., an affiliated offshore feeder fund of the investment manager.
Elizabeth Barton was quoted in an article, "Why Businesses Must Lead on Sustainability," published by the Connecticut Business and Industry Association, Inc.