The New Jersey Economic Opportunity Act of 2013 was signed into law on September 18, 2013. The Act streamlines New Jersey’s 5 existing economic development incentive programs into 2. The Grow Now New Jersey Assistance (Grow NJ) Program will be the main job creation and retention incentive program. Grow NJ is for businesses creating or retaining jobs and making a capital investment in a Qualified Incentive Area and that meet or exceed minimum employment and capital investment requirements. Businesses may apply for grants of corporate business and insurance premiums tax credits for job creation/retention.
The Economic Redevelopment and Growth (ERG) program is an incentive for developers and businesses to address revenue gaps in development projects, defined as having insufficient revenues to support the project debt service under a standard financing scenario. It can also apply to projects that have a below-market development margin or rate of return. The grant is not meant to be a substitute for conventional debt and equity financing. In order for a project to be approved, it undergoes a rigorous analysis of the sources and uses of funds, construction costs and projected revenues. Qualified projects in areas targeted for growth in New Jersey include residential development projects that are predominantly residential and include multi-family residential units for purchase or lease, or dormitory units for purchase or lease and commercial redevelopment projects that are predominantly commercial and include retail, office and/or industrial uses for purchase or lease.
Residential projects that do not generate tax revenues can qualify for tax credits that can be assigned to lenders for project financing. A tax credit of up to 20% of total project cost and a bonus of an additional 10% (for a total of 30%) if the project constructs and reserves at least 10% of the residential units for moderate income housing. Commercial projects receive an incentive grant reimbursement of up to 20% total project cost, with additional grant funding possible based on project type and/or location. EDA will analyze the developer’s financing structure to verify a “gap” or financial need. This review may result in assistance of up to 20% of the total eligible costs, and up to 40% if the following criteria are evidenced:
- up to an additional 20% (e.g., a total maximum of up to 40%) if located in one of the 4 Garden State Growth Zones (Camden, Trenton, Paterson, and Passaic)
- up to an additional 10% (e.g., a total maximum of up to 30%) if the project is one or more of project types or located in one or more of the locations listed below
The EDA is no longer accepting applications for assistance under the Business Employment Incentive Program (BEIP), Business Retention and Relocation Assistance Grant (BRRAG) program, and Urban Transit Hub Tax Credit (UTHTC) programs. Application for those 3 programs that have been submitted prior to the enactment of the new law and were processed by December 31, 2013 are still valid.