NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY OPENS APPLICATIONS FOR NEWLY-REVISED INCENTIVE PROGRAMS
Landmark legislation supports small and mid-size businesses and New Jersey cities
TRENTON, N.J. – (November 19, 2013) The New Jersey Economic Development Authority (EDA) is accepting applications for the sweeping incentive programs created by the New Jersey Economic Opportunity Act of 2013, two months after the Act was signed into law by Gov. Chris Christie on September 18, 2013.
“These incentive programs broaden and strengthen our ability to support New Jersey businesses,” said Michele Brown, EDA CEO. “They will stimulate new economic development, job creation, help small and mid-size businesses and support our cities.”
The Grow NJ Assistance (Grow NJ) program is now the state’s main job incentive program and the Economic Redevelopment and Growth (ERG) program is now the key developer incentive program. These enhanced programs will support businesses looking to grow throughout the state and provide New Jersey with a more effective tool to encourage development and job growth in targeted areas.
The new law merged the state’s five largest economic development incentives, while expanding geographic boundaries and lowering eligibility thresholds for ERG and Grow NJ to enhance the state’s ability to attract and retain businesses, thereby fueling job creation via economic incentives. The revised programs place extra emphasis on spurring development and private sector job growth in certain smart growth areas, distressed municipalities and transit oriented locations and in certain targeted areas, such as “Garden State Growth Zones” identified in the Act as the four lowest median family income cities in the state: Camden, Trenton, Passaic City and Paterson.
To enable smaller businesses to qualify for incentives, the revised Grow NJ program expands geographic boundaries within which businesses can qualify for Grow NJ tax credits and lowers capital investment and employment eligibility requirements. The extension of eligibility in the Grow NJ program to businesses creating between 10- 35 new jobs or retaining between 25- 50 full-time jobs, reduced from 100 new or retained full-time jobs, is intended to provide additional help for small businesses in the state.
Tech start-ups and manufacturing businesses require just 10 new and retained jobs to be eligible under Grow NJ and minimum capital investment and minimum employment numbers are lowered for eight South Jersey counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean and Salem.
The Grow NJ tax credit, ranging from $500 – $5,000 per job, is tied to various factors, including the location of the project, the number of jobs created or retained, the average salary of the jobs, as well as other factors. Bonus credits, ranging from $250 – $ $5,000 per job, per year, are available to drive development into certain smart growth areas of the state.
The ERG program offers state incentive grants to finance development in projects that demonstrate a financing gap. As the state’s key developer incentive program, the ERG prioritizes development and job creation in smart growth locations that already have infrastructure, particularly near train stations and in cities. Its provisions increase state and local incentive grants, including bonus awards to incent projects advancing public policy goals, and the allocation of tax credits for residential projects.
The new bonus awards include bringing fresh produce to urban “food deserts”, rebuilding tourism destinations that were destroyed by Superstorm Sandy, and supporting development in urban centers, which have historically struggled with redevelopment due to project financing gaps.
The ERG program provides significant support – $600 million – for “qualified residential projects” which refers to redevelopment projects that are predominantly residential, including multi-family residential units or dormitory units. Of the total, $250 million is allocated for eligible projects within the eight southern counties ($175 million of which is exclusively for Camden); $250 million is designated for projects in Urban Transit Hubs, Garden State Growth Zones, disaster recovery projects and certain others. The remaining $100 million provides $75 million for projects in distressed municipalities, deep poverty pockets, highlands development credit receiving areas or redevelopment areas, as defined in the Act; and $25 million is for projects not meeting these geographic criteria.
The EDA Board will maintain its standard test that the project must return to the state a minimum of 110% of the approved benefit. All submitted projects will be subject to a comprehensive net benefit analysis to verify that the revenues for the state will be greater than the incentive being provided.