Evan Weiss, CEO of the New Jersey Economic Development Authority, spoke in mid-June at the New Jersey Planning & Redevelopment Conference in New Brunswick. — Photo by Tamara Fleming Photography / Courtesy: New Jersey Future
By Joshua Burd
The state Economic Development Authority is pumping the brakes on the Aspire tax credit program for developers, seeking to make it more efficient and cost-effective for applicants as it manages its remaining funds under the policy.
Evan Weiss, the authority’s CEO, announced Wednesday that it would temporarily pause applications for Aspire so that it can “process current applications, protect funding for viable projects and establish a new transparent and competitive framework.” The state expects to reopen applications in the fall, he said, but the hiatus will allow it to “review all options on how to strengthen the program” after extensive engagement with stakeholders and officials’ own reckoning that capacity is dwindling after dozens of awards in three years.
As of its June meeting, the EDA’s board had approved awards for more than $4.6 billion in Aspire tax credits, although applicants do not begin receiving the incentives until the project is completed and certified. That includes more than $2.9 billion in tax credits for so-called transformative projects, which are eligible for larger subsidies because they meet additional benchmarks, leaving only about $190 million available under that bucket.
Another $461 million or so remains for non-transformative projects, as of the EDA’s March board meeting, although that seemingly doesn’t include some $127 million that was returned to the allocation from applicants that have withdrawn.
Aspire, a gap financing program created by the New Jersey Economic Recovery Act of 2020, has supported a host of mixed-income and affordable housing developments throughout the state. It’s also helped finance high-profile investments such as the new 1888 Studios in Bayonne, Netflix’s studio campus at Fort Monmouth, the expansion of the New Jersey Performing Arts Center’s campus in Newark and the landmark HELIX innovation district in New Brunswick.
“Since its launch, the Aspire Program has supported more than 40 projects across the state, resulting in more than 7,500 new housing units for families, seniors and commuters,” Weiss said in prepared remarks Wednesday. “The program has also supported the development of film studios and major health care centers, helping drive economic activity and create new good-paying jobs.
“Still, Aspire can be better. Through listening sessions, dozens of conversations and our own data analysis it is clear that Aspire can be a difficult tool to use. It can also be an expensive one, with as much as half of Aspire credit awards paying for transaction costs. In large part because of this inefficiency, demand for the program far exceeds available resources. Governor Sherrill has made fiscal discipline a key part of her budget and economic development strategy. Ensuring Aspire tax credits do as much for the projects they are meant to support as possible is our goal.”
Notably, non-transformative projects with a completed application are expected to move forward to the EDA board for a thorough review and approval and will be distributed over several months for diligence and fairness, the authority said. Transformative projects that have already applied and have requested more than the $190 million remaining allocation will have their submission discontinued and their application fee refunded, requiring them to reapply when the program resumes under the new framework.
“We expect to reopen applications for the Aspire Program in the fall,” Weiss added. “We are committed to updating the program with clearer standards, a stronger emphasis on fiscal discipline and project readiness and, most importantly, alignment with Governor Sherrill’s economic development and budget priorities.
“We look forward to working with key stakeholders, industry leaders and government partners to ensure changes are done responsibly and will result in the greatest economic impact for communities across the state.”
