The statehouse in Trenton
By Joshua Burd
State officials have approved a set of proposed guidelines for a new incentive program to support the restoration of New Jersey’s historic buildings and neighborhoods.
According to the Economic Development Authority, the Historic Property Reinvestment Program is on track to launch later this year after an upcoming public comment period and final adoption of the rules. The agency last week took the first step toward rolling out the initiative, which is designed to work in conjunction with the Federal Historic Tax Credit Program, and said that information about an application period will be forthcoming.
Full details are available on the EDA’s website.
“The HPRP is a key component of Gov. (Phil) Murphy’s broader economic development plan, which includes a focus on attracting investment toward the revitalization of the state’s iconic cities,” said Tim Sullivan, the authority’s CEO. “The rehabilitation of dormant historic properties in cities like Paterson, Trenton, Camden, Newark and Jersey City into new housing and innovation spaces will translate into long-term economic benefits and improved quality-of-life for these communities and their residents.”
The HPRP’s main focus is historic preservation as a component of community development, aiming to draw long-term private investment to New Jersey while preserving properties throughout the state that have historic value, the EDA said. Doing so will help to bring often-underutilized properties back to productive use, thereby reducing the need for new development at such locations.
The program supports not only rehabilitating and preserving the structures, but creating long-term economic benefits that can come from using the properties for job creation opportunities, transit-oriented development and market-rate and affordable housing, according to a news release. What’s more, a developer cannot utilize tax credits until the project, or a phase for certain phased projects, is completed.
The HPRP is also designed to protect the state by requiring a developer to repay as taxes any tax credits received for earlier phases if it does not complete the rehabilitation project.
“This exciting new program will serve as an important component in the revitalization of entire communities and will have a significant impact on the historic fabric of New Jersey,” said Aidita Milsted, the EDA’s director of historic preservation. “Investing in and revitalizing these historic properties will have a long-term positive impact on neighborhoods and communities across the state.”
The new offering comes as part of the New Jersey Economic Recovery Act of 2020, which Murphy signed into law just over a year ago. Championed by the governor as a replacement for the state’s previous incentives, the legislation has created a series of new tax credits and subsidies tied to job creation, gap financing for redevelopment, cleaning up polluted property and others.
Eligible projects under the HPRP must include rehabilitation of a previously identified historic structure that is listed in or in a district designated by the National or New Jersey Register of Historic Places, designated as historic by the Pinelands Commission or identified as historic by a municipality in accordance with criteria approved by the historic preservation officer, the EDA said. The amount of tax credits a project is eligible to receive is a based on a percentage of its eligible costs, subject to a cap that is determined by the location, other financing available and other aspects of the proposal.
Most eligible projects can receive tax credits worth up to 40 percent of eligible costs, with a maximum of $4 million for such properties. Those located within a qualified incentive tract or in government-restricted municipalities can receive tax credits worth up to 45 percent of eligible project costs, with a maximum of $8 million for qualified properties.
The program provides added benefits for what the EDA determines to be “transformative” projects, which are subject specific requirements regarding location, economic impact and historic designation. Such plans can receive tax credits worth up to 45 percent of eligible project costs, with a maximum of $50 million.
The HPRP is subject to an annual program cap of $50 million for a total of $300 million over six years, the news release said. Annual unused amounts may be included in the amounts available for approval in the subsequent year.
“The Historic Property Reinvestment Program will be pivotal in the state’s efforts to restore and preserve New Jersey’s history,” said Katherine Marcopul, the New Jersey Department of Environmental Protection’s Historic Preservation Office administrator and deputy historic preservation officer. “The revitalization of these iconic properties will further help us to spotlight the historic value they have for the state and the communities they serve far into the future.”
