By Joshua Burd
The state Economic Development Authority has launched a funding program to help reposition properties such as vacant or underused office parks, malls or health care facilities, in another move aimed at rescuing many of New Jersey’s so-called stranded assets.
The agency’s board on Wednesday voted to use $25 million in state budget funds for what it calls its Stranded Assets Repositioning Investment, under which it will explore opportunities such as joint ventures, real estate partnerships, operating partnerships and equity investments to support such projects. The EDA said it will consider investments based on unsolicited proposals from redevelopers or staff awareness in the regular course of promoting investment and development in the state, adding that projects will be evaluated equitably based on several factors, including developer qualifications, operational readiness, economic feasibility and developer engagement with the community.
The authority said it will also consider the degree to which an investment supports woman-, minority-, or veteran-owned businesses and historically underserved communities, pointing to Gov. Phil Murphy’s focus on diversity and inclusivity while spurring innovation in the economy.
“The Stranded Assets Repositioning Investment will allow the NJEDA to directly invest in long-vacant, abandoned or blighted properties, turning them into vibrant community assets,” said Tim Sullivan, the EDA’s chief executive. “This program is our latest effort to revitalize New Jersey’s neighborhoods by creating new real estate space for businesses and bolstering tax revenues for local municipalities. As economic and work trends have evolved in recent years, supporting viable commercial and mixed-use development is essential to creating sustainable and equitable growth.”
Developers and public officials have long struggled with stranded assets such as aging suburban office parks or shopping malls, following demographic shifts that have all but rendered them obsolete. That has weighed on municipal tax rolls, but the EDA has taken up the issue in recent years with grant funding to help towns and cities find solutions, paving the way for the latest program.
The authority noted that the Fiscal Year 2023 Appropriations Act, signed by Murphy on June 30, 2022, appropriated $70 million for real estate project funding that supports strategic economic development and spurs statewide economic growth. The Stranded Assets Repositioning Investments will use $25 million from those funds, evaluating projects on a case-by-case basis and considering each project’s unique characteristics to determine the total investment.
Recommended investments will then be presented to the EDA board for final approval, according to a news release. Entities entering into an investment agreement with the authority will be subject to normal legal and ethics reviews, State Ethics Commission approval, good standing with New Jersey government agencies and tax clearance certificate verification from the Department of Treasury’s Division of Taxation.
Experts say ‘stranded’ office, retail sites can thrive as new-look community hubs