Tim Sullivan, the CEO of the state Economic Development Authority — Photo by Edwin Torres/Governor’s Office
By Joshua Burd
State officials have added a new financial tool for property owners seeking to clean up and redevelop contaminated sites in New Jersey.
At its monthly board meeting on Tuesday, the Economic Development Authority approved the creation of a new Brownfields Loan Program, which will provide low-interest financing of up to $5 million to help remediate sites that are vacant or underutilized. Both current owners and prospective buyers are eligible under the program, which will offer an interest rate of no more than 3 percent with potential reductions if the project meets other public policy goals.
According to the EDA, the bridge loans will be geared specifically toward the cleanup phase of a redevelopment project. That means they can be used to cover the costs associated with site investigation, assessment and remediation, along with building and structural issues such as demolition and asbestos removal.
All projects must include a redevelopment plan for the reuse of the remediated site.
“Investing in communities is a pillar of our plan for a stronger and fairer New Jersey economy, and the brownfields loan program is a crucial tool we can use to build cleaner, safer communities where businesses and families can thrive,” Gov. Phil Murphy said. “Cleaning up contaminated sites and repurposing them for productive use allows us to achieve our goals for economic growth while protecting our environment and minimizing sprawl.”
The EDA will vet each project application to determine eligibility, focusing on whether the project is economically feasible and if a funding gap exists. The authority also noted that the remediated property must have an appraised value of at least 100 percent of all debt financing, including the proposed brownfields loan, while the applicant must submit a report documenting and verifying the contamination.
The state expects to hold competitive application rounds for the funding, according to a news release. The EDA will then score projects based on criteria such as site location, the length of time the site has been vacant or underutilized and alignment of the redevelopment project to local redevelopment plans.
The authority will also consider an interest rate lower than 3 percent if the redevelopment project supports certain community development goals, including:
- Mixed-use residential development with an affordable housing component
- Food delivery sources in urban food deserts
- Primary health care services
- Tourism destination projects
- Electric vehicle charging stations
- Smart growth parking (convertible to commercial space)
- Incubators and collaborative workspaces
“Transforming contaminated sites into productive projects that enhance the areas where they are located is one of the most effective investments we can make in New Jersey’s communities,” said Tim Sullivan, the authority’s CEO. “The brownfields loan program and proposed remediation and revitalization tax credit will play a crucial role in getting these projects off the ground and bringing new life to communities around the state.”
Applications for the Brownfields Loan Program will be available in the coming months.