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30 DECEMBER 2021
EDA SET TO ACCEPT APPLICATIONS
FOR NEW GAP FINANCING PROGRAM
or advancing other public policy objectives. The new tax credit program is now effectively open for business after the state Economic Development Authority in mid- November approved short-term rules for applicants, while setting up a 60- day public comment period for what will be permanent guidelines.
In doing so, the EDA continued its rollout of a series of new incentives created by the New Jersey Economic Recovery Act of 2020, which Gov. Phil Murphy signed into law in January.
“New Jersey’s economy is growing, and with economic growth comes the need for housing and commercial development,” Murphy said. “The Aspire Program is a much-needed incentive that will support the construction of new housing and commercial projects throughout
the state, with an emphasis on communities that have been left out of growth in the past.”
The EDA said it expected to field applications for Aspire by the end
of 2021, when ERG was set to
expire. The new framework will emphasize mixed-use, transit-oriented development in New Jersey by providing tax credits to commercial and residential developments that have a financing gap, providing up to $42 million for most projects.
According to the guidelines, awards will be based on a percentage of
a project’s eligible costs, subject
to a cap that is determined by its location, other financing available and other aspects of the development. Applicants that meet specific criteria may receive tax credits up to $60 million, while those that qualify as “transformative projects” may be awarded as much as $350 million.
Developers will be subject to a host of requirements such as complying with environmental laws, meeting green building requirements and paying wages aligned with union labor rates to construction workers and building service workers. Retail, warehouse and hospitality establishments with
a certain number of employees that are included in projects with a state proprietary interest and that receive tax credits must enter into a so-called labor harmony agreement with an organization that represents relevant employees in the state.
“Supporting equitable development and growth that aligns with communities’ priorities is central to Governor Murphy’s economic plan,” said Tim Sullivan, the EDA’s chief
executive. “The Aspire Program rules approved today establish the framework for a robust policy that will support much-needed mixed- use, transit-oriented development in communities all around New Jersey. Importantly, these rules also build in much-needed safeguards to ensure transparency, accountability and fiscal responsibility. This is an important step forward for New Jersey that will drive sustainable, inclusive growth.”
To be eligible for Aspire tax credits,
a project must be located in an eligible incentive location, which may include metropolitan and suburban areas designated by the State Plan, an aviation or port district or other designated centers that are within
a half-mile of a rail transit station
or a high-frequency bus stop, the EDA said. Film production projects anywhere in the state may be eligible for a subsidy under the program.
The authority also detailed other thresholds, including the need for
at least 100,000 square feet of retail or commercial space in commercial projects. Residential projects, meantime, must have eligible project costs totaling $5 million to $17.5 million, depending on location.
To qualify as a “transformative project” and receive subsidies above the typical cap, a development
must have eligible costs of at least $100 million and be at least 500,000 square feet or up to 250,000 square feet for film studio projects. Such projects must also demonstrate
what the EDA described as “special economic importance” to New Jersey and leverage its mass transit, higher education and other economic development assets to attract or retain employers and skilled workers.
“The Aspire Program rules that
were approved today will facilitate the development of transformative mixed-income, mixed-use projects that will promote housing opportunity and economic growth throughout our state,” said Melanie R. Walter, executive director of the New Jersey Housing and Mortgage Finance Agency. “We look forward
to working with community and development partners to implement these rules, seamlessly combining Aspire and Low-Income Housing Tax Credits, from the NJEDA and HMFA, respectively, and leveraging these valuable resources to produce high- impact, high-quality development that benefits our residents.”
State officials are set to begin taking applications under a new incentive program that will look to provide gap financing to commercial and residential projects across New Jersey.
Known as Aspire, the subsidy will take the place of the well-known Economic Redevelopment and Growth program long used by developers building near transit hubs, providing affordable housing
Tim Sullivan, CEO of the state Economic Development Authority, said the new Aspire gap financing program “will support much-needed mixed-use, transit-oriented development in communities all around New Jersey.”
ARCHITECTURE INTERIORS PLANNING REGULATORY APPROVALS
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Photo by Edwin Torres/Governor’s Office