
William C. Sullivan, Jr.
Partner
201-896-7215 wsullivan@sh-law.comFirm Insights
Author: William C. Sullivan, Jr.
Date: August 21, 2023
Partner
201-896-7215 wsullivan@sh-law.comThe New Jersey Economic Development Authority (NJEDA) is currently accepting applications for the Brownfield Redevelopment Incentive. The deadline to apply for the first round of funding is Thursday, September 21, 2023 at 5PM.
The new tax credit program, which was established under the New Jersey Economic Recovery Act of 2020, provides incentives on all phases of brownfields redevelopment, including from investigation through remediation. It can also be stacked with other tax credits, including the Aspire Program and the Historic Property Reinvestment Program.
To receive tax credits through the Brownfields Redevelopment Incentive Program, the project must be a brownfield site, which means any former or current commercial or industrial site that is currently vacant or underutilized and on which there has been, or there is suspected to have been, a discharge of a contaminant or on which there is contaminated building material.
A developer must also demonstrate, to the satisfaction of the NJDEP, that it did not discharge a hazardous substance at the brownfield site, is not in any way responsible for the hazardous substance, and is not a corporate successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to the Spill Compensation and Control Act.
Projects must also meet the following eligibility requirements:
Cannabis Businesses are not eligible for the Brownfields Redevelopment Incentive Program. Additionally, projects that received a reimbursement through the Former Brownfield Contaminated Site Reimbursement Program are also not eligible.
For the Brownfields Redevelopment Incentive Program, tax credit awards are calculated based on a percentage of the cost of remediation, with the percentage determined by the location of the project. Fifty percent of costs will be covered on typical sites up to a maximum of $4 million. Enhanced benefits of 60 percent of remediation costs up to a cap of $8 million are available for sites located in Government Restricted Municipalities (e.g., Atlantic City, Paterson, and Trenton) and Qualified Incentive Tracts. Tax credits are transferable and can be redeemed for 75 to 85 percent of their value.
Only remediation costs are eligible for the tax credits for the Brownfields Redevelopment Incentive Program. Eligible remediation costs include: soil and groundwater investigation and remediation, site remediation, hazardous materials assessment and survey, hazardous materials or waste disposal, building and structural remediation issues such as demolition, asbestos abatement, PCB removal, and contaminated wood or paint removal, and other infrastructure remedial activities as approved by NJEDA. The following uses are not eligible: cost of acquisition of the site at which the redevelopment project will be conducted, any costs incurred in financing the remediation, legal fees, incentive consultant fees, payments for penalties or violations, and NJEDA fees.
The NJEDA, in consultation with the NJDEP, will review the applications through a competitive application process. In addition to the eligibility criteria set forth above, the agencies may consider additional factors that may include, but are not limited to: the economic feasibility of the redevelopment project; the benefit of the redevelopment project to the community in which the remediation project is located; the degree to which the redevelopment project enhances and promotes job creation and economic development and reduces environmental or public health stressors in an overburdened community; and, if the developer has a board of directors, the extent to which that board of directors is diverse and representative of the community in which the redevelopment project is located.
Application fees are $2,000 for projects with total cost of remediation of $5 Million or less and $7,000 for projects with total cost of remediation greater than $5 Million. The application is now available at www.njeda.gov/brownfield-redevelopment- incentive.
The deadline to apply for theBrownfield Redevelopment Incentive is quickly approaching. Because the tax credits are awarded through a competitive application process, it is imperative to work with experienced counsel.
Scarinci Hollenbeck’s Environmental Law Group has been an integral participant in the redevelopment of many brownfield, commercial, and industrial properties throughout New Jersey. We encourage prospective applicants of the Brownfield Redevelopment Incentive Program to contact our attorneys for assistance. We can help you determine if your project qualifies for the program and, if so, help position it for success.
If you have any questions or if you would like to discuss the matter further, please contact me, William C. Sullivan, Jr., at 201-896-4100.
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