Scarinci Hollenbeck, LLC
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201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: March 12, 2021
The Firm
201-896-4100 info@sh-law.comNew Jersey developers, property owners, and potential buyers may be eligible for a new loan program that can help offset the costs of brownfields redevelopment. However, the clock is ticking — applications for the Brownfields Loan Program must be submitted by April 13, 2021.
The Brownfields Loan Program provides financing to potential brownfield site purchasers and current brownfield site owners (including local government redevelopers) that intend to develop commercial (including but not limited to manufacturing), retail, mixed-use developments, expansions, or reuses. The minimum loan amount is $100,000, while the maximum loan amount is $5 million.
In order to participate in the program, applicants must be able to demonstrate site control or a path to site control. In addition, the applicant must provide owner equity equal to a minimum of 10 percent of the appraised value of the property in a remediated state.
With regard to site eligibility, the program is available to any former or current commercial or industrial site that is currently vacant or underutilized and on which:
If approved, Brownfields Loan proceeds may be used for a wide-range of costs associated with the investigation, assessment, and remediation of a brownfield, including but not limited to:
Use of funds can’t be duplicative of other approved State or Federal grants previously awarded that would pay for the proposed use of funds.
Projects seeking financing must submit an application, which will be evaluated during competitive application rounds established by NJEDA. Applications must be accompanied by a letter of support from the mayor of the municipality in which the brownfield site is located (or the governing body if the position of mayor does not exist)
Applications that meet the base eligibility requirements are further reviewed and scored by NJEDA using scoring criteria based upon the local or economic impact of the brownfields site/proposed project. Factors that are taken into consideration include:
The application fee is $2,500. Additional details regarding the application are available at https://www.njeda.com/bfloans.
Additional economic assistance for brownfields redevelopment is also coming in the form of tax incentives. The Brownfield Redevelopment Incentive, which was established under the New Jersey Economic Recovery Act of 2020, will provide tax credits to support brownfields remediation projects.
The Brownfield Redevelopment Incentive is a one-time tax credit intended to support costs associated with assessment, investigation, and remediation activities, as well as hazardous materials abatement, waste disposal, and structural remediation. The program is subject to a $50 million annual cap with a maximum $4 million tax credit per project. Tax credits will be awarded through a competitive application process, which the NJEDA is expected to announce later this year.
Given that the Brownfields Loan Program closes on April 13, 2021, time is of the essence. To determine if your business may benefit from the new loan program, we encourage you to contact a member of the Scarinci Hollenbeck Land Use Group at 201-896-4100.
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