Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Brownfields Loan Program Now Open – What NJ Developers Need to Know

Author: Scarinci Hollenbeck, LLC

Date: March 12, 2021

Key Contacts

Back
Brownfields Loan Program Now Open – What NJ Developers Need to Know

New Jersey developers, property owners, and potential buyers may be eligible for a new loan program that can help offset the costs of brownfields redevelopment...

本文有中英文两种译本。欢迎点击链接查看

New 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.

Key Details About Brownfields Loan Program

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:

  • There has been, or there is suspected to have been, a discharge of a contaminant
  • There is a structure upon which abatement or removal of asbestos, polychlorinated biphenyls, contaminated wood or paint, and other structural remedial activities is necessary.
  • Any site as described above that has been remediated for industrial use but requires further remediation for mixed-use residential redevelopment.
  • Project must be economically feasible, meaning there is enough cash flow to repay debt financing, including the brownfields loan, and demonstrate a funding gap or that other financing is not currently available.
  • Project must have a plan for reuse of the remediated site.
  • Projects previously approved for reimbursement through the Brownfields and Contaminated Site Remediation Reimbursement Program are not eligible.
  • The property, in a remediated condition, must have an appraised value equal to or greater than 100 percent of all debt financing, including the requested Brownfields loan amount or applicant must demonstrate other sources of collateral.
  • Applicant must provide an LSRP report or other documentation from a qualified professional that demonstrates that the site is a brownfield site (contamination exists on the site).

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:

  • Soil, groundwater and infrastructure investigation
  • Assessment
  • Remediation
  • Abatement
  • Hazardous materials or waste disposal
  • Long-term groundwater or natural attenuation
  • Other forms of institutional controls
  • Attorney fees
  • Planning, engineering and environmental consulting
  • Building and structural issues (including demolition, asbestos abatement, PCB removal, contaminated wood or paint removal or other infrastructure remedial activities)

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.

Applying for the Brownfields Program

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 borrower/developer is a non-profit entity.
  • Level of economic/environmental distress in the municipality as determined by the brownfield site being located in one of the 50 most distressed municipality per the NJ Department of Community Affairs’ current Municipal Revitalization Index, an eligible Opportunity Zone, or a municipality serviced by NJ Department of Environmental Protection’s Community Collaborative Initiative.
  • Proximity to public transportation – The project is located in a Planning Area 1 (Metropolitan) and within a one-half mile radius, with bicycle and pedestrian connectivity, to the mid-point of a New Jersey Transit Corporation, Port Authority Transit Corporation, or Port Authority Trans-Hudson Corporation rail, bus, or ferry station, including all light rail stations, or a high-frequency bus stop as certified by the New Jersey Transit Corporation.
  • The consistency between the proposed plan for the reuse of the brownfield site and local redevelopment plans.
  • The amount of the projected new tax revenues generated from the proposed use of the brownfield site.
  • The need of the loan to the viability of the remediation project and the redevelopment project.
  • The public health and environmental benefits of the project in addition to the remediation of the brownfield site.
  • Length of time the brownfield site has been abandoned or underutilized.

The application fee is $2,500. Additional details regarding the application are available at https://www.njeda.com/bfloans.

Brownfield Tax Incentives Coming Soon

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.

Next Steps for Loan Program

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.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Supreme Court and Title VII: Implications for Reverse Discrimination post image

Supreme Court and Title VII: Implications for Reverse Discrimination

Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]

Author: Matthew F. Mimnaugh

Link to post with title - "Supreme Court and Title VII: Implications for Reverse Discrimination"
SPACs Are Back, What You Need to Know post image

SPACs Are Back, What You Need to Know

Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]

Author: Dan Brecher

Link to post with title - "SPACs Are Back, What You Need to Know"
Short Form Merger: Streamlining the Process for Businesses post image

Short Form Merger: Streamlining the Process for Businesses

Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]

Author: Dan Brecher

Link to post with title - "Short Form Merger: Streamlining the Process for Businesses"
Tariff Response Options for Small Businesses Facing Financial Distress post image

Tariff Response Options for Small Businesses Facing Financial Distress

The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]

Author: Brian D. Spector

Link to post with title - "Tariff Response Options for Small Businesses Facing Financial Distress"
Common Causes of Partnership Disputes and How to Resolve Them post image

Common Causes of Partnership Disputes and How to Resolve Them

Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]

Author: Christopher D. Warren

Link to post with title - "Common Causes of Partnership Disputes and How to Resolve Them"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!