Key Takeaways from Gov. Murphy’s Economic Development Strategic Plan for NJ Developers
October 22, 2018
The Economic Development Strategic Plan, which Gov. Murphy Unveiled During an Economic Address, Includes a Range of Programs Aimed to Jumpstart the State’s Economy…
Big changes are on the horizon for New Jersey’s Brownfields Program under Gov. Phil Murphy’s new economic plan. The Economic Development Strategic Plan, which Gov. Murphy unveiled during an economic address, entitled “The State of Innovation: Building a Stronger and Fairer New Jersey,” includes a range of programs aimed to jumpstart the state’s economy.
Overall Economic Development Strategic Plan
The Murphy Administration’s vision to reestablish New Jersey as an economic and innovation leader focuses on four key priorities: investing in people; investing in communities; making New Jersey the State of Innovation; and making government work better to improve New Jersey’s competitiveness and business climate.
With respect to redevelopment, Gov. Murphy is proposing to revamp the Grow New Jersey (Grow NJ) and Economic Redevelopment and Growth (ERG) programs, which are scheduled to sunset on July 1, 2019. The administration also plans to overhaul the existing brownfields program and establish a new historic preservation tax credit program. Although not a state program, Gov. Murphy also plans to facilitate responsible investment in Opportunity Zones through a digital marketplace. Additionally, New Jersey’s transportation infrastructure remains a priority, including NJ TRANSIT and new major infrastructure investments such as the Gateway Program and Newark International Airport.
The Murphy Administration is proposing a brownfield remediation and redevelopment tax credit program, as well as a dedicated NJEDA loan fund to support brownfield redevelopment. As detailed in Gov. Murphy’s Economic Development Strategic Plan:
In re-imagining New Jersey’s brownfield program, we hope to ensure greater timeliness of remediation. Brownfield programs support remediation of hazardous waste, boost local property values, and increase local health. For every acre of previously developed property that we can put back to productive use, one fewer undeveloped acre (“greenfield”) must be developed to achieve our goals for job growth, minimizing our environmental footprint and reducing the development pressure that drives sprawl.
Historic Tax Preservation Credit
Gov. Murphy is also proposing a state historic preservation tax credit program to help revitalize historic buildings across the state. “Across the nation, in fiscal year 2016, federal historic preservation tax credits fueled the rehabilitation and re-envisioning of more than 1,000 historic buildings, generating over 100,000 jobs nationally and nearly $2 billion in new revenues – a $500 million return on investment,” Gov. Murphy said in his economic address. “Our state is rich with history, and we’re not going to knock it down, but rather use it to move forward.”
NJ Aspire Tax Credit
Gov. Murphy’s proposed economic plan includes a new place-based gap financing tool to help catalyze investments in commercial, residential, and mixed-use (including parking) projects, with a particular focus on cities, downtowns, and suburban neighborhoods served by mass transit. The goal of the new program, called NJ Aspire, is to spur the conversion of surface parking lots, vacant and/or abandoned lots, and other underutilized properties into job and tax-generating development opportunities.
According to the Murphy Administration, NJ Aspire will assist in the development of market-rate housing in distressed communities and, where appropriate, mixed-income and affordable housing near transit in suburban communities. It will also facilitate investments in tourism, arts, and culture-related projects.
NJ Aspire will be structured as a competitive tax credit grant, which will enable the NJEDA to compare projects to identify the most impactful and development-ready projects. The program will feature a program cap and a per-project cap and will also generate funds to support public infrastructure investments.
Next Steps for NJ Developers
Many of the proposals still lack key details. Many also require legislative action to come to fruition. Nonetheless, New Jersey developers should have several new funding resources and available tax credits in the near term. To determine if your business may benefit from the Governor’s economic proposals, we encourage you to contact a member of the Scarinci Hollenbeck Land Use Group.
If you have any questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.