The New Jersey Economic Development Authority (NJEDA) recently approved regulations for the Historic Property Reinvestment Program...
The New Jersey Economic Development Authority (NJEDA) recently approved regulations for the Historic Property Reinvestment Program. The program, which was established under the New Jersey Economic Recovery Act of 2020 (ERA), aims to incentivize the rehabilitation of designated historic structures or structures in designated historic districts.
“If you drive around Trenton, Camden, Paterson, Newark, Jersey City and a number of other places, you’ll always see great old buildings that — with a little bit of extra love and investment — could be converted into something special: housing, retail, mixed-use or even spaces for innovation,” said NJEDA Chief Executive Officer Tim Sullivan.
Eligibility for Historic Property Reinvestment Program
To receive tax credits through the Historic Property Reinvestment Program, a project must:
Demonstrate that without the tax credit award, the rehabilitation project is not economically feasible.
Prove that a project financing gap exists, and the tax credit award being considered for the project is equal to or less than the project financing gap.
Not have commenced any construction or rehabilitation activity at the site of the rehabilitation project prior to submitting an application and will not commence any construction or rehabilitation activity until the execution of the Rehabilitation Agreement (with certain limited exceptions).
Include business entity contributed equity of at least 20 percent of the total project costs; or 10 percent of the total project costs, if located in a government-restricted municipality.
Meet minimum cost requirements where the cost of rehabilitation for the selected rehabilitation period cannot be less than the greater of the adjusted basis of the structure or $5,000.
For a residential project, the structure must serve a residential rental purpose and also contain at least four dwelling units.
Be a rehabilitation project.
A “rehabilitation project” is defined as a specific construction project or improvement or phase of a project or improvement undertaken by a business entity that includes the rehabilitation of a qualified property, or transformative property. Meanwhile, a “qualified property” is a property located in the State of New Jersey that is an income-producing property, and that is individually listed, or located in a district listed on the National Register of Historic Places, the New Jersey Register of Historic Places, or the Pinelands Commission; or individually identified or registered, or located in a district identified or registered, for protection as a significant historic resource by a municipality in accordance with criteria for identification or registration that has been approved by the State as suitable for substantially achieving the purpose of preserving and rehabilitating buildings of historic significance within the jurisdiction of the municipality.
A “transformative project” is defined as a property located in the State of New Jersey that is an income-producing property, and that is:
An income-producing property, not including residential, whose rehabilitation the Authority determines will generate a substantial increase in State revenues through the creation of increased business activity within the surrounding areas
Individually listed on the New Jersey Register of Historic Places
Received a Determination of Eligibility from the Keeper of the National Register of Historic Places
Located within a one-half mile radius of the center point of a transit village, as designated by the NJDOT and within a city of the first class, OR located within certain municipalities
Available Tax Incentives Under Historic Property Reinvestment Program
Under the Historic Property Reinvestment Program, most eligible projects can receive tax credits worth up to 40 percent of eligible costs, with a maximum of $4 million for eligible properties. Projects located within a qualified incentive tract or in qualified municipalities can receive tax credits worth up to 45 percent of eligible project costs, with a maximum of $8 million for qualified properties.
Also, transformative projects can receive tax credits worth up to 45 percent of eligible project costs, with a maximum of $50 million. The HPRP is subject to an annual program cap of $50 million for a total of $300 million for a period of six years.
What’s Next?
Applications are currently under development, and the NJEDA plans to be ready to accept applications in March. If you have questions about how you may be able to benefit from the Historic Property Reinvestment Program or how to best pursue the redevelopment of historic properties in New Jersey, we encourage you to contact a member of Scarinci Hollenbeck’s Land Use Practice 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, William C. Sullivan, Jr., at 201-896-4100.
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
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!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
