The “New Jersey Economic Opportunity Act of 2013” overhauled New Jersey’s economic development programs. The Act retooled and substantially enhanced the State’s job creation and retention program known as the Grow NJ Assistance Program (Grow NJ), as well as the Economic Redevelopment Growth (ERG) Grant Program, the incentive program that provides gap financing to developers. As we wrote in Commerce magazine, Grow NJ and ERG improve New Jersey’s economic competitiveness with our neighboring states and may be game-changers for businesses and developers. After seeing the programs in action for under a year, the Legislature has revisited the programs to make technical changes and to further enhance NJ’s economic development arsenal.
In June 2014, the State Legislature approved legislation (Senate Bill 1551/Assembly Bill 3213) with strong bipartisan support in both chambers to amend various portions of the Grow NJ and ERG programs. The bill is currently being considered by Governor Christie and must be acted on by September 8, 2014. The key provisions include:
- Making the transfer of tax credit more widely available by reducing the minimum amount of the credits that may be transferred from $100,000 to $25,000.
- Clarifying a provision of the Grow NJ program concerning the standard of service generally accepted by custom or practice as full-time employment in a supermarket, grocery, or other similar retail industry, in order to encourage food purveyors to locate within Camden and Atlantic City.
- Adding a new Grow NJ bonus credit of $1,000 for using a vacant space of 1,000,000 square feet of office or laboratory space available for occupancy for a period of over one year.
- Adding a new Grow NJ provision that deems a project a “mega project” if it is in a southern county that is also in an area in need of redevelopment and invests $20 million and creates or retains 150 jobs.
- Modifying the Grow NJ “net benefit test” to require a business to demonstrate that a capital investment would benefit both the State and the municipality in which the capital investment will be made;
- Encouraging nonprofit development corporations to undertake development projects in the four designated “Garden State Growth Zones.”
- Allowing the allocation of tax credits to the shareholders of New Jersey S corporations and New Jersey Qualified Subchapter S Subsidiaries that undertake projects in the Camden-Garden State Growth Zone.
- Creating an incentive for the donation of substantial public infrastructure as part of certain redevelopment projects
- Making technical changes and correcting the date from July 28, 2015 to July 28, 2018, by which the developer of a qualified residential project seeking an award of tax credits under the ERG program towards the funding of an incentive grant must submit a temporary certificate of occupancy for the project.