
On January 23, 2025, Governor Phil Murphy signed recently passed legislation (S1323/A2076) that significantly changes the Aspire Tax Credit Program. Aspire is the state’s main developer-focused incentive program, designed to spur residential and commercial development through the provision of tax credits. The amendments make meaningful changes to the Aspire program, altering which projects qualify, the size of the potential tax credit and several key aspects that have major financial implications.
On the same day, the New Jersey Economic Development Authority (NJEDA) held a Special Telephonic Board Meeting, during which they approved the first Aspire project in Jersey City. The Board granted an award of $64,226,368 to support a six-story, 210-unit housing project, with 35% of the units designated as affordable housing. This development is part of the larger Bayfront project in Jersey City's West Side.
During this Special Meeting, the NJEDA also approved a new incentive program that seeks to enhance cultural arts activities across the state. The Cultural Arts Facilities Expansion (CAFE) program. CAFE is a gap financing tax credit program providing awards of up to 100% of eligible capital and operating costs (not to exceed $75M) for projects with a minimum project size of $5M. Qualifying institutions must be engaged in cultural, educational, or artistic enrichment in the state.
More information on the CAFE program to follow on the MSW Blog when the rules are made public.
Aspire
On December 19, 2024, the New Jersey State Senate and Assembly passed legislation (S1323/A2076), known as the “Aspire Amendment,” which Governor Phil Murphy signed into law on January 23, 2025. This legislation introduces significant changes to the Aspire Tax Credit Program, the state’s primary developer-focused incentive designed to promote residential and commercial development.
Major changes were made to the program, including:
- Expanded eligible areas
- New municipalities qualifying as GRMs
- Reduced thresholds for Transformative projects
- New Special Mission Non-profit Projects designation
We covered these changes in our article last month: Aspire Tax Credit Update – NJ Legislature Approves Amendments
To date, the NJEDA has awarded over $2,600,000,000 in tax credits to 25 development projects in municipalities across New Jersey, including Jersey City, Woodbridge, Morristown, Newark, Hoboken, Union City, Bayonne, Trenton, and Camden. The program has been used to finance several large-scale projects, including the following:
- 386-unit mixed-use project in Hoboken, NJ.
- 58-acre, 1,567,385 square feet film studio in Bayonne, NJ.
- 101-unit senior affordable housing development in Union City, NJ.
- $356,000,000 mixed-use development in Newark, NJ, including 350 residential units, a new 53,000 square foot arts-education and community facility, 12,600 square feet of commercial space, and improvements to a 100,000 square foot performing arts center.
The Aspire Tax Credit Program provides tax credits covering between 50-85% of eligible project costs (not to exceed between $60M-$120M) for qualifying projects in eligible locations. Aspire can be used for both residential and commercial developments, and for projects as small as 25,000 – 50,000 square feet for commercial and $5,000,000 – $17,500,000 for residential, depending on location.
Cultural Arts Facilities Expansion (CAFE) program
At a Special Meeting on January 23rd, 2025, the New Jersey Economic Development Authority (NJEDA) approved the new Cultural Arts Facilities Expansion (CAFE) program. This $1.2B gap financing program is designed to support cultural arts institutions constructing or rehabilitating theaters, museums, galleries, libraries and performing arts centers across New Jersey.
CAFE will award tax credits up to 100% of eligible capital and operating costs (not to exceed $75M) for projects with a minimum project size of $5M. Qualifying institutions must be engaged in cultural, educational, or artistic enrichment in the state. The EDA anticipates the first application window opening this spring. If you know of an institution that could benefit from this program, do not hesitate to reach out.
More information on the CAFE program to follow on the MSW Blog when the rules are made public.
For more information, please contact:
Brendan Pytka
Director of Tax Credits & Incentives
Phone: (862) 418-3702
Email: bpytka@murphyllp.com
Chris J. Murphy, Partner
Chair, Tax Credits & Incentives
Phone: (973) 705-7421
Email: cmurphy@murphyllp.com
Murphy Schiller & Wilkes LLP (MSW) is a boutique law firm servicing the commercial real estate and construction industries. Headquartered in Newark, New Jersey, the firm represents a wide range of clients, including institutional, publicly traded real estate companies, international and regional lenders, national contractors and subcontractors, and family offices. The firm has been ranked as a top law firm by both Chambers & Partners and U.S. News & World Report.