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New Jersey Incentive Update - February 2019

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On Tuesday, February 12, 2019, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting in Trenton. Among the actions to be taken, the Board will consider three applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the three applicants could receive over $45,866,400 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

While the Grow NJ program has been wildly popular and incredibly successful, it has been the topic of significant debate, and will likely be modified upon its expiration in July of 2019. Governor Phil Murphy recently outlined his vision for new incentive programs, which would include the creation of the NJ Forward Tax Credit Program (which would take the place of Grow NJ as the State’s main job attraction incentive program) and the NJ Aspire Tax Credit Program (which would take the place of ERG as the State’s main incentive for developers). Below is a more detailed overview of the Governor’s plan.

The NJ Forward Tax Credit Program (NJ Forward) will likely take the place of Grow NJ as the State’s main job attraction incentive program. As proposed, NJ Forward will focus primarily on high-wage, high-growth sectors, including life sciences, information and high tech, clean energy, advanced manufacturing, advanced transportation and logistics, finance and insurance, and food and beverage. While the report does not outline specific programmatic details, it states that the proposed program will:

  • Increase focus on global/U.S. headquarters, R&D activities, and foreign direct investments

  • Prioritize new job creation rather than retained jobs

  • Encourage job creation in urban centers and other distressed communities, particularly those with public transit assets

  • Include an annual award cap and review to ensure fiscal sustainability and transparency

  • Feature lower base per-job credit amounts more in line with neighboring states, as well as more focused bonuses that ensure the administration’s policy goals

  • Limit transfers of credits to ensure that job-creating companies reap the primary benefits of taxpayer investment

  • Reward companies that invest in employee skill development and training

The NJ Aspire Tax Credit Program (NJ Aspire) will likely take the place of ERG as the State’s main incentive for developers. The administration is proposing the creation of 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. As proposed, the program will facilitate the conversion of surface parking lots, vacant and/or abandoned lots, and other underutilized properties into job and tax-generating development opportunities. The program will also assist in the development of market-rate housing in distressed communities and, where appropriate, mixed-income and affordable housing near transit in suburban communities. NJ Aspire will be structured as a competitive tax credit grant, giving the NJEDA discretion in awarding grants to the most impactful and development-ready project.

In addition to NJ Forward and NJ Aspire, the Governor has also called for the creation of a new remediation and development tax credit program and a dedicated NJEDA loan fund to support brownfield redevelopment, the creation of a state historic preservation tax credit program, and multiple programs aimed at encouraging venture capital investment in high-growth, high-wage sectors.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


Incentive Alert: NJEDA Releases Application for NJ Film Tax Credit Program

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On Monday, December 17, 2018, the New Jersey Economic Development Authority (NJEDA) released the much-awaited application for the NJ Film Tax Credit Program.

Created by legislation passed earlier this year, the Film & Digital Media Tax Credit Program will allow for taxpayers (in most cases, production companies) to seek a tax credit for qualified film production and digital media content production expenses. Applications will be approved by the New Jersey Economic Development Authority (NJEDA) and the Director of the Division of Taxation in the Department of the Treasury. Approved applicants are entitled to claim a credit against CBT or GIT liability in an amount equal to 30 percent (35 percent in limited cases) of the qualified film production expenses or 20 percent (25 percent in limited cases) of the qualified digital media content production expenses.

Importantly, the NJEDA only released the application for the film production component of the program. The digital media application is expected to be released in January 2019.

The full press release from the NJEDA can be found here: https://www.njeda.com/filmtaxcreditapplicationrelease

If interested in learning more this program or any other economic incentive program, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.   

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


Incentive Alert: Legislation Introduced to Amend and Extend the Grow NJ Program

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On November 26, 2018, Assemblywoman Eliana Pintor Marin introduced legislation to amend and extend the Grow New Jersey Assistance Program (“Grow NJ”). Among the changes to the current program, the bill provides certain reductions and expansions to the ability of a business to qualify for tax credits under the program, including new limits on the size of awards for new and retained jobs, and an extension of the deadline to apply for tax credits to July 2023 (the Grow NJ program is currently set to expire in July 2019).

Created under the Economic Opportunity Act of 2013, the Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 250 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 250 projects will drive over $4.5 billion in private capital investment, create over 32,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

The full text of the legislation can be found here: https://www.njleg.state.nj.us/2018/Bills/A5000/4730_I1.PDF

If interested in learning more about Grow NJ or any other economic incentive program, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.   

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


New Jersey Incentive Update - October 2018

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On Thursday, October 11, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting. Among the actions to be taken, the Board will consider two applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the two applicants could receive over $8,600,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 250 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 250 projects will drive over $4.5 billion in private capital investment, create over 32,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


Incentive Alert: Governor Murphy Proposes New Incentive Programs

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On Monday, Governor Murphy outlined his plan for revamping New Jersey’s main incentive programs, including the Grow New Jersey Assistance Program (Grow NJ) and the Economic Redevelopment and Growth (ERG) Program, which are set to expire in July of 2019. While the creation of any new program will require new legislation, this is the first step in a process that will likely result in new incentive programs for businesses and developers.

The NJ Forward Tax Credit Program (NJ Forward) will likely take the place of Grow NJ as the State’s main job attraction incentive program. As proposed, NJ Forward will focus primarily on high-wage, high-growth sectors, including life sciences, information and high tech, clean energy, advanced manufacturing, advanced transportation and logistics, finance and insurance, and food and beverage. While the report does not outline specific programmatic details, it states that the proposed program will:

  • Increase focus on global/U.S. headquarters, R&D activities, and foreign direct investments

  • Prioritize new job creation rather than retained jobs

  • Encourage job creation in urban centers and other distressed communities, particularly those with public transit assets

  • Include an annual award cap and review to ensure fiscal sustainability and transparency

  • Feature lower base per-job credit amounts more in line with neighboring states, as well as more focused bonuses that ensure the administration’s policy goals

  • Limit transfers of credits to ensure that job-creating companies reap the primary benefits of taxpayer investment

  • Reward companies that invest in employee skill development and training

The NJ Aspire Tax Credit Program (NJ Aspire) will likely take the place of ERG as the State’s main incentive for developers. The administration is proposing the creation of 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. As proposed, the program will facilitate the conversion of surface parking lots, vacant and/or abandoned lots, and other underutilized properties into job and tax-generating development opportunities. The program will also assist in the development of market-rate housing in distressed communities and, where appropriate, mixed-income and affordable housing near transit in suburban communities. NJ Aspire will be structured as a competitive tax credit grant, giving the NJEDA discretion in awarding grants to the most impactful and development-ready project.

In addition to NJ Forward and NJ Aspire, the report also calls for the creation of a new remediation and development tax credit program and a dedicated NJEDA loan fund to support brownfield redevelopment, the creation of a state historic preservation tax credit program, and multiple programs aimed at encouraging venture capital investment in high-growth, high-wage sectors.

If interested in learning more about these or other economic development incentive programs, please do not hesitate to contact Chris Murphy at Murphy Partners LLP at (973) 723-7036 or cmurphy@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


Incentive Alert: Governor Murphy Signs the ERG Bond Financing Act

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On August 17, 2018, Governor Phil Murphy signed into law the Economic Redevelopment and Growth Grant Bond Financing Act (P.L. 2018, c. 97), which creates a mechanism to finance projects under the Economic Redevelopment and Growth (ERG) Program.

Created under the Economic Opportunity Act of 2013, the ERG program is the State’s primary incentive for developers. Pursuant to the program rules, a developer that can demonstrate that its redevelopment project requires a subsidy to close a project financing gap may apply for a grant equaling no more than 20% of the total cost of a project (30% in a Garden State Growth Zone), of which the developer must make a 20% equity investment.

In accordance with a redevelopment incentive grant agreement, beginning upon the receipt of occupancy permits for any portion of the redevelopment project, the developer will receive incremental State revenues directly realized from businesses operating on or at the site of the redevelopment project. The developer may apply for an incentive grant in the amount up to 75% of the annual incremental tax revenues generated by the project over a 20 year period. If the redevelopment project is located within a Garden State Growth Zone, 85% of the projected annual incremental revenues may be pledged toward the award.

Prior to the enactment of the ERG Bond Financing Act, developers receiving awards under the ERG program were required to seek financing for up-front costs associated with the project, as the ERG payments were unavailable until the project had been fully completed and certified. The ERG Bond Financing Act creates a mechanism for developers to monetize an ERG award by allowing the municipality in which a project is located to (either directly or through an application to the New Jersey Economic Development Authority or similar public instrumentality of the State) issue bonds secured by a pledge of the ERG grant payments, and further secured by municipal liens and/or special assessments on the property benefiting from the improvements. This will allow developers to finance the up-front costs associated with construction, without having to seek gap financing.

If interested in learning more about state and local development incentives, please do not hesitate to contact Murphy Partners LLP at (973) 723-7036 or info@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

New Jersey Incentive Update - April 2018

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On Tuesday, April 10, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting in Trenton. Among the actions to be taken, the Board will consider seven applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the seven applicants could receive over $51,000,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 247 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 247 projects will drive over $4.5 billion in private capital investment, create over 30,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com. 

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

New Jersey Incentive Update - March 2018

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On Tuesday, March 13, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting in Trenton. Among the actions to be taken, the Board will consider four applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the four applicants could receive over $23,000,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 247 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 247 projects will drive over $4.5 billion in private capital investment, create over 30,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

Incentive Alert: Federal Tax Law Creates Incentives for Investment in “Opportunity Zones”

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While corporate and individual tax relief took center stage in the debate over the passage of the new federal tax reform legislation, a less-discussed section of the new law may have a significant impact in driving investment into distressed areas throughout the country.

The new law establishes the Opportunity Zone Program, which creates preferential tax treatment for unrealized capital gains that are reinvested in to-be-determine qualified opportunity zones. The new law instructs governors in each state (and the Mayor of Washington, D.C.) to identify eligible census tracts from a pool of low-income, high-poverty census tracts (each state is limited to selecting up to 25% of the state’s census tracts that meet the eligibility requirements).

Importantly, the new law will allow corporations and partnerships to establish Opportunity Funds, created for the purpose of investing in qualified opportunity zone property (which includes any opportunity zone business stock, any opportunity zone partnership interest, and any opportunity zone business property).

As recently outlined by the Economic Innovation Group (www.eig.org), investments made in a qualified Opportunity Fund will receive preferential tax treatment, including:

  1. A temporary deferral of inclusion in taxable income for capital gains reinvested in an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.

  2. A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.

  3. A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.

To take advantage of the special tax treatment created under this program, taxpayers must roll over non-opportunity zone gains before Dec. 31, 2026.

If interested in learning more about this or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

Alert: NJEDA to Appoint New CEO at Board Meeting on Tuesday

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By Chris J. Murphy of Murphy Partners LLP

On Tuesday, February 13, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting in Trenton. Among the actions to be taken, the Board will vote to approve the appointment of Tim Sullivan as Chief Executive Officer.

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Tim Sullivan will bring years of economic development experience to the role of CEO. Since 2014, he has served as deputy commissioner to the Connecticut Department of Economic and Community Development (DECD). Prior to his time spent in Connecticut, Sullivan served as chief of staff to the New York City deputy mayor for economic development from 2010-2013. His experience in both New York City and Connecticut should prove valuable in his new role, as he truly understands how difficult it is to compete for business and jobs in an ever-changing economy.  

As we all know, historically, New Jersey has not had a stellar reputation when it comes to business friendliness. Since 2015, the Tax Foundation, a Washington DC-based think tank, has ranked New Jersey as having the worst business climate in the country. Indeed, New Jersey is one of only six states in the country with a corporate tax rate of 9% or more.    

The Grow New Jersey Assistance Program (Grow NJ), however, has helped New Jersey attract and retain thousands of jobs and billions of dollars in investment, and remains an important tool in the state’s economic development toolbox.  

Created under the Economic Opportunity Act of 2013, the Grow NJ is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 250 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 250 projects will drive over $4.6 billion in private capital investment, create over 31,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

I have no doubt that the new CEO will do an incredible job. His experience throughout the region will prove immensely valuable. His understanding of the competitive nature of economic development will color his tenure at the NJEDA. Best of luck, Tim Sullivan. We are all pulling for you.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.