Technology

New Jersey Incentive Update - March 2019

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This morning, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting. 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 $24,000,000 in tax credits (over 10 years). The Board will also consider an application under the Economic Redevelopment and Growth (ERG) Grant Program.

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, over 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) 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 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: New Rules Under the Grow NJ Program Encourage Collaborative Research Relationships Between Industry and Academia

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The New Jersey Economic Development Authority (“NJEDA”) has established new standards under the Grow New Jersey Assistance Program (“Grow NJ”) for businesses seeking to enter into collaborative relationships with colleges and universities in the State of New Jersey.

The new rules were drafted pursuant to a recently passed amendment to the Grow NJ program (ACS for A-4432/SCS for S-2841), with the hopes of encouraging businesses to enter into such collaborative research relationships.

Under the new rules, businesses may qualify for a base tax credit amount of $5,000 per job, per year, if the business locates a qualified business facility (“QBF”) in a Garden State Create Zone, and the facility is used by the business in a targeted industry to conduct a collaborative research relationship with that university.

A Garden State Create Zone is defined as the campus of a doctoral university, and the area within a three-mile radius of the outermost boundary of the campus of a doctoral university. The State currently has 8 doctoral universities, including Montclair State University, NJIT, Princeton University, Rowan University, Rutgers University-New Brunswick, Rutgers University-Newark, Seton Hall University, and Stevens Institute of Technology.

In addition, the new rules establish a bonus of $1,000 per job, per year, if a business (1) is in a targeted industry and locates in a QBF on, or within three miles of, the campus of a college or university other than a doctoral university, and (2) the facility is used by the business to conduct a collaborative research relationship with the college or university. The State currently has 40 non-doctoral colleges and universities (including community colleges) that qualify under this bonus category.

The NJEDA will evaluate prospective research partnerships based on the ability to meet one of four categories:

  • Direct university collaboration or joint initiative or participation wherein the college or university partners with the business, and may include other business in a similar field of science, to advance an area of science;

  • Sponsored research wherein the eligible business directly funds a college or university and pays for research to solve a specific problem;

  • Grants or fellowships wherein funding is provided directly by a business to a professor or graduate student to advance a specific area of science;

  • Corporate sponsored awards for entrepreneurship wherein a business sponsors an award to be given to a student-developed technology startup or innovation

Created under the Economic Opportunity Act of 2013, Grow NJ is the State’s main job creation and business retention incentive program. The purpose of the program is to encourage economic development and job creation and to preserve jobs that currently exist in New Jersey but which are in danger of being relocated outside of the State.

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 232 projects have received awards, totaling over $4.4 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 232 projects will drive over $3.9 billion in private capital investment, create over 28,000 new jobs, and retain over 30,000 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) 723-7036 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.

Incentive Alert: Amendments to the Grow NJ Program Advance

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On Tuesday, multiple bills to amend the Grow New Jersey Assistance Program (Grow NJ) received favorable committee votes in Trenton. The Assembly Commerce and Economic Development Committee voted 9-0 to amend provisions related to the classification of Garden State Growth Zones (GSGZ) under the program. The committee also approved a bill which would require the New Jersey Economic Development Authority (NJEDA) to establish an “innovation zone” program, and modify the Grow NJ program to provide bonuses and other enhanced incentives to high-technology businesses located in an innovation zone.

Under A-4510, the Grow NJ program would be amended to add a sixth GSGZ, which will include the Atlantic City International Airport and the Federal Aviation Administration William J. Hughes Technical Center, and the area within a one-mile radius of the outermost boundary of that airport and technical center.

Currently, there are five GSGZs, including Atlantic City, Camden, Passaic, Paterson, and Trenton. Businesses relocating to or remaining in a GSGZ receive enhanced incentives, including a base tax credit of $5,000 per job, per year, for up to 10 years.

In addition to creating an additional GSGZ, the amendment also allows projects located in the six GSGZs to take advantage of provisions only available for projects located in Camden, including an alternative grant calculation to determine the total incentive amount available. This provision has driven many of the program’s largest projects (and awards) to Camden. As amended, all six GSGZs would be entitled to the same benefits.

The Assembly Commerce and Economic Development Committee also voted 7-0 to approve A-3747, which would require the NJEDA to establish an "innovation zone" program, which would consist of three innovation zones, each surrounding a research university or college or research hospital, and located in Greater Camden, Greater New Brunswick, and Greater Newark. The bill would require the NJEDA, with the approval of the State Treasurer, to modify its existing business assistance programs to give bonuses or other enhanced incentives to high-technology businesses located in an innovation zone.

Created under the Economic Opportunity Act of 2013, Grow NJ is the State’s main job creation and retention incentive program. Under the 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, 232 projects have received awards, totaling over $4.4 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 232 projects will drive over $3.9 billion in private capital investment, create over 28,000 new jobs, and retain over 30,000 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) 723-7036 or info@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in commercial 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.

New Jersey Incentive Update - October 2017

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On Thursday, October 12, 2017, the New Jersey Economic Development Authority (NJEDA) held its monthly board meeting in Trenton. Among the actions taken, the Board considered applications under the Grow New Jersey Assistance Program (Grow NJ). The Board also considered the issuance of bonds, loans, and guarantees for multiple applicants.

Grow New Jersey Assistance Program

The Board approved four applications under the Grow NJ program, totaling $49,000,000 in tax credits. Once certified, the four projects will create or retain full-time jobs in Paterson, Jersey City, Edison, and Englewood Cliffs.

Created under the Economic Opportunity Act of 2013, Grow NJ is the State’s main job creation and business retention incentive program. The purpose of the program is to “encourage economic development and job creation and to preserve jobs that currently exist in New Jersey but which are in danger of being relocated outside of the State.” N.J.S.A. 34:1B-244(a).

Determination of the size of an award is based on the project’s location, the corresponding capital investment, and the jobs created or retained at a qualified business facility. Applicants must demonstrate that the project will yield a net positive benefit to the State and must indicate that the award of tax credits under the program is a material factor in the business decision to make a capital investment and locate in the State. N.J.S.A. 34:1B-244(b)(3).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 232 projects have received awards, totaling over $4.4 billion in tax credits. Once certified, the 232 projects will drive over $3.9 billion in private capital investment, create over 28,000 new jobs, and retain over 30,000 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: NJEDA Now Accepting Applications for Technology Business Tax Credit Transfer (NOL) Program (2017)

On Monday, the New Jersey Economic Development Authority (NJEDA) announced that it will begin accepting applications for the 2017 Technology Business Tax Credit Transfer (NOL) Program.

Established under the New Jersey Emerging Technology and Biotechnology Financial Assistance Act (N.J.S.A. 34:1B-7.37), the Program allows unprofitable New Jersey-based technology and biotechnology companies with fewer than 225 U.S. employees to sell a percentage of unused New Jersey net operating losses and research and development tax credits to unrelated profitable corporations. N.J.A.C. 19:31-12.1-12.8.

The Program is authorized to provide $60,000,000 of tax benefits over each State fiscal year, of which $10,000,000 is set aside for businesses located in Innovation Zones (Newark, Camden, and the Greater New Brunswick Area).  N.J.A.C. 19:31-12.7(a).

Companies interested in apply for the Program must submit an application by June 30, 2017.

MURPHY PARTNERS LLP

If interested in learning more about this or other economic development incentive programs, please do not hesitate to reach out to us by telephone at (973) 877-6984 or by email at info@murphyllp.com. In the meantime, please take some time to explore the website. We look forward to hearing from you soon.

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