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 firstname.lastname@example.org.
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.
As the smoke clears after a long battle, New Jersey will have a new governor on January 16, 2018. Yesterday, Phil Murphy defeated Lt. Governor Kim Guadagno in a race to succeed Governor Chris Christie as New Jersey’s 56th governor. Winning the race by 13 percentage points, Murphy will take office with large majorities in both the senate and the assembly. Having campaigned on a progressive platform, the new administration is likely to work quickly with members in the legislature to implement its agenda.
The next few months will be filled with the excitement of the transition: the Governor-elect putting together a transition team, selecting key positions within the front office, and working to identify individuals to fill the 15 cabinet-level or principal departments in the state’s executive branch.
Having spent years in Trenton as part of two executive branch agencies, I can tell you from firsthand experience that the importance of a proactive government affairs strategy is often overlooked. Too many times, I sat in meetings with organizations or businesses who were fighting from behind. Had they simply paid attention while the legislature passed a law, or an executive branch agency promulgated a rule, that materially impacted their business, they may have been able to influence the process. Whether because of a lack of knowledge, or a limited understanding of the process, they would find themselves in a compromised position.
While everyone likes certainty, smart organizations and businesses find opportunity in change. New leadership leads to new policy. Whether the issue is clean energy, the legalization of marijuana, or the raising of the state’s minimum wage, it is important to have a say in the conversation.
Chris J. Murphy is a partner in the governmental affairs group at Murphy Partners LLP, a boutique law firm located in Newark, New Jersey. He can be reached at (973) 723-7036 or email@example.com.