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.
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 email@example.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.