The New Jersey Economic Development Authority (NJEDA) is now accepting applications for commercial projects under the Economic Redevelopment and Growth (ERG) Program. A link to the application and more information is available at https://www.njeda.com/erg.
The ERG program, which was originally created to address project financing gaps in development projects, previously stopped accepting new applications in June 2019 because its enabling legislation ended. The commercial component of the program reopened for applications this morning with an allocation of $75 million under the Economic Recovery Act of 2020 (ERA). The residential component began accepting applications in June with a $125 million allocation.
The Commercial ERG Program is an incentive to help developers and businesses address project financing gaps in development or redevelopment projects, including below market development margins or rates of return. Qualified projects can receive an incentive grant reimbursement of up to 30 percent of total eligible project costs. Projects in Atlantic City, Camden, Paterson, Passaic, and Trenton can receive reimbursements up to 40 percent of eligible project costs. Subsidies awarded through the ERG Program are not meant to be a substitute for conventional debt and equity financing. Before applying, applicants must have the balance of their funding identified or in place or be able to demonstrate that any terms of other financing are reasonable.
The new phase of the Commercial ERG Program is subject to the existing ERG regulations and statutes, as amended by the New Jersey Economic Recovery Act of 2020 (ERA) (L. 2021, c. 156) and subsequently by L. 2021, c. 160. Among other requirements, projects must:
- Be predominantly commercial and contain 100,000 or more square feet of retail, office, and/or industrial uses for purchase or lease.
- Be located in a qualifying incentive area.
- Not have commenced any construction at the site of a proposed redevelopment project prior to submitting an application or demonstrate to the NJEDA that the project would not be completed otherwise or is to be undertaken in phases.
- Demonstrate that a project financing gap exists.
- Demonstrate the tax revenues the State will realize from the project will be greater than the incentive being provided.
For comprehensive information on eligibility for the extended Commercial ERG Program download the 2021 Commercial Extension Clarification Document at https://www.njeda.com/erg.
All applicants are required to submit an application via the NJEDA’s online application at https://application.njeda.com/. Applications will be accepted on a first-come, first-served basis until funds are exhausted or Thursday, December 30, 2021. More information about the application process is available at https://www.njeda.com/erg.
In addition to the expanded ERG Program, the ERA creates and expands a suite of programs that includes tax credits to incentivize job creation, new construction, and revitalization of brownfields and historic properties; financial resources for small businesses; support for new supermarkets and healthy food retailers in food desert communities; new funding opportunities for early-stage companies in New Jersey; and support for the growing film and digital media industry. The NJEDA will continue to engage the public as new programs and rules are developed. For more information, visit https://www.njeda.com/economicrecoveryact/.
Article Courtesy of the NJEDA