The New Jersey Economic Development Authority (NJEDA) today announced a $75 million extension of the commercial component of the Economic Redevelopment and Growth (ERG) Program. The Authority also announced that the extended Residential ERG Program, which began accepting applications in June, has been expanded from $50 million to $125 million. More information about the ERG Program is available at https://www.njeda.com/erg.
“Thanks to the foresight of Governor Phil Murphy and the Legislature in reopening the ERG Program, essential commercial and residential projects throughout New Jersey will be able to move forward while the new programs created by the Economic Recovery Act are under development,” said NJEDA Chief Executive Officer Tim Sullivan. “These programs will drive economic growth and attract new businesses and workers to New Jersey. This is always important, but it is especially crucial now as we begin recovering from the economic impacts of COVID-19.”
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.
Comprehensive information on eligibility for the extended Commercial ERG Program is available at https://www.njeda.com/erg.
The NJEDA will begin accepting applications for the extended Commercial ERG Program at 12:00 p.m. EDT on Monday, August 16, 2021. All applicants will be 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.
Potential applicants can submit questions about the Commercial ERG Program and application to ERGextension@njeda.com until 11:59 p.m. EDT on Sunday, August 8, 2021. Responses to these questions will be posted to a Frequently Asked Questions (FAQ) section on 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