The New Jersey Economic Development Authority (NJEDA) announced that it will reopen applications for the residential component of the Economic Redevelopment and Growth (ERG) Program on June 1, 2021. The Authority first announced the extension of the program, enabled by $50 million in tax credits designated in the Economic Recovery Act of 2020 in March. The ERG program, which was originally created to address project financing gaps in development projects, had previously stopped accepting new applications in June 2019.
The Economic Recovery Act was signed by Governor Phil Murphy on January 7, 2021 to address the ongoing economic impacts of the COVID-19 pandemic and build a stronger, fairer New Jersey economy.
The new phase of the ERG program will be administered based on pre-existing ERG regulations and statutes, as amended by the Economic Recovery Act, which added new prevailing wage and minimum wage requirements. For additional information and detailed eligibility requirements, including a clarifying document outlining all requirements and application review protocols for interested parties, visit https://www.njeda.com/economicrecoveryact/. Specific questions can be directed to ergextension@njeda.com.
“The decision by Governor Murphy and the Legislature to include $50 million for residential ERG projects will enable us to move much-needed shovel-ready housing projects forward now, while the new programs created by the Economic Recovery Act are being developed,” said NJEDA CEO Tim Sullivan. “These projects will help to drive investment in the state while also creating good-paying construction job opportunities that will put people back to work and communities in New Jersey on a path to economic recovery.”
Under the Economic Recovery Act, residential ERG projects can receive tax credits of up to 30 percent of total eligible project costs. Projects in five cities — Atlantic City, Camden, Paterson, Passaic, and Trenton – can receive tax credits of up to 40 percent of eligible project costs. ERG tax credits are not meant to be a substitute for conventional debt and equity financing, and applicants should generally have their primary debt financing in place before applying.
For more information about the extension of the ERG program and other programs created by the Economic Recovery Act, please visit https://www.njeda.com/economicrecoveryact/.