By Alex Narcise and Darin Valentine
Updated 7/30/2019. Residential and commercial developers are constantly in need of funding and many qualifying New Jersey developers have taken advantage of a program offered by the New Jersey Economic Development Authority (NJEDA). If you’re considering undertaking a redevelopment project in a qualifying economic and redevelopment, and grant incentive area in New Jersey, a program offered by the NJEDA could generate a significant amount of cash assistance if you meet their eligibility requirements. The grant, offered through the Economic Redevelopment and Growth (ERG) Program, can help close the gap in financing your project.
Here’s what you need to know about qualified redevelopment projects
Types of projects
Qualifying residential redevelopment projects must be predominately residential and include multifamily residential or dormitory units for purchase or lease. Commercial redevelopments must include retail, office and/or industrial uses for purchase or lease.
The minimum total project cost of eligible residential projects ranges from $5 million (when the site is a Garden State Growth Zone) to $17.5 million for a typical project.
Qualifying residential projects can receive a tax credit of up to 20 percent of the eligible project costs with a 10 percent bonus possible if the project reserves at least 10 percent of residential units for moderate-income housing. For commercial redevelopment projects, grants of up to 20 percent of the project’s total cost are possible, with additional grants possible based on other factors. For more information on qualifying locations and full eligibility details, visit this New Jersey EDA page.
Certification – where Wiss comes in
A report that presents all eligible project costs must be submitted to the NJEDA at or near project completion and requires certification from a CPA firm. And that certification can result in significant financial benefits. In recent projects where Wiss was engaged to certify eligible project costs, our testing resulted in:
- the certification of almost $90 million worth of costs, which will help our client obtain approval of approximately $32 million in tax credits and grants (including the ERG grant and a tax credit from another NJEDA program – the Urban Transit Hub Tax Credit).
- the certification of more than $30 million in costs, which will help our client obtain approval of an ERG grant of over $6 million.
Contact us for more information on this or for information about the New Jersey EDA’s Urban Transit Hub Tax Credit Program, which also provides an advantage for qualifying builders and developers in the state.