New Jersey Enacts Economic Opportunity Act of 2013

The New Jersey Economic Opportunity Act of 2013 (the “Act”) was signed into law on September 18, 2013. The Act is intended to promote job creation and the redevelopment of urban centers, suburban office parks and areas impacted by Hurricane Sandy by expanding state programs that offer tax incentives. The Act phases out three existing programs and expands two existing programs: the Grow New Jersey Assistance (“Grow NJ”) Program and the Economic Redevelopment and Growth (“ERG”) Program. The Grow NJ Program provides incentives and tax credits for businesses that invest and create jobs in New Jersey. Under the Act the Grow NJ Program provides bonus tax credits for mega projects and projects located in Urban Transit Hubs and the Garden State Growth Zone, and lowers minimum capital investments and job creation requirements for 8 counties including Camden and Atlantic counties. Under the Act the ERG Program, provides that a developer can apply for a state or local incentive agreement to receive back from the state or local authority up to an average of 75 percent of the annual incremental state or local revenues from the redevelopment project generated through various taxes or 85 percent of such revenues for projects in a Garden State Growth Zone with a grant equal to a maximum of 20% of project costs. The Act provides that the New Jersey Economic Development Authority may grant a bonus incentive of up to 10% of project costs for a maximum award of 30% of project costs if the project falls with in one of eleven categories which include: (a) a super market in a distressed community; (b) health care facility in a distressed community; or (c) residential project with a 10% set aside for moderate income housing. The ERG Program now also provides for $600 million of tax credits for developers of qualified residential projects. These two programs will be administered by the New Jersey Economic Development Authority.