NJ EDA now accepting Commercial Economic Redevelopment and Growth Grant applications – 30% of eligible project costs

As of August 16, 2021, the New Jersey Economic Development Authority (NJEDA) has commenced accepting applications for commercial projects under the Economic Redevelopment and Growth (ERG) Program. The Commercial ERG Program is an incentive that is designed to assist developers and businesses address project financing gaps in development or redevelopment projects, including below market development margins or rates of return.

A link to the application and more information is available at https://www.njeda.com/erg.

Qualified projects are eligible to receive an incentive grant reimbursement of up to 30% of total “eligible project costs”. Moreover, projects in Atlantic City, Camden, Paterson, Passaic, and Trenton are eligible to receive reimbursements up to 40% of eligible project costs. Subsidies awarded through the ERG Program are not meant to be a substitute for conventional debt and equity financing.

Prior to applying, prospective applicants are required to have the balance of their funding identified or in place or be able to demonstrate that any terms of other financing are reasonable.

Among other requirements, projects must:

• Be located in a qualifying incentive area.
• Demonstrate that a project financing gap exists.
• Be predominantly commercial and contain 100,000 or more square feet of retail, office, and/or industrial uses for purchase or lease.
• 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 the tax revenues the State will realize from the project will be greater than the incentive being provided.

Additional information on eligibility for the Commercial ERG Program can be found at 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.

Duane Morris has an active team of lawyers who have been engaged in the review and dissemination of P-3, public private partnerships and incentives  related alerts, blogs and advice on various P-3 and incentives related topics.  Please see our website for a few list of all available articles and blogs.  

If you have any questions or thoughts, please contact Brad A. Molotsky, Paul Josephson, Mike Barz, Nat Abramowitz or any of the Duane Morris lawyers you regularly engage with.

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