Brad A. Molotsky – Project Development/Infrastructure/P3

February 16, 2026February 16, 2026 by Brad A. Molotsky

Data Centers – NJ Bill A-7961R Directed at Large Electricity Consumers

The New Jersey Assembly has joined a growing list of legislative bodies nationally that are taking a look at and working on legislation to attempt to make larger users, including data centers, responsible for some of the cost of continued increasing rates that are currently being borne by residential customers. In other words, various legislative bodies, including New Jersey, are drafting and reviewing bills, like A-7961R (the “Bill”), that seek to create a separate tariff that will apply to large energy consumers separate from the rate that will apply to a typical residential consumer. The stated goal of the legislation is to seek to hold large energy consumers responsible for the increased cost of electricity that is attributable to their desired need and use of electricity.

Under A-7961R, a “large load customer” is defined to mean a commercial customer for retail electric service that is a centralized facility or facilities with a monthly demand of more than 100 megawatts (MW). The target of the legislation is, of course, among other things, planned new data centers with more than the 100 MW of monthly demand.

The Bill requires that within 180 days after the effective date, that each electric public utility would be required to file an application with the Board of Public Utilities to establish a tariff for the provision of electricity to large load customers. The Bill goes on to state that the tariff should be designed to:

(1) ensure that other electric public utility customers do not subsidize large load customers and all costs attributable to the electric public utility’s large load customers are assigned to the large load customers as determined by the PUC;

(2) contain protections necessary to ensure that other electric public utility customers are not placed at risk for paying stranded costs associated with the electric public utility serving the large load customer; and

(3) incentivize large load customers to develop and utilize methods to increase energy efficiency, including through the use of technologies that capture and utilize the heat produced by the large load customer.

The Bill would also require that within one year after the effective date, applicable electric public utilities would apply the tariff developed under the Bill as approved by the PUC, to each large load customer within the electric public utility’s service area.

The current draft of the Bill also seeks to require that any large load customer be required to provide financial guarantees of their ability to pay at least 85% of the service requested for a period of no less than 10 years. This provision is intended to make sure that the capacity being requested from the PUC is actually used by the large load customer and that the PUC is not left with a stranded cost for creating the capacity which is not used.

Bits and Bytes – While the Bill is in its early stages (currently being worked on in the Assembly Telecommunications and Uility Committee) and has not received a formal vote in the Assembly or the Senate, it is expected that some form of the Bill will indeed make it out of both bodies of the Legislature and be sent on the Governor. Gov for signature. Governor Sherrill ran on, among other things, reducing electricity rates to the residential consumer base so it is highly likely that the Governor will be supportive of this type of targeted rate-based allocation to attempt to have the user who needs the capacity pay for the costs to add the capacity to the system.

This type of specific targeting of large industrial users of electricity is not a new thing, rather, it has been building over the last two plus years as various states have seen electricity rates rise over 21% since 2023 depending upon what market they are in. These states are looking for ways to appropriately and fairly allocate costs while not killing the golden goose that is data center development given the ratables the sites will create and the construction jobs that tend to be a part of this every growing sector. We will continue to keep an eye on A 7961R iun NJ and on SB 253 in VA and other state proposals that are targeting data centers and will attempt to keep you, our readers, up to warp speed.

Duane Morris has an active team of lawyers who have been engaged in the review and dissemination of data center, digital infrastructure, real estate and incentives related alerts, blogs and advice on various topics. Please see our website for a list of all available articles and blogs.

If you have any questions or thoughts, please contact Brad A. Molotsky, Robert Montejo, Darrick Mix, Veronica Law, Ben Warden, Paul Josephson or any of the Duane Morris lawyers you regularly engage with.

February 11, 2026February 11, 2026 by Brad A. Molotsky

Data Centers – Virginia Bill SB 253 Directed at Large Electricity Users

Earlier this week, the Virginia Senate proposed SB 253 – “The Fair and Affordable Electric Rates Reliability Act”. This Bill joins other states that are looking for solutions to ever increasing electric bills and who are targeting data centers as the perceived party that is causing the rate increases.

It is a bit too early to tell if the SB 253 makes its way through the legislature, but it is indicative of approaches being considered and acted upon by various states. SB 253 which is supported by Dominion Energy (a large power generator in Virginia and beyond), would shift the way certain large consumers pay for electricity. Dominion Energy is a power supplier and creates its own energy at the power plants it owns and controls but then goes to the open market to buy electricity from the grid at auction for any excess capacity it needs and then allocates these excess costs to its customers who use the electricity.

Under the Bill proposed by Senator Louise Lucas, average residential electricity bills would decline 3.25% on average and between 2.9% and 3.7% on average for commercial customers. This reduction would be paid for by increasing the rates paid by data centers and other large consumers of electricity by approximately 15% according to the Senator’s white paper on the Bill.

In short, the Bill would require that data centers and other big users of electricity cover the cost incurred to construct power stations, substations and high voltage lines to serve the data centers (even if these costs are for off-site improvements). These rate charges would become effective January 1, 2027, and would apply to any customers with demand requirements of 25 megawatts (MW) or more or with annual electric load factors of 75% or more. As data center users tend to be in the over 25 MW to 1,000 MW (or 1 gigawatt) user category, the bill is targeting these entities to pay for the required infrastructure needs they are creating via their demand profile.

Interestingly, “any customer of a Phase II Utility” is defined under SB 253 as an entity that has 200 or more full time employees as of January 1, 2026,that has the demand attributes mentioned above. It will be curious to see what entities in the manufacturing and industrial arenas actually have over 200 employees required to trigger the applicability of SB 253.

The Quantitative/Qualitative Corner: This type of specific targeting of large industrial users of electricity is not a new thing, rather, it has been building over the last two plus years as various states have seen electricity rates rise over 21% since 2023 depending upon what market they are in. These states are looking for ways to appropriately and fairly allocate costs while not killing the golden goose that is data center development given the ratables the sites will create and the construction jobs that tend to be a part of this every growing sector. We will continue to keep an eye on SB 253 and other state proposals that are targeting data centers and will attempt to keep you, our readers, up to speed.

January 9, 2026January 10, 2026 by Brad A. Molotsky

Data Bytes – Deals and Happenings in the Data Center Marketplace

As part of our ongoing effort to focus on issues, incentives, acquisitions, joint ventures and the general comings and goings on in the data center arena, we thought it might be helpful to our readers to summarize some of the incredible deals that are occurring in the general data center marketplace.

While far from novel as we are aggregating stories of interest, given the speed and volume of deals, we hope that our quick overview of transactions might be helpful to those interested in learning more about the data center marketplace. If any of the stories pique your curiosity, feel free to email us and we will be happy to share information on the applicable article so you can dive deeper.

In no particular order, we saw the following:

Georgia – saw a $3.7 Billion-dollar data center proposed in Spalding County, Georgia;
Texas – saw a $1.5 Billion-dollar data center proposed in San Morcos, Texas;
Mississippi – saw Elon Musk’s XAI to invest over $20 Billion-dollars in a Southaven, Mississippi data center project;
Illinois – saw Hut 8 move to obtain zoning approvals on a $5 Billion-dollar data center in Logan, Illinois;
Europe – GTR obtained $2 Billion-dollars from KKR and Oak Hill Capital to expand their data center presence in Europe;
Capacity – estimates were issued showing data center capacity growing to over 200 Giga Watts by 2030, a massive increase;
Ohio – saw a $1 Billion-dollar, 500,000 SF data center being proposed in Scioto County, Ohio;
Pennsylvania – saw a $15 Billion-dollar, 16 building, 700-acre complex proposed in Carlisle, Pennsylvania;
Michigan – saw a $1 Billion-dollar data center proposed by Microsoft in Lowell Township, MI;
Google’s parent company, Alphabet, announced plans to acquire Intersect, a data center and energy infrastructure solutions company;
Capacity – data centers represented 40% of the PJM power capacity costs at the last PJM auction;
Washington, DC – Bisnow is hosting their National Datacenter – Construction Design, and Development conference in Washington, DC on February 18, 2026 – 7:30 EST; and
Iowa – Meta announced a purchase of a 328- acre site in Davenport, Iowa that is likely to be the home of a large data center.

The Quantitative/Qualitative Corner: This, friends, is like one week’s worth of deals – yes, a fast moving, large dollars being discussed and spent type of hyper frenzied marketplace. Our goal here is to continue to share deals in the space and where they are happening and we will share structure, power supply and financing strategies as the year progresses for those interested.

June 3, 2025June 3, 2025 by Brad A. Molotsky

Adaptive Reuse – a passing Fad or a Newly Emerging Asset Class to be Reckoned with?

Earlier this morning (June 3, 2025), I had the pleasure to moderate a panel at a Philadelphia Adaptive Reuse convening hosted by Bisnow. My panel consisted of local/regional experts and was comprised of German Yakubow, President of Haverford Square Properties, Phil Balderson, CEO of Odin Properties Jason Scholl, President of LK Miller and Christopher Horch, Associate Partner JB&B.

The discussion initially focused on the various demand drivers for adaptive reuse in Philadelphia, including:

Large stock of older buildings;
Return to work mandates at many businesses including the City itself;
Availability of easier to adapt medical and industrial buildings;
Tenant preferences for character and a sense of history; and
Philadelphia’s 10-year, 100% real estate tax abatement fully applying to adaptive reuse

We also chatted about whether Philadelphia was in a unique position to capitalize on this type of adaptive reuse work with the panelists concluding that while Philadelphia was, in fact, NOT unique as compared to Boston, NYC, Baltimore or DC, the one thing Philadelphia does have at the moment that the other cities do not have is an ease of permitting and development approvals for older buildings and a lower cost of acquisition than the other cities. Ease of permitting was a bit surprising candidly to most in the audience as this is not often the case with the City, but the panel was unanimous in their praise of the City when it comes to adaptive reuse timing and approvals.

When asked to focus on the biggest surprises to avoid, our panelists were quick to remind the audience that despite what they may hear, it is very hard to reuse the systems infrastructure in older buildings and it is better to plan on a gut rehab of lighting, electrical and HVAC in your pro forma. Sage counsel. The MEP and GC on the panel further stated that it is better to roll with what the building has to offer and meet it there than fight what is there and force it to work. In short, make sure your pro forma and your budget assumptions and scope adequately address lighting, HVAC and electrical at a minimum.

When reviewing what types of buildings they like to hunt for, our developers indicated that a square building with good window lines and access to light is what tenants are looking for so they tend to stay away from deep buildings with big cores and prefer industrial or old schools that tend to provide better floor plates than older churches and office buildings (which are tricky when it comes to running plumbing).

As far as costs go, I was a bit surprised to hear from all of the panelists that they are not overly concerned about tariffs and have been “ignoring the noise” that is coming out of DC regarding the on again/off again tariffs. They acknowledged that construction costs have gradually increased since Covid, but they have not sky rocketed. Their bigger concern was on longer lead time items on certain hard costs like cooling towers and switch gear that can still take up to 50 weeks to obtain and, in certain instances, getting the local utilities confirmation of specific times that lines would be run from the curb to the building, which can take multiple months rather than weeks.

All of our panelist were of the view that despite what might or might not come out of DC federally on energy efficiency and sustainability, that the customer is in fact interested in lower cost utilities and that owners are now focusing more and more on life cycle costing analysis of systems vs. using a simple payback period which fails to take into account future savings on energy consumption in an environment where utilities costs of energy are increasing 26% this coming summer.

Moreover, despite the de-emphasis federally on renewables and sustainability with the new Administration, all of our panelists agreed that their companies and their tenants all value efficiency and sustainable attributes of buildings, in particular when there is a return on investment for the installation – e.g., lighting, HVAC, building cladding that leads to less consumption of energy and therefore less cost to the tenant at the property.

Duane Morris has an active team of lawyers who have been engaged in the review and dissemination of real estate and incentives related alerts, blogs and advice on various 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, David Amerikaner or any of the Duane Morris lawyers you regularly engage with.

February 24, 2025February 24, 2025 by Brad A. Molotsky

New Jersey – What the Future Holds for Commercial Real Estate in Southern New Jersey

Last week I had the honor of moderating a super panel at the MidAtlantic Real Estate Journal and the Businesses Committed to Southern New Jersey Annual SNJ Commercial Real Estate Forecast in Mt. Laurel. The panel consisted of Joseph J. Aristone, EVP and Chief Revenue Officer of PREIT, David J. Fleming, Director of Engineering at Marathon, Dan McGovern, SVP at CBRE, Shimon Kanter, Principal at SMK Storage and Kirk Miller, Sr. Director at Cushman Wakefield.

The key takeaways from the wide-ranging conversation included:

Retail – there has been a flight to quality in the last 3 years; COVID sped up the disruption already occurring with at home purchasing habits but became a facilitator as well as it culled out some of the less well capitalized companies. Much of the strip retail continues to be held by private owners while the larger malls tend to be owned by the public companies. Rents in quality malls continue to be around $90-100 psf with rents in most Class A strip centers in SNJ being around $20 – $20 psf. Tenants are asking for better and more reserved parking closer to stores as amenities.
Office – despite what you hear on the news and in the papers, office is far from dead; there has been a flight to well capitalized owners and the last 2-3 years have represented a super time to buy assets if you have some stones and equity capital. Office in SNJ which was dominated by the REITs during the early 2000s, is now predominantly owned by private owners. Rental rates for A product range from $21 psf to $25 plus electric in particular markets and have not moved much in the last 15-20 years, creating a squeeze on returns as costs to operate continue to increase. Vacancy has continued to reduce from 23% to approximately 15% in early 2025, a good sign. Tenant Improvement dollars continue around $25 psf for a 5-year deal and $40-50 for a ten-year deal with good credit. Tenants are asking for fitness centers, return of lobby cafes, walking trails and good property managers.
Self-Storage – COVID created a bump in a marketplace already doing fabulously well and drove occupancy to the mid 90% with rents in the $1.50 psf range – unheard of previously. Currently there is a bit of backlash in suburban communities at the moment with occupancy trending down into the 80s and rents around $1.05 psf. Many projects have been done in SNJ by private owners while the REITs continue to make inroads in NJ. 1,200 buildings in NJ were built in 2023, a record for this product type; Expected deliveries in 2025 are down to a more manageable 300 buildings while suburban towns begin to push back on more deliveries. Tenants are looking for excellent lighting and safety.
Industrial – it has been on an amazing 20+ year ride; however, the marketplace has been very volatile over the last 3 years; COVID created an occupancy bump and an increase in pricing for owners; this marketplace has moderated a bit in the last year plus with occupancy down a few hundred basis points but still in the low 90s. Most of SNJ product is now institutionally held by public companies and institutional owners. 2025 looks like a year to be a tenant with tenant improvement allowances of approximately $8 psf depending on credit but this is likely to be short lived as interest rates decline. Tenants continue to look for the 3 P’s – power, PILOTs (i.e., reduced taxes) and Public Utility availability.
Construction – again, despite what you have been reading, there has been a lot of construction over the last 3-4 years with many having plans finalized and permits finalized to take advantage of hoped for reduction in interest rates later this year.
Data Centers – continued growth in Southern NJ but access to redundant sources of power are slowing growth in this sector in NJ.

On the sustainability front, despite what the de-emphasis federally with the new Administration, all of our panelists agreed that their companies and their tenants all value efficiency and sustainable attributes of buildings, in particular when there is a return on investment for the installation – e.g., lighting, HVAC, building cladding that leads to less consumption of energy and therefore less cost to the tenant at the property.

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

November 8, 2021 by Brad A. Molotsky

P-3: Infrastructure Bill Passes House – $1.2 Trillion in Hard Infrastructure

As of November 6, 2021, the House of Representatives passed what has been referred to as the $1.2 Trillion Dollar “hard” infrastructure bill by a vote of 228-206. President Biden has advised that he very much looks forward to signing the bill. The Congressional Budget Office continues its work to score the separate social policy “Reconciliation Bill” that is priced at approximately $1.75 Trillion.

The Hard Infrastructure bill includes $550 Billion in new spending focusing on the areas of:

> $110 billion toward roads, bridges and other infrastructure upgrades across the country;

> $40 billion is new funding for bridge repair, replacement, and rehabilitation and $17.5 billion is for major projects;

> $73 billion for the country’s electric grid and power structures;

> $66 billion for rail services;

> $65 billion for broadband;

> $55 billion for water infrastructure;

> $21 billion in environmental remediation;

> $47 billion for flooding and coastal resiliency as well as “climate resiliency,” including protections against wild fires;

> $39 billion to modernize transit, which is the largest federal investment in public transit in history;

> $25 billion for airports;

> $17 billion in port infrastructure;

> $11 billion in transportation safety programs;

> $7.5 billion for electric vehicles and EV charging;

> $2.5 billion in zero-emission buses;

> $2.5 billion in low-emission buses; and

> $2.5 billion for ferries.

We will continue to focus on the specifics of the various spending packages and will look to report back as details become more visible. Additionally, the CBO is expected to complete its work this week (by November 12, 2021) on the Reconciliation Bill to enable the bill to likely be voted on next week when Congress is back in session.

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, Joel Ephross, Phyllis Kessler, Mike Barz, Nat Abramowitz or any of the Duane Morris lawyers you regularly engage with.

Be well and stay safe.

August 17, 2021 by Brad A. Molotsky

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.

Be well and stay safe.

June 5, 2021 by Brad A. Molotsky

COVID-19: NJ ends Public Health Emergency Declaration

On Friday, June 4, Governor Murphy signed legislation that effectively ends the New Jersey COVID-19 Public Health Emergency Order that has been in place since March 9, 2020.

While some have commented that the bills were rushed through the State legislature, the Bill, A-5820/S-3866, was passed and signed by the governor yesterday.

As passed, the Bill allows for the continuation of 14 executive orders, including Executive Order No. 229, which extended a moratorium preventing New Jersey residents from having their utilities disconnected through June 30, 2021.

According to the Chamber of Commerce, the Administration is authorized to issue orders, directives, and waivers under the authority in the Emergency Health Powers Act that are specifically related to:

• personnel allocation and health resource allocation efforts;
• testing;
• vaccinations;
• health department coordination;
• data retention, sharing, collection and access; and
• implementation of CDC recommendations to prevent the transmission of COVID-19.

In these instances, the Governor has retained authority until January 11, 2022, which authority can be extended for 90 days with the passage of a concurrent resolution by the Legislature.

As of July 4, 2021, the Bill and the follow on companion bill effectively puts an end the Public Health Emergency declaration in New Jersey.

Duane Morris has an active team of lawyers who have been engaged in the review and dissemination of COVID related alerts, blogs and advice on various COVID 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, Sharon Caffrey, Elizabeth Mincer, Eve Klein, Kathy O’Malley or any of the Duane Morris lawyers you regularly engage with.

Be well and stay safe.

March 30, 2021 by Brad A. Molotsky

COVID-19: As of 4-2-21, NJ Expands Outdoor Gathering Numbers and Indoor Seating Capacity for Large Venues

Earlier today on 3-30-21, NJ Governor Phil Murphy signed Executive Order No. 234, which will increase outdoor gathering limits and increase capacity for seated events at large venues. The Order also clarifies indoor capacity limits for banquet halls and similar venues.

Executive Order No. 234 enables the following changes on Friday, April 2, at 6:00 a.m.:

Outdoor Gatherings:

The general outdoor gathering limit will increase from 50 people to 200 people.

Outdoor gatherings that are religious services or ceremonies, political events, weddings, funerals, or memorial services will continue to not have any limit.

College and youth sporting events will be permitted up to 200 spectators if the outdoor venue can accommodate appropriate social distancing.

Large Venues:

Venues, including sports and entertainment venues, with a seating capacity of 2,500 or more will be permitted to host events at 20% capacity indoors and 30% capacity outdoors. The capacity limits will continue to exclude participants, such as athletes and performers, and staff, such as coaches and ushers.

Facilities that host such events must ensure that all attendees at the event remain six feet apart from other attendees, except those individuals who purchase or reserve tickets together may be seated together. Attendees will also be required to wear masks within the facility, except when eating or drinking.

Catered Events:

The Order also clarifies that banquet halls and similar dining establishments and venues that use a licensed caterer can host indoor celebrations and other private catered events at 35% of the room’s capacity, up to 150 persons.

Indoor Gatherings:

The general indoor gathering limit will remain at 25 people.

Indoor gatherings that currently have a higher limit – religious services or ceremonies, political events, weddings, funerals, memorial services, or performances – will remain unchanged.

March 29, 2021 by Brad A. Molotsky

COVID-19: NJ Expands list of Eligible Vaccine Recipients

Late last week (on March 27, 2021), Governor Murphy announced the expansion of eligibility for vaccines to more frontline essential workers and high-risk groups in New Jersey’s COVID-19 vaccination program.

Eligible groups include individuals ages 55-64, individuals with intellectual and developmental disabilities, higher education educators and staff, and communications and utility infrastructure workers among others.

Beginning Monday, April 5, the following groups are eligible for vaccination:

Individuals ages 55-64;

Individuals ages 16 and up with intellectual and developmental disabilities;
Educators, including support staff, in higher education settings;

Communications infrastructure support, including engineers, and technicians, and members of the press;

Real estate, building, and home service workers, including construction workers, code officials, plumbers, electricians, HVAC technicians, property management, and maintenance workers;

Retail financial institution workers, including bank tellers, lending services, public accounting, and check-cashing workers;

Sanitation workers providing disinfection and janitorial services, city sanitation workers; residential, commercial, and industrial solid and hazardous waste removal workers;

Laundry service workers, including those working in laundromats, laundry services, and dry cleaners;

Utility workers including, electrical generation and supply system, natural gas delivery, nuclear power plant, water supply, telephone, cable/fiber/optical/broadband/cellular service workers; and,

Librarians and support staff at municipal, county, and state libraries.

For more information about eligibility, statewide vaccination site locations, and to preregister for a vaccination, visit https://covid19.nj.gov/vaccine.

If you have any questions or thoughts, please contact Brad A. Molotsky, Sharon Caffrey, Elizabeth Mincer, Eve Klein or any of the Duane Morris lawyers you regularly engage with.

Be well and stay safe.