Project Development/Infrastructure/P3

January 7, 2021 by Brad A. Molotsky

NJ – Governor Murphy signs $14B Incentive Program Bill – the NJ Economic Recovery Act of 2020

As of today, January 7, 2020, Governor Murphy has signed into law the NJ Economic Recovery Act of 2020 (the “NJERA”), a bill that creates a 7-year, $14 Billion Dollar package of tax incentives to attract and retain NJ based businesses and real estate development projects.

The 249-page NJEDA outlines new tax incentives to replace the expired NJ GROW and ERG programs and expands or creates new subsidies for film and television production, revitalizing brownfields and assisting so-called food deserts, among other areas, all while creating financial caps and oversight for the programs and the state agency that manages them.

Under the NJERA, most of the new tax credit programs are subject to a collective $11.5 Billion Dollar cap over 6 years, while allowing for a 7th year of allocations under those programs for uncommitted credits. The NJERA also provides for $2.6 Billion in tax credits over 13 years for projects related to film and television production.

A new office, the Office of Economic Development Inspector General will be created along with a chief compliance officer to manage a Division of Portfolio Management and Compliance to oversee the awards.

Under the new Emerge program, tax credits are available to encourage economic development, job creation and the retention of significant numbers of jobs in imminent danger of leaving the state.

Eligibility is subject to various provisions, including a requirement that the award of tax credits, the resulting capital investment and the resulting job creation or retention will yield a “net positive benefit” to NJ ranging from at least 200 to 400% of the award, depending on the location. Emerge also has minimum requirements and adjustments for the necessary capital investment based on the type of project, the size of the business, the types of jobs at stake and other factors.

Tax credits under both Emerge and a separate program, Aspire, are subject to a combined $1.1 Billion annual cap for 6 years. The NJERA also calls for the $1.1 Billion annual cap to be split so that up to $715 million of tax credits will be for projects located in 14 northern counties and $385 million for projects in 7 southern counties.

Aspire, the successor to the Economic Redevelopment & Growth program, or ERG, will provide gap financing to development projects that are intended to serve a public policy goal but which would otherwise generate a below-market rate of return. Additionally, the proposal outlines different provisions for commercial and residential projects, providing bonuses for those that serve distressed or targeted communities, along with transit-oriented development and affordable housing.

The NJERA would also allow the Economic Development Authority, which oversees tax incentives, to review each project’s performance and reduce the amount of the subsidy if it determines that the financing gap is smaller than determined at board approval. If there is no project financing gap, then the developer would forfeit the incentive award.

• Historic property reinvestment — providing tax credits for part of the cost of rehabilitating historic properties in the state, with a cap of $50 million annually for 6 years;

• Film tax credits — amending existing programs to include provisions for so-called New Jersey film partners and New Jersey film-lease partners and allowing an additional $200 million of tax credits annually over 13 years;

• Brownfields redevelopment — providing tax credits to compensate developers of redevelopment projects located on polluted sites for remediation costs, with a cap of $50 million annually for 6 years;

• Food desert relief — providing tax credits in order to incentivize businesses to establish and retain new supermarkets and grocery stores in underserved communities, with a cap of $40 million annually for 6 years;

• The New Jersey Innovation Evergreen program — auctioning tax credits for cash, which will be used to invest in startups and other innovation-focused businesses, with a cap of $60 million annually for 6 years;

• Community-anchored development — providing tax credits to anchor institutions to incentivize the expansion of targeted industries in and the continued development of certain areas of the state, with a cap of $200 million annually for 6 years; and

• Main Street recovery — providing grants, loans and loan guarantees to small businesses, with an appropriation of $50 million under the bill.

Duane Morris has an active team of lawyers who engage in the public-private partnership space where State based incentives are often critical to the success of a project. If you have any questions or thoughts, please contact Brad A. Molotsky, Mike Barz, Paul Josephson, Sheila Slocum Hollis, or any of the Duane Morris lawyers you regularly engage with.

Be well and stay safe.

December 16, 2020 by Brad A. Molotsky

NJ is Close on a New 6-Year, $11.5B Incentives Package designed to Attract and Retain Businesses

At long last, NJ is close to a détente between the Legislature and the Governor’s office on a new business incentives program designed to attract and retain businesses to NJ. The new recovery and reform package will be known as the “New Jersey Economic Recovery Act of 2020,” or Assembly Bill 4. It is scheduled for a remotely-held bill hearing at the Assembly Appropriations Committee Friday, Dec. 18, at 11 a.m.

According to Tim Sullivan, the CEO of NJ Economic Development Authority, the new 6 year, $11.5B incentives program will focus on job creation, innovation, and helping to solve longstanding economic inequality issues.

According to NJ ROI, there will be an Assembly Appropriations Committee meeting Friday, with Assembly and Senate votes likely scheduled for Monday.

Some of the highlights of the program:

• Annual Cap – it will have an annual cap of $1.5 billion, with each of the programs having an individual cap;

• Per Jobs Cap and Per Business Cap – it will cap per-job credits and total credits per business — the previous program had no limits on either — and awards will be focused on high-growth industries;

• Transformational Projects – there will be an additional fund of approximately $2.5 billion for yet-to-be-defined “transformational” projects, thus giving the state the ability to offer massive incentives for Amazon-like projects;

• North/South Jersey – the program will include a North-South agreement, with approximately 1 of every 3 dollars reserved for the seven counties that make up South Jersey;

• Credits – it will include a food desert alleviation program, a state-level Historic Tax Credit, a brownfields remediation program and a program designed to support expansion of anchor institutions like higher education, hospitals and arts/culture institutions;

• Evergreen Investment – it will include the Governor’s Evergreen investment program;

• Main Street Businesses – it will have a $50 million direct appropriation to support Main Street businesses through grants, loans and technical assistance. It will do so with 25% being set aside to directly support minority- and women-owned firms; and

• Prevailing Wage – it will require community benefit agreements that include prevailing wage rules and new requirements for building service workers.

December 14, 2020 by Brad A. Molotsky

COVID-19: Vaccines to arrive in NJ on Tuesday 12-15-20 – Who will Receive them First?

As the Pfizer FDA approved COVID-19 vaccines begin to arrive in NJ on 12-15-20, the burning question on some people’s minds is who will be getting inoculated first?

Per the NJ Health Commissioner, vaccines will be distributed to almost anyone who works in the healthcare field. The list of eligible recipients is intentionally broad.

Vaccinations will take place at 6 regional hospitals, including AtlantiCare Regional Medical Center in Atlantic City and Cooper University Hospital in Camden, University Health in Newark, AtlantiCare and Robert Wood Johnson University Hospital in New Brunswick

The list of those at the front of the line includes any “licensed healthcare worker” in the state of New Jersey, such as doctors, nurses, pharmacists, dentists, physical therapists and occupational therapists, as well as anyone on their staff, such as receptionists.

The list of eligible healthcare workers includes:

– Community health workers such as midwives and doulas
– Dialysis center workers
– Environmental service workers
– Funeral care and autopsy workers
– Homeless shelter workers and residents
– Hospice facility staff
– Lab technicians
– Mortuary service workers, consultants or contractors who deal with medical services but who may not work in an actual medical office,
– Medical marijuana facilities
– Paramedics, EMTs and first-aid responders.
– Rehabilitation staff
– Residents and workers in psychiatric hospitals
– Unpaid workers like students who are studying in hospitals
– Visiting nurses, nurses who work at assisted living homes
– Workers and residents at group homes and assisted-living complexes
– Workers at family planning sites.

Per NJ BIZ, there are 650,000 New Jersey residents who fit into one of those above categories. It does not mean all 650,000 will get the vaccine in December: The state of New Jersey has 76,050 doses of the Pfizer vaccine to give in the first round.

Those who live in long-term care facilities will also start receiving their first round of the vaccine this week. More than 20,000 doses will go to long-term care facilities and 54,000 will go to hospitals, which will be the only points of dispensing this week.

All 6 hospitals receiving the vaccine have arctic-level, subzero freezers in place to store the vaccines. Very soon, however, 53 acute-care hospitals in New Jersey will also have the Pfizer vaccine.

A second vaccine from Moderna is expected to receive Food & Drug Administration approval later this week.

18 acute care hospitals will receive the Moderna vaccine likely by the beginning of next week. The Moderna vaccine does not need to be kept at such a cold temperature as the Pfizer vaccine.

By way of comparison, the Pfizer vaccine must be stored at -70 degrees Celsius while the Moderna vaccine may be stored at -20 degrees Celsius.

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Sharon Caffrey, or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

December 7, 2020December 7, 2020 by Brad A. Molotsky

COVID-19: PA Adopts CDC 10 day Quaratine timing for Travel

Per PA Department of Health guidelines posted on Friday, December 5, 2020, PA is lowering the COVID-19 quarantine period that out-of-state travelers will need to observe. The new guidance, in line with CDC recommendations, reduces the number of quarantine days from 14 to 10 days.

Under the new guidance, travelers to PA should self-isolate for 10 days if they test positive for COVID-19 or if testing is not available. They should also self-quarantine for 7 days after travel even if they test negative. Note that the self-quarantining is suggested rather than mandatory.

Recommended timing for tests per the CDC are to get a test between 1 and 3 days before the trip, and between 3 to 5 days after the trip.

In November, the Department of Health provided an updated travel order requiring anyone over the age of 11 who visits from another state to provide evidence of a negative COVID-19 test or place themselves in a travel quarantine for 14 days upon entering. Travel quarantine guidance was changed to 10 days last Friday, on Dec. 5 based on new CDC guidance.

The PA order does not apply to people who commute to and from another state for work or medical treatment, those who left the state for less than 24 hours, and those complying with a court order, including child custody.

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Linda B. Hollinshead, Elisabeth Bassani, Sharon Caffrey, or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

December 7, 2020 by Brad A. Molotsky

COVID-19 – NJ adopts CDC guidelines for inbound travelers – reducing self-isolation quarantine timing to 10 day

Per NJ Department of Health guidelines posted on Friday, December 5, 2020, NJ is lowering the COVID-19 quarantine period that out-of-state travelers will need to observe. The new guidance, in line with CDC recommendations, reduces the number of quarantine days from 14 to 10 days.

Under the new guidance, travelers to NJ should self-isolate for 10 days if they test positive for COVID-19, or if testing is not available. They should also self-quarantine for 7 days after travel even if they test negative. Note that the self-quarantining is suggested rather than mandatory.

Recommended timing for tests per the CDC are to get a test between 1 and 3 days before the trip, and between 3 to 5 days after the trip,

Given the recent numbers of new cases, Gov. Phil Murphy and other state and federal health officials have discouraged any non-essential travel, especially the family gatherings typical of the holiday season.

Per NJ Biz, “essential travel” over state lines is largely exempt, and that includes for going to work, medical reasons, military purposes or court orders such as child custody, according to the state health department.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Paul Josephson, or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

November 20, 2020November 20, 2020 by Brad A. Molotsky

Renewables – Bipartisan Bill introduced to extend the Solar ITC by an additional year to 2025

Earlier this week, on 11-19-20, a bipartisan bill was introduced in the House of Representatives which would make the renewable energy investment tax credit (ITC) temporarily refundable for projects that break ground by the end of 2021 and would extend the ITC phasedown by one year.

Titled “The Solar Jobs Preservation Act of 2020“, the bill is intended to offset the effects of the COVID-19 pandemic on solar development.

Under the proposed legislation, the ITC would be reduced to 10% by Jan. 1, 2025, a year later than under current law.

We will continue to track this bill and see how the Senate reacts to it, but given the bi-partisan support we would expect to see a positive reaction, that said, who knows given this year.

Duane Morris has an active team of lawyers who engage in the renewables and investment tax credit space. If you have any questions or thoughts, please contact Brad A. Molotsky, Sheila Slocum Hollis, Patrick Morand, Brad Thompson or any of the Duane Morris lawyers you regularly engage with.

Be well and stay safe.

November 12, 2020 by Brad A. Molotsky

COVID-19: Counties and Municipalities in NJ are now permitted to establish curfews for Non-Essential Businesses

Earlier today, November 12, 2020, Governor Murphy executed an Executive Order allowing municipalities and counties the option to impose curfews on all non-essential businesses as early as 8:00 p.m. Municipalities and counties do not have to impose restrictions, but they will now have the power to do so if they choose.

In his press briefing, the Governor advised that other municipality or county actions such as: restrictions on essential businesses, full business closures, or restrictions on gatherings and capacity that differ from the statewide rules are “impermissible and will be invalidated.”

Per our earlier reporting, a closure requirement for all bars, restaurants and clubs at 10 PM until 5:00 AM goes into effect today and all bar side seating is prohibited.

Per reporting from NJ Biz, Gov. Murphy additionally announced that New Jersey was chosen by the Federal Department of Health and Human Services as one of the first states to receive CUE Health’s molecular rapid test. He said that the test has shown to produce results with 99% accuracy in approximately 20 minutes.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Paul Josephson, Matthew LoBello or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

November 12, 2020 by Brad A. Molotsky

COVID-19: NJ Announces $60M of Additional Covid-Relief Small Business Grants

On November 11, 2020, Gov. Phil Murphy announced a commitment of at least $60 Million in additional relief grants under Phase 3 of the New Jersey Economic Development Authority’s (NJEDA’s) Small Business Emergency Assistance Grant Program (SBEAG).

This funding is in addition to $70 M of funds already allocated for the current phase of the SBEAG program and will enable the NJEDA to fulfill grants for the entire pipeline of eligible businesses that applied for Phase 3 funding prior to the application deadline.

Without this additional funding, approximately 13,000 of the nearly 22,000 businesses that applied for Phase 3 grants would have been denied a grant given the amount of interest in the program.

Per NJ Business Today, the NJEDA’s suite of COVID-19 relief programs provides a variety of resources for businesses of all sizes, including grants for small businesses, zero-interest loans, support for private-sector lenders and CDFIs, and funding for entrepreneurs.

One of NJEDA’s relief programs is the SBEAG, which provides grants to small businesses impacted by the pandemic.

To attempt to achieve an equitable distribution of funds, the NJEDA set aside 1/3 of the funding for this program to support qualified businesses located in NJ Opportunity Zones. The goal of this new round of allocations is to help minority and women-owned businesses obtain some of the available grant funds.

According to NJ Business Today, more than 22,000 small businesses have been approved for grants worth more than $64.9 million through Phases 1 and 2 of the Small Business Emergency Assistance Grant Program. The average grant award has been roughly $3,000, which indicates the average approved business has three full-time equivalent employees.

Phase 3 significantly expands eligibility for the Grant Program and increases the amount of funding businesses can receive.

Eligibility – Any business or non-profit located in New Jersey, including home-based businesses, with 50 or fewer full-time equivalent employees (FTEs) is eligible to receive grant funding during Phase 3, including businesses that received funding in previous phases of the program.

Opportunity Zone Set Asides – To ensure funding goes to businesses hit hardest by the pandemic, Phase 3 sets aside funding for restaurants, micro-businesses, and businesses based in the state’s 715 Opportunity Zone-eligible Census tracts.

To date over $250 M of funding from NJEDA has been allocated to support small businesses with a significant focus being on restaurants, micro-businesses, and minority- and women-owned firms.

In addition to the SBEAG Program, the NJEDA administers a variety of technical assistance and low-cost financing programs for small and mid-sized businesses impacted by COVID-19.

More information about NJEDA’s programs and other State support is available at https://covid19.nj.gov.

November 10, 2020November 10, 2020 by Brad A. Molotsky

COVID-19: PA Legislature considering $200M Live Music and Theatre Venue Covid-19 Relief Bill – Save our Stages

According to the Philadelphia Business Journal, a bill aiming to alleviate the financial impact that Covid-19 has been having on independent live music venues has been introduced in the Pennsylvania House of Representatives.

HB2894, dubbed the Pennsylvania “Save Our Stages” Act, looks to allocate $200 million of Cares Act funding for grants to be made available to independent venue operators, theaters and promoters that have had business interrupted by the pandemic.

The Bill was introduced by Rep. Jake Wheatley (D) from the Allegheny County area. As proposed, the Bill could impact approximately 225 independent live music venues.

Eligible recipients would include those that organize, promote, produce, manage or host ticketed live concerts, comedy shows, theatrical productions or other events by paid performing artists.

Selected businesses must have fewer than 500 full-time employees, not be publicly traded, and not operate venues in more than 10 states, among other criteria.

Grants would be no greater than 45% of gross revenue from 2019 or $2 million (whichever is less) and could be applied to expenses incurred from March 1 through Dec. 31. The funds could be applied to various costs including payroll, rent, utilities, mortgage interest payments, insurance, personal protective equipment and existing loans.

HB2894 is currently under review by the House Commerce committee.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Matthew LoBello or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

November 9, 2020 by Brad A. Molotsky

COVID-19: NJ Announces Additional COVID-19 related Restrictions – Restricting Indoor Food service after 10 PM and Indoor Sports

As of this morning, November 9, 2020, NJ Gov. Phil Murphy is set to follow through on his weekend commentary to impose new COVID-19 related restrictions given NJ’s continued increasing COVID-19 numerics.

Per NJBIZ, the Murphy administration has indicated that bars and restaurants will soon need to close all indoor service by 10 p.m. Interstate indoor organized sports will also be prohibited indefinitely, according to sources in the Murphy administration.

The Governor will announce the restrictions, and provide additional details, during his 1 p.m. news conference.

Specifically, restaurants, casinos and bars will be prohibited from serving food and alcohol between 10 p.m. and 5 a.m. and these new rules will take effect on November 12, 2020. Restrictions will also be placed on seating.