Mike Barz – Project Development/Infrastructure/P3

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.

February 18, 2021February 18, 2021 by Brad A. Molotsky

NJ: $250M Redevelopment Funding for Walter Rand Transportation Center

On February 17th, Governor Murphy, Congressman Norcross, Senate President Sweeney together with local and county officials announced $250 Million for the redevelopment of the Walter Rand Transportation Center (WRTC) in Camden, NJ. This will be the center’s first major renovation since opening in 1989.

The WRTC Improvement Project will upgrade and enlarge the existing facility and accommodate future transit development and the potential for new retail, office, housing and hospitality opportunities utilizing Transit-Oriented Development (TOD) design standards.

The project will ultimately replace the existing facility with an expanded multi-purpose transit center that in intended to provide an improved link for transportation in South Jersey and serve as an interlink to between the NJ Transit bus system, and the light rail systems of PATCO and the River Line.

It has been reported that NJ TRANSIT plans to issue an RFP from qualified professional firms to conduct Conceptual Design, Preliminary Engineering, Final Design Engineering, and Construction Assistance for the WRTC Improvement Project.

Duane Morris has an active team of lawyers who engage in the public-private partnership (P-3) 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.

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.