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Nj future redevelopment forum 2019 ceppi

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Paul Ceppi presentation for obsolete office parks session at Redevelopment Forum 2019.

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Nj future redevelopment forum 2019 ceppi

  1. 1. What Happens to White Elephants When the Circus Leaves Town? Paul Ceppi Managing Director - Business Development March 8, 2019
  2. 2. 2 Governor Murphy proposed a package of five new incentive programs in his Economic Development Plan NJ Forward Program NJ Aspire Program Brownfield Tax Credit Program Historic Preservation Tax Credit Program NJ Evergreen Innovation Fund 1 2 3 4 5 Proposed programs Successor to… Grow New Jersey Program Economic Redevelop- ment & Growth Program (ERG) Brownfield grant program New New
  3. 3. 3 Key proposed program features  Annual program cap of $200M, allocated on a first-come-first serve basis  Five-year awards  Per job annual awards (base: $2,400, max: $6,400)  New jobs in a company (or a business unit) within a targeted industry  New jobs in a US or regional headquarters  New and retained jobs in a “Qualified Incentive Tract” (e.g., distressed census tract)  Major retention projects (e.g., 500-1000+ retained jobs)  Bonus structure aligns with Administration priorities (e.g., local employment that reduces infrastructure burdens and increases vibrancy, local workforce development investments, jobs significantly above county median salaries, transit-oriented projects, research projects with universities)  Increased flexibility for smaller, high-growth companies and larger firms  No capital investment required for companies under 50 people, milestone- based awards for companies under 100 people  Ability to donate to a local infrastructure fund instead of “gold plating” office buildings to meet capital investment requirements  50% of total work hours must be at the facility, 80% of time in State Program design Eligibility criteria Bonus structure Flexibility The NJ Forward program is a jobs-based incentive program that builds off the best parts of the Grow NJ program 1
  4. 4. 4 Key proposed program features  Annual program cap of $100M,  Biannual, competitive award cycle (e.g., twice a year the EDA will accept applications for residential and commercial projects, enabling the state to get the best possible projects for our communities.  Awards capped at financing gap up to 24% of project cost  Supports real-estate goals around innovation economy; targets downtowns near transit; aims to bring low- and moderate-income housing to suburban TOD and job- centric areas, and drive market-rate housing in distressed areas  Economic feasibility  Workforce and apprenticeship programs connected to project  Potential for job creation and economic development  Bonus structure aligns with Administration priorities (e.g., located in a Qualified Incentive Tract, address a food desert, include health care facilities, is transit-oriented, in a tourism destination, support electric vehicles/convertible garages, supports incubators and collaborative workspaces) Program design Project assessment criteria Bonus structure  Benefit of project to the community  Advancement of State, regional, and local development planning strategies  Geographic diversity and extent of social distress of area The NJ Aspire program is a gap-based financing tool that will be run in competitive rounds twice a year 2
  5. 5. 5 Key proposed program features  Annual cap: $20 million  Project cap: $4 million (40% of the actual remediation costs or 40% of the projected remediation costs, whichever is less)  Tax Credit is one-time tax credit issued in the year of completion of remediation  EDA will partner with DEP to create evaluation criteria for two competitive application rounds a year  Must demonstrate a project financing gap exists  Program replaces state’s grant-based brownfields remediation program that relies on appropriations and tends to get used for large projects. Pairs with EDA’s proposed expanded Brownfields Loan Program  Increased tax base, creation of new jobs, utilization of existing infrastructure, protection of human health and the environment  Will catalyze more remediation projects, including smaller projects, increase job creation and economic development, and provide for better budget planning: o Compensation for remediation of pollutants from the interior and/or exterior of contaminated building (ex. asbestos, PCBs, lead paint) o Integrating the tax incentive into a project’s financing strategy can enhance project cash flow Program design Benefits to communities The Brownfield tax credit program will replace current grant programs and pair with the proposed EDA brownfield loan programs 3 Benefits to developers
  6. 6. 6 Key proposed program features  Annual Cap: $20 million  Project Cap: $4 million (16% of the actual cost of rehabilitation or 16% of the projected cost of rehabilitation, whichever is less; a maximum of 24% of costs with potential bonuses)  Must demonstrate a project financing gap  EDA will partner with DEP and DCA to create evaluation criteria for two competitive application rounds a year (may include: economic feasibility, transformative to a neighborhood, potential job creation, other factors that will allow for different sized projects and geographic diversity)  Tax Credit is one-time tax credit issued in the year of completion of redevelopment  20 percent of project is set aside for affordable housing for low- or moderate-income households  Includes incubator facility or collaborative workspaces  Program is modeled after the National Historic Tax Credit program: o Applicant is owner or lessee of historic site/building and intends redevelop site immediately upon approval of tax credit o Applies to income-producing structures only (not for residential) o Allowable costs of rehabilitation are the costs in the national program Program design Bonus structure The Historic Preservation tax credit program will create a new tool for place-based economic development in New Jersey 4 Eligibility
  7. 7. @NewJerseyEDA Visit NJEDA.com for more information.

Paul Ceppi presentation for obsolete office parks session at Redevelopment Forum 2019.

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