By David Engel
On September 4, 2024, New Jersey Governor Phil Murphy signed legislation that liberalizes some requirements and increases the amount of credits for the Historic Property Reinvestment Program and the Brownfield Redevelopment Program. (L. 2024, A4619 (c. 61), effective as stated below.)
Historic Property Reinvestment Program.
Effective retroactively to unapproved applications pending before December 1, 2023, the credits awarded for the rehabilitation of a qualified property located in a qualified incentive tract or government-restricted municipality are increased to 60% (currently 45%) of the cost of rehabilitation or $12 million (currently $8 million), whichever is less. The credits awarded for the rehabilitation of any other qualified property, other than a transformative project, are also increased to 50% (currently 40%) of the cost of rehabilitation or $8 million (currently $4 million), whichever is less. The law also revises the tax credit eligibility requirement for a business to demonstrate a project financing gap to apply only to projects located outside of a government-restricted municipality that have a total rehabilitation cost or total facade rehabilitation cost of at least $5 million.
The New Jersey Economic Development Authority (NJEDA) is given the discretion to make up to 50% of the tax credits available for distribution in a given year to be made available for facade rehabilitation projects. The value of tax credits awarded to a facade rehabilitation project are 50% of the project’s cost of facade rehabilitation, up to a maximum of $4 million. Facade rehabilitation projects refer to projects consisting of the repair or reconstruction of exterior building features, including but not limited to structural components embedded within exterior walls, masonry units and mortar, exterior siding fabric, doors, windows, exterior lighting fixtures, and decorative components, such as metalwork, terracotta units and cast stone which constitute the facades of a qualified property or transformative property.
Brownfield Redevelopment Program.
Effective after rules are adopted for this program, the value of credits awarded for the remediation of a redevelopment project located in a qualified incentive tract or government-restricted municipality is increased to up to 80% (currently 60%) of the actual remediation costs, 80% (currently 60%) of the projected remediation costs set forth in the redevelopment agreement, or $12 million (currently $8 million), whichever is less. The amount of tax credits that may be awarded for a redevelopment project erecting a solar panel array on the site of a closed sanitary landfill has been increased as follows: (1) If the project is located in a qualified incentive tract or a government-restricted municipality, the value of the tax credit would be in an amount equal to 100% of the costs of remediation or $12 million, whichever is less. (2) If the project is located anywhere else in New Jersey, the value of tax credit would be in an amount equal to 100% of the costs of remediation or $8 million, whichever is less.
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