New Jersey Governor Signs New Law Providing New Funds for Businesses in Development Areas

1099609_17171190_01222012.jpgNew Jersey Governor Chris Christie signed a bill into law on January 5, 2012 that creates the Grow New Jersey Assistance Program (GrowNJ), which is intended to promote business and economic development in urban and suburban areas around the state. The program will allocate $200 million from the Urban Transit Hub Tax Credit program and apply it towards relatively small-scale development projects. The program will also expand the reach of the Urban Transit Hub program itself. Sponsors of the bill in the state Assembly describe it as a step forward in efforts to build New Jersey’s reputation as a “business-friendly” state.

New Jersey’s Economic Development Authority (EDA) will administer the GrowNJ program. The program will offer qualifying businesses tax credits worth between $5 million and $8 million over a ten-year period. In order to be eligible, businesses must commit to investing $20 million or more in a “qualified redevelopment zone.” They must also provide at least 100 full-time jobs in the area. Larger projects may allow a business up to $40 million in tax credits under certain circumstances, according to the governor’s office.

The EDA, as part of the new law, will also convey a 12-acre tract of land in downtown Newark to the New Jersey Performing Arts Center. The Center is reportedly considering selling part of the site to the insurance company Prudential for a new office tower. The EDA has stated that it has offered the company a $250 million tax credit if it proceeds with the project.

The Urban Transit Hub program, also administered by the EDA, supports and encourages private capital investment in nine New Jersey cities, known as “urban transit hubs.” Seven of these “hubs” are in the northern part of the state: East Orange, Elizabeth, Hoboken, Jersey City, Newark, New Brunswick, and Paterson. The two other hubs are located in the southwest part of the state in Trenton and Camden. Under the main Urban Transit Hub Program, real estate developers or owners investing at least $50 million and providing 250 or more jobs may qualify for tax credits based on the amount of their qualifying capital investment. The tax credit could total as much as 80 to 100 percent of their investment. The program took effect on June 13, 2008, and businesses may apply for its benefits for a period of five years from that date.

In both the GrowNJ program and the main Urban Transit Hub program, businesses may obtain benefits for either creating new jobs or retaining existing ones. Supporters of the bill creating GrowNJ tout its ability to help smaller businesses who may not have qualified under the larger Urban Transit Hub program. It certainly appears to offer an excellent opportunity for smaller companies or even start-ups to take advantage of tax breaks and other government resources. Critics of the bill say that it expanded the laudable goal of the Urban Transit Hub program, which tends to focus specifically on projects related to transit, too much.

The New Jersey business lawyers at Samuel C. Berger, P.C. offer fixed-fee legal services to businesses and investors who conduct business in north New Jersey and New York. To speak to a member of our skilled legal team, contact us today online or at (201) 587-1500.

More Blog Posts:

Major Downtown Newark Development Offers Opportunities for Small Businesses, New York & New Jersey Business Lawyer Blog, January 12, 2012
State Small Business Credit Initiative Creates Loans for New York and New Jersey Small Businesses, New York & New Jersey Business Lawyer Blog, January 10, 2012
New Jersey Cities are “Blank Slates” for Redevelopment, New York & New Jersey Business Lawyer Blog, January 3, 2012
Photo credit: Manhattan at Sunset by ericortner on stock.xchng.