By Mayor Raymond McCarthy and Bill Colgan, Managing Partner, Metro Real Estate
In Bloomfield, the redevelopment of our downtown has been over ten years in the making. Ten years of delay, obstruction and false hope. Only through a unique public-private partnership were we able to push our project across the finish line and get the new Glenwood Village project moving forward. With the demolition beginning last August, new jobs, commerce and a revitalized downtown in Bloomfield are all in the pipeline.
But this didn’t have to be a ten-year project if the Urban Transit Tax Credit (UTTC) was expanded to more communities in New Jersey. The UTTC frees capital and promotes investment – something we sorely needed to kick-start our project here in Bloomfield. Fortunately, we were able to band together and overcome a poor economy and a series of setbacks. Not every town and city in New Jersey was as fortunate as us. An expansion of the UTTC will promote smart growth investment and encourage more people to embrace mass transportation and push local governments to plan more sustainable communities adopting green development.
The tenets of the UTTC program are fairly simple. Developers in nine New Jersey cities – Camden, East Orange, Elizabeth, Hoboken, Jersey City, Newark, New Brunswick, Paterson and Trenton – need to hit several major qualifications in order to qualify for the tax credit:
- A minimum $50 million dollar capital investment in a single business facility employing at least 250 people;
- Tenants must occupy space in a qualified business facility that represents at least $17.5 million of the capital investment in the facility. This may be aggregated by up to three tenants to meet the 250 employee requirement;
- Located within a ½ mile of a train station;
- A mixed-use component to the development; and
- A demonstration that the State’s financial support of the capital investment will yield a net positive benefit to both the State and municipality.
The program has proven to be a major tool in attracting and retaining businesses in New Jersey in the long-term, and creating construction jobs in the short-term. Newark has seen $686 million invested in five projects expected to bring more than 1 million square feet of corporate office space, residential units and increased commerce in and around their two rail stations. To date, 13 projects across New Jersey are benefitting from the credit with a total capital investment of $1.5 billion, netting $800 million for the State and preserving or creating 2,300 jobs. As the State Legislature extends the UTTC legislation during this lame duck session, I hope they’ll think bigger in the years to come. More towns and cities in New Jersey need this financial incentive to get stalled redevelopment projects rolling again.
This type of financial incentive isn’t just about retaining businesses in New Jersey; it is about changing the paradigm for how our communities develop. As one of the most densely populated states in the nation, we need innovation in planning our communities. Sprawling suburbs aren’t going to work without destroying every parcel of open space in the Garden State. The UTTC promotes sustainable communities and devalues cars as the primary mode of transportation. Moreover, its green building requirements will reduce our carbon footprint and lower energy costs. So not only does this legislation make New Jersey more business friendly, it makes us more eco-friendly as well. And that is not even counting the thousands of construction jobs that are being created by the UTTC during this current economic recession. Over the last five years the construction industry has been one of the hardest hit sectors in our economy. The UTTC will put these men-and-women back to work building the New Jersey of the future.
This tax credit is an economic engine that needs to be renewed and expanded in the years to come. New Jersey needs to let the private sector know that we are open for business. And in the process we need to put people back to work on green buildings and transit oriented sustainable development. As we move forward past this lame duck session, we need to continue promoting out-of-the-box economic programs like the UTTC that can bring investment back into our State and put people back to work. More cities and towns in New Jersey need access to this valuable financial tool in 2011 and beyond.