Bill revising economic development programs released by Economic Growth Committee

TRENTON – After nearly 90 minutes of testimony, the Senate Economic Development Committee released bill S2583, which provides stronger incentives for economic development projects and construction of affordable housing through its four major economic development programs.

Sen. Ray Lesniak, (R-20), Elizabeth said the bill is needed to address the state’s “stubbornly high” unemployment rate, especially when compared to neighboring states.

“It’s a New Jersey problem,” he said. “This is not an entitlement program. Skin in the game is important.”

Under the bill, the programs that would be affected include (1) the Grow New Jersey Assistance Program (GNJAP); (2) the Economic Redevelopment and Growth Grant Program (ERGGP); and (3) the Urban Transit Hub Tax Credit Program (UTHTCP). The bill adjusts an array of thresholds intended to increase participation.

The bill states that the GNJAP would be the state’s main business attraction and retention incentive, sized and scaled to better match or surpass the packages being offered by neighboring states without unnecessarily exceeding that goal, while also providing bonuses to drive development to smart growth areas in the state.

The bill states that the ERGGP would be the main redeveloper incentive, sized and scaled to more readily close project financing gaps and build public infrastructure critical to redevelopment projects while also providing bonuses to achieve public policy objectives, such as bringing fresh produce to urban “food deserts,” and rebuilding tourism destinations that were destroyed due to  the effects of Hurricane Sandy. For example, 5 percent of project costs would be covered by the state if development takes place in disaster areas.

Under the UTHTCP, the overall cap on the Economic Development Authority’s grant of tax credits to eligible businesses would increase from $1.75 billion to $2.5 billion and add eligibility criteria applicable to manufacturing and logistics businesses. 

Michael McGinniss of NAIOP, a commercial real estate group, supports the legislation, saying New Jersey has no choice but to continually reinvent itself.

Michael Egenton of the state Chamber of Commerce also supports the bill, saying the “streamlined incentives” will help foster smart growth in urban areas and encourage new entrepreneurship.

“There are sections of Trenton waiting for rehabilitation.”

But the Sierra Club’s Jeff Tittel and Alison Mitchell of the New Jersey Conservation Foundation oppose the bill. Mitchell said the amount of areas that should be open for development should be a lot more limited.

She said the bill’s proposal of allowing development in some growth areas of the Highlands “really runs counter to existing state policy.”

Pinelands Preservation Alliance also took issue with the bill’s proposal to have villages and towns included as potential areas of growth.

But Alan Zipkin, a Newark deputy mayor, said the incentive programs help created thousands of jobs and give life to cities.

“These projects won’t move forward without targeted incentive programs,”  he said.

New Jersey Highlands Coalition opposes the bill, because it turns much of the Highlands Planning Area into a growth area.

The group proposed amendments so that it wouldn’t conflict with the Highlands Act.

But Lesniak pointed out the legislation doesn’t apply to new construction, but just renovations.

The committee’s two Republicans, Sen. Steve Oroho and Sen. Joe Kyrillos, expressed enthusiastic support for the bill. Oroho said the bill adds “another tool” to foster smart growth.

Kyrillos said this bill will “help” in making sure New Jersey remains on a progressive path, helping it become an “economic powerhouse.”

 

 

Bill revising economic development programs released by Economic Growth Committee