New jersey state incentives
The New Jersey Economic Opportunity ACT of 2013 merges the State’s economic development incentive programs
– TENANTS - The Grow New Jersey Assistance Program (Grow NJ) is now the main job creation incentive program.
– DEVELOPERS - The Economic Redevelopment and Growth Program (ERG) is the State’s key developer incentive program.
– Both programs will expand the number of participating companies by lowering the minimum job threshold, reducing the bar for capital spend, and expanding the geographic locations that will qualify.
Grow NJ *
– Base tax credits ranging from $500 to $5,000 per job, per year; predominantly driven by the State Master Plan and encourages companies to apply for projects in locations that the plan deems more amenable to development.
– Bonus credits from $250 to $5,000 per job, per year, per bonus; awarded for achieving legislative goals and objectives (targeted industries or locations near mass transit and universities).
(*) Grow NJ law sunsets on 6/30/19 (see: www.NJEDA.com)
– Targeted Industries include transportation, defense, energy, logistics, life sciences, technology, health, finance, manufacturing.
– Number of jobs bonus places higher values on bigger projects. Projects with at least 250 jobs, the base credit + job bonus is as follows (i.e. 251 to 400 = $500; 401-600 = $750; 601-800 = $1,000; 801-1,000 = $1,250; 1,001-up = $1,500).
– Targeted locations such as Urban Transportation Hubs, Blighted areas (i.e. Camden), and 3 mile proximity to college/university.
– LEED Silver certification adds additional bonuses.
– Average Salary exceeds County average by 30% then additional bonuses are available.
Conditions and other terms
– Incentives now granted as Tax Credits against state income and saleable to third parties.
– Minimum capital spend on construction and/or FF&E ($40 rsf for relet office space).
– Minimum new job thresholds (35 jobs in most instances).
– The project must satisfy a net benefit test.
– If the annual tax credit exceeds $4 million, then the EDA will do a “gap analysis” test and be able to lower the award to the amount “necessary to complete the project” Employers must maintain 80% of workforce over 1.5 times the term of the tax credit.
Sample ESTIMATED potential Benefit for 250 jobs in Jersey City
(amount is per job/annum)
1. $5000 Base credit + High Job # Creation Bonus
2. $2000 Urban Transit Hub Credit
3. $500 Targeted Industry
4. $250 High Average Salary Bonus
+/- $7,750 per job per annum for 10 years (assumes 15 year lease).
Credits are being sold at market of +/- 90% of value.
Please view the state of New Jersey website: www.NJEDA.com