New Jersey Aspire Program

Last month, Governor Murphy signed into law the New Jersey Economic Recovery Act of 2020 (NJERA, or the Act), which restructured the New Jersey Economic Development Authority’s (NJEDA) corporate tax incentive programs.

One such incentive is the Aspire Program, the replacement for the Economic and Redevelopment Growth (ERG) Program, which provides gaps in financing for costs associated with redevelopment projects aimed at public policy initiatives that would otherwise earn a below-market rate of return. The Aspire Program sets out different guidelines for commercial and residential projects and provides bonuses for distressed neighborhoods and affordable housing.

How does the Aspire Program work?

The NJ Aspire is awarded twiceannually and capped at $100 million per year to support the new economy’s real estate goals.

How does a developer qualify?

A developer must demonstrate that the redevelopment project is not economically feasible without the tax credit, and a financing gap exists.

What are the compliance requirements for a redevelopment project?

The redevelopment project must comply with minimum environmental standards, affirmative action requirements, and prevailing wage requirements.

What are the requirements for a residential and commercial project?

A residential project must (1) meet certain project cost thresholds; (2) set aside a minimum of 20 percent but no more than 50 percent of the units for affordable housing; and (3) set aside at least 5 percent of the units for workforce housing unless the municipality has received substantive certification and the approved affordable housing plan does not require such reservation.

The commercial project requires a letter from the municipal governing body supporting a commercial project that can verify a commercial real estate developer’s equity participation of at least 20 percent of the total project costs. The incremental increase of state revenue realized from the completed project must exceed the amount needed to reimburse the developer for a project financing gap.

Author: Bonnie Susmano,JD, MBA | [email protected]

If you would like to discuss how your business may qualify for the Aspire Program, contact Withum’s State and Local Tax Group.

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