BROWNFIELD REDEVELOPMENT INCENTIVE
NJEDA will be opening a second round of the Brownfield Redevelopment Incentive application soon! Future application window dates will be posted here. Sign up at bftaxcredit@njeda.gov for updates.
The Brownfields Redevelopment Incentive is a $50 million per year competitive, project-based tax credit. The program provides a one-time transferrable tax credit to incentivize environmental remediation, abatement, and demolition activities that will allow for the redevelopment of brownfields sites for commercial, retail, or mixed-use development or expansion.
The Eligibility Self-Assessment can walk you through the basic eligibility criteria for the Brownfield Redevelopment Incentive Program.
ELIGIBILITY
The Brownfields Redevelopment Incentive covers specific costs associated with brownfield remediation and redevelopment. Eligible costs include those associated with investigation and remediation of environmental contamination and building and structural remedial activities.
Tax credits will be awarded through a competitive application process to ensure the best projects receive State support. The NJEDA will partner with the NJ Department of Environmental Protection (NJDEP) to create evaluation criteria for competitive application process. To receive tax credits through the program, the developer must demonstrate that a financing gap exists.
To receive tax credits through the Brownfields Redevelopment Incentive Program, a project must
- Be a brownfield.
- Receive a letter of support from the governing body.
- Demonstrate the project is not economically feasible without the tax credit award.
- Prove that a project financing gap exists, and the tax credit being considered for the project is equal or less than the project financing gap.
- Meet prevailing wage requirements for all remediation and construction work for the redevelopment project and subsequent redevelopment project, if applicable, including 10 years for building services.
- Not have started remediation activities by the developer / affiliates (other than environmental assessment and investigation activities) unless the applicant certifies that they could not have reasonably known the full extent of contamination prior to starting the cleanup. Prior environmental assessment and investigation up to 24 months prior to application may be eligible for inclusion in the program.
- Demonstrate that remediation costs are reasonable and appropriate. DEP will review the proposed costs to determine if the costs are eligible for the program and complete a cost reasonableness determination prior to EDA board approval.
- Be in good standing with NJ Department of Environmental Protection, NJ Department of Labor and Workforce Development, and NJ Department of the Treasury
- Have a developer equity contribution of 20% of total cost of remediation (10% in Government Restricted Municipalities and Qualified Incentive Tracts)
- Have site access to perform the remediation
- Meet Green Remediation/Green Building Standards
Additional notes on eligibility:
- Cannabis Businesses are not eligible.
- The redevelopment project can be a remediation-only project.
- Parties that caused or contributed to site contamination are not eligible for the program.
- The applicant must not be in any way “liable” or “responsible” for the discharge of hazardous substances at the site.
- Projects that received a reimbursement through the former Brownfield Contaminated Site Reimbursement Program are not eligible.
AWARD SIZE
The Brownfields Redevelopment Incentive provides one-time tax credits issued in the year remediation is completed. Individual projects can receive 50 percent of actual or projected remediation costs up to $4 million. Individual projects in a Government-Restricted Municipality (GRM) or Qualified Incentive Tract can receive 60 percent of actual or projected remediation costs up to $8 million. Tax credits are transferable and can be redeemed for 75 to 85 percent of their value.
FISCAL AND RESIDENT PROTECTIONS
In order to receive tax credits through the Brownfields Redevelopment Incentive, developers must be in good standing with the NJ Department of Labor, NJ Department of Treasury, and the NJ Department of Environmental Protection. The developer must also enter into a redevelopment agreement with the NJEDA. The municipality in which the project will take place must provide a letter of support.
Projects will also be required to meet minimum environmental standards and pay prevailing wages to construction workers through the completion of the redevelopment project. Projects that include retail and/or distribution centers may require labor harmony agreements. The NJEDA may recapture all or part of a tax credit award if the organization that received the credit does not remain in compliance with its commitments.
FEES
Fees are determined on a tiered basis based on a project’s total cost of remediation as a reasonable proxy for the complexity of a project and, therefore, the administrative expense and staff time required to evaluate the application. The two tiers are those projects with total cost of remediation $5 million and under, and those with total cost of remediation over $5 million.
FEE TYPE | PROJECT SIZE | |
Up to $5MM | >$5MM | |
Application Fee | $2,000 | $7,000 |
Approval Fee | $5,000 | $15,000 |
Tax Credit Issuance Fee | $5,000 | $15,000 |
Transfer/Pledge/Assignment Fee (initial request) | $5,000 | $7,500 |
Transfer/Pledge/Assignment Fee (additional request) | $2,500 | $2,500 |
Minor Modifications and Extensions that do not require Board Approval | $2,500 | $5,000 |
Major Modifications and Extensions which require Board Approval | $5,000 | $10,000 |
Extensions that do not require Board Approval | $2,500 | $5,000 |
Extensions that do require Board Approval | $7,500 | $15,000 |
PROGRAM GUIDE
QUESTIONS
For more information or to ask a specific question, please send an email to bftaxcredit@njeda.gov and a team member will reach out to you. Q&A will be publicly posted to this page.
Please contact the New Jersey Department of Environmental Protection for questions regarding:
- Whether the site of the redevelopment project is a brownfield site pursuant to N.J.S.A. 34:1B-280;
- A determination as to whether the applicant/developer is in any way responsible for the hazardous substance, is a corporate successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to N.J.S.A. 58:10-23.11g, N.J.S.A. 34:1B-281, and N.J.A.C. 19:31-27.3.
- Cost Reasonableness Reviews
For these questions, please send an email to edataxinc@dep.nj.gov.