BROWNFIELD REDEVELOPMENT INCENTIVE
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 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. Parties that caused or contributed to site contamination are not eligible for the program.
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 commenced remediation, unless the full extent of contamination is not known. Prior environmental assessment and investigation up to 24 months prior to application may be eligible for inclusion in the program.
- Certify not in any way responsible or liable for the discharge and are not a corporate successor to the discharger.
- 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 a redevelopment project. The redevelopment project can be a remediation-only project.
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 and an oversight document with NJDEP. 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 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.
Up to $5MM
Tax Credit Issuance Fee
Transfer/Pledge/Assignment Fee (initial request)
Transfer/Pledge/Assignment Fee (additional request)
Minor Modifications and Extensions that do not require Board Approval
Major Modifications and Extensions which require Board Approval
Extensions that do not require Board Approval
Extensions that do require Board Approval