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Brownfields Loan Program

The Brownfields Loan Program provides financing to potential brownfield site purchasers and current brownfield site owners (including local government redevelopers) that intend to develop commercial (including but not limited to manufacturing), retail, mixed-use developments, expansions or reuses.

Parties responsible for contamination of brownfield site, related to party responsible for contamination of brownfield site, or parties that have indemnified a responsible party or a party related to a responsible party are not eligible for the Brownfields Loan Program.

 

Applications for the Brownfields Loan Program are still in development.  Please continue to check this page for further updates on applications and competitive application rounds.


  • Dollar Amount

    Loans of up to $5 million to potential brownfield site purchasers and current brownfield site owners for costs associated with brownfields site remediation

  • Uses

    Loan proceeds can be used for eligible project development costs


    Please see "Eligible Uses" below for more information

  • Benefits

    Low-interest bridge financing that makes the remediation phase of a brownfields redevelopment project feasible.


    Interest rates may be further reduced depending on the proposed end-use of the redevelopment site.

  • Eligibility

    Please see Eligible Applicants, Sites and Uses below for more information

Available Financing:

  • Maximum loan amount: $5,000,000
  • Minimum loan amount: $100,000


Financing will be made available through competitive application rounds - please see "Scoring Criteria" below for more information.
 

Eligible Applicants:

 
  • Potential brownfield site purchasers and current brownfield site owners (including local government redevelopers) that intend to develop commercial (including but not limited to manufacturing), retail, mixed-use developments, expansions or reuses. Parties responsible for contamination of brownfield site or related to party responsible for contamination of brownfield site, are not eligible for financing nor may an applicant have indemnified a responsible party or a party related to a responsible party.
 
  • Applicants must be able to demonstrate site control or a path to site control.
 
  • Applications must be accompanied by a letter of support from the mayor of the municipality in which the brownfield site is located.
 
  • Municipalities applying for a Brownfields loan require Local Finance Board approval.
 
  • Applicant must provide owner equity* equal to a minimum of 10% of the appraised value of the property in a remediated state.

* Equity includes cash, development fees, costs for remediation and redevelopment project feasibility incurred within the 12 months prior to application, property value less any mortgages or liens, and the portion of the developer’s fee that is delayed for a minimum of five years, and any other investment by the developer in the remediation or redevelopment project deemed acceptable by the Authority. Federal, state and local grant and federal and state tax credits are not considered equity.

 

Eligible Sites:


Any former or current commercial or industrial site that is currently vacant or underutilized and on which:
 
  • There has been, or there is suspected to have been, a discharge of a contaminant
  • There is a structure upon which abatement or removal of asbestos, polychlorinated biphenyls, contaminated wood or paint, and other structural remedial activities is necessary.
  • Any site as described above that has been remediated for industrial use but requires further remediation for mixed-use residential redevelopment.
 
  • Project must be economically feasible, meaning there is enough cash flow to repay debt financing, including the brownfields loan, and demonstrate a funding gap or that other financing is not currently available.
 
  • Project must have a plan for reuse of the remediated site. 
 
  • Projects previously approved for reimbursement through the Brownfields and Contaminated Site Remediation Reimbursement Program are not eligible.
 
  • The property, in a remediated condition, must have an appraised value equal to or greater than 100 percent of all debt financing, including the requested Brownfields loan amount or applicant must demonstrate other sources of collateral.
 
  • Applicant must provide an LSRP report or other documentation from a qualified professional that demonstrates that the site is a brownfield site (contamination exists on the site).
 

Eligible Uses:


Costs associated with the investigation, assessment, and remediation of a brownfield, including but not limited to:
 
  • Soil, groundwater and infrastructure investigation
  • Assessment
  • Remediation
  • Abatement
  • Hazardous materials or waste disposal
  • Long-term groundwater or natural attenuation
  • Other forms of institutional controls
  • Attorney fees *
  • Planning, engineering and environmental consulting
  • Building and structural issues (including demolition, asbestos abatement, PCB removal, contaminated wood or paint removal or other infrastructure remedial activities)

Use of funds cannot be duplicative of other approved State or Federal grants previously awarded that would pay for the proposed use of funds (i.e. environmental studies and reports that are eligible under HDSRF)

* No more than 20% of the Brownfields loan amount can be used for soft costs.

 

Scoring Criteria:


Projects seeking financing will be required to submit an application during competitive application rounds that will be established by NJEDA. Applications received during a competitive application round that meet the base eligibility requirements detailed above will be further reviewed and scored by NJEDA across a publicly available scoring criteria. 

Financing priority will be determined based upon overall score a project acheives across the scoring criteria, with a minimum score required in order to be eligible for financing.  

The specific scoring criteria is still in development and will be made available when completed.  However, the scoring criteria will be based upon the local or economic impact of the brownfields site/proposed project. This will include: 
 
  • The borrower/developer is a non-profit entity
 
  • Level of economic/environmental distress in the municipality as determined by the brownfield site being located in one of the 50 most distressed municipality per the NJ Department of Community Affairs' current Municipal Revitalization Index, an eligible Opportunity Zone, or a municipality serviced by NJ Department of Environmental Protection's Community Collaborative Initiative.
 
  • Proximity to public transportation - The project is located in a Planning Area 1 (Metropolitan) and within a one-half mile radius, with bicycle and pedestrian connectivity, to the mid-point of a New Jersey Transit Corporation, Port Authority Transit Corporation, or Port Authority Trans-Hudson Corporation rail, bus, or ferry station, including all light rail stations, or a high frequency bus stop as certified by the New Jersey Transit Corporation.
 
  • The consistency between the proposed plan for the reuse of the brownfield site and local redevelopment plans
 
  • The amount of the projected new tax revenues generated from the proposed use of the brownfield site
 
  • The need of the loan to the viability of the remediation project and the redevelopment project
 
  • The public health and environmental benefits of the project in addition to the remediation of the brownfield site.
 
  • Length of time the brownfield site has been abandoned or underutilized


Terms/Rates:

  • 10-year term, with P&I deferred for the first two years and then interest only for years 2-4, then amortizing for the balance (no balloon). No penalty for prepayment.
 
  • Interest Rate: Base rate of 3% with opportunity for rate reductions to a floor of 2% based on the redevelopment project design.  Please see "Rate Reductions" (below) for more information.
 


Rate Reductions:


A project may be eligible for interest rate reductions based on the redevelopment project design*. Interest rate reductions of 20 basis points per applicable criteria may be available for the following criteria:
 
  • Mixed-use residential project consisting of newly-constructed residential units where the developer will reserve at least 20 percent, but not more than 50 percent, of the residential units constructed for occupancy by low- and moderate-income households with affordability controls as required under the rules of the Council on Affordable Housing.
 
  • The project is in an urban food desert community and the redevelopment project includes a food delivery source. Food delivery source” means access to nutritious foods, such as fresh fruits and vegetables, through grocery operators, including, but not limited to a full-service supermarket or grocery store, and other healthy food retailers of at least 10,000 square feet, including, but not limited to, a prepared food establishment selling primarily nutritious ready-to-serve meals.
 
  • A health care or health services center with a minimum of 10,000 square feet of space devoted to primary health care or health services and is located in a distressed municipality with a Municipal Revitalization Index score of 50 or lower.
 
  • The project qualifies as a tourism destination project, which means a non-gaming business facility that will be among the most visited privately owned or operated tourism or recreation sites in the State, and which has been determined by the Authority to be in an area appropriate for development and in need of economic development incentive assistance, including a non-gaming business within an established tourism district with a significant impact on the economic viability of that district.
 
  • The project includes an electric vehicle charging station installation in at least 25 percent of the parking spaces located at the redevelopment project
 
  • The project demonstrates that the parking area at the redevelopment project is capable of conversion to commercial space if there a decrease in demand for parking
 
  • The project includes development of an incubator facility or collaborative workspaces.

* A deed restriction for 10 years after completion of the remediation will be placed on the project requiring the redevelopment  to be consistent with the proposed end-use and factors considered at time of application for eligibility and interest rate reductions.

 

Lien/Collateral:

Lien on property, subordinated to purchase mortgage, removed upon repayment.

 

Applications/Application Rounds:


Applications for the Brownfields Loan Program are still in development.  Please continue to check this page for further updates on applications and competitive application rounds.

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