Gov. Phil Murphy unveiled new tax programs focused on historic preservation and mass transit-rich municipalities as part of a grand package for economic reform that he announced Monday in a major economic address drawing more than 600 business leaders and elected officials from around the state.
He also added details to a previously discussed program, New Jersey Innovation Evergreen Fund, which he hopes will bring $500 million in venture capital to the state.
The new programs, which will be managed by the state Economic Development Authority, have been promised by Murphy as he attempts to revamp the incentive programs in the state.
“We will propose a new place-based gap financing tool to help catalyze investments in commercial, residential and mixed-use (including parking) projects, with a particular focus on cities, downtowns and suburban neighborhoods served by mass transit,” he said in his 64-page plan unveiled at ON3 in Clifton/Nutley.
“This new program, NJ Aspire, will facilitate the conversion of surface parking lots, vacant and/or abandoned lots, and other underutilized properties into job and tax-generating development opportunities. NJ Aspire will assist in the development of market-rate housing in distressed communities and, where appropriate, mixed-income and affordable housing near transit in suburban communities.”
It will be a competitive tax credit grant.
“The program we propose will feature a program cap and a per-project cap and will also generate funds to support public infrastructure investments,” according to the plan.
The historic preservation tax is also linked with the Opportunity Zones Act, which passed as part of the federal tax overhaul in December.
In addition to the tax incentives, Murphy has also proposed several initiatives targeting the startup economy, some of which have already been introduced this year.
“We will seek to expand NJEDA’s new NJ Ignite incubator and collaborative workspace rent support to enable more companies to participate and to catalyze the creation of more incubators, accelerators and other collaborative workspaces,” Murphy said in the plan.
Another idea he has previously mentioned has been a venture capital fund.
“(The) New Jersey Innovation Evergreen Fund would raise capital by competitively auctioning state tax credits (over five years) to New Jersey corporations and partnering with private venture capital firms to co-invest these funds,” he said in the report. “Venture capital firms and the Evergreen Fund would then make joint investments in New Jersey-based startups, targeting life sciences, financial technology, digital media and cybersecurity startups in particular.”
The governor is also implementing a revised version of the Grow New Jersey incentive with what he is calling the NJ Forward tax incentive program.
The differences include: a lower base per job, prioritize new job creation rather than retained jobs, focus on all distressed areas in the state with focus on those with public transit assets, and include an annual award cap and reviews to hold all parties accountable.
The plan also reflects Murphy’s increased focus on global investments in the state.
There is also a focus on developing small businesses with a new loan program in the EDA, as well as a directive for the EDA to work with finance companies to develop innovative ways to support small businesses.
Murphy outlined a number of other initiatives and goals in the plan, including saying:
- We will provide gap financing to enable the creation of more collaborative workspaces via our proposed new place-based tax incentive program;
- We will partner with higher education institutions to expand their connection to the innovation economy and enable faculty and students to more easily commercialize their ideas and inventions, including priority initiatives such as the proposed Innovation and Technology Hub (“The Hub”) in New Brunswick;
- We will launch a pilot program partnering with suburban communities to plan for the repositioning of so-called “stranded assets” (office parks and retail assets) for participation in the innovation economy (as the former Bell Labs facility in Holmdel has been reborn as Bell Works, home to new innovative companies);
- We will explore partnering with corporations to test 5G and beyond infrastructure, as well as explore enhancing existing broadband and increased wireless coverage.
Murphy identified crucial investments and ideas that are already in play:
- The Hub in New Brunswick;
- The Gateway Tunnel project.