Companies that have been recipients of Grow New Jersey awards are now able to suspend their awards, adjust them — or even terminate them, thanks to recommendations approved Wednesday by the New Jersey Economic Development Authority board of directors.
The accommodations were created by the Economic Recovery Act of 2020.
The amendments to the Grow N.J. program included in the ERA include:
- A business may choose to waive its obligations under the incentive agreement for the 2020 and 2021 tax periods and instead extend the incentive agreement by a corresponding period of time;
- A business may terminate its Grow New Jersey agreement due to the COVID-19 pandemic any time before Dec. 31, 2022, without the NJEDA recapturing previously distributed tax credits;
- A business may amend its Grow N.J. agreement to reset its employment requirements starting with 2020, provided the incentive award is recalculated and reduced to reflect the lower employment.
Applicants seeking additional information about the Grow N.J. modifications should contact NJEDA Customer Care at CustomerCare@njeda.com.
Tim Sullivan, the CEO of the EDA, said the adjustments are a way the state is trying to meet the needs of business owners during the pandemic.
“Businesses of all sizes have endured innumerable challenges caused by the COVID-19 outbreak,” he said. “Gov. (Phil) Murphy’s holistic, proactive response has addressed many of those challenges, but businesses still need flexibility to adapt to the new circumstances the pandemic has created.
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“Providing businesses that were approved for Grow N.J. tax credits that have had to adjust their plans to comply with public health guidance some additional flexibility will enable them to follow through on their commitments to New Jersey’s workers and communities without jeopardizing the incentives for which they were approved.”
Ted Zangari, the chair of the real estate practice at Sills Cummis & Gross P.C., said the accommodations may help both businesses and the state as a whole.
“The NJEDA board is to be commended for giving businesses that chose New Jersey a flexible range of COVID relief options,” he said. “If past economic downturns are any guide, many of the companies that are now being forced to prune their headcount will come back bigger and healthier when the economy springs back to life.”
To verify that companies requesting to terminate their Grow N.J. awards under the new COVID-related provision are doing so due to the COVID-19 public health emergency, EDA staff will require the applicant to submit an explanation of the impact of the public health emergency.
Additionally, for all these new ERA provisions, the CEO or an equivalent officer must certify that no events of default have occurred prior to Executive Order 103 (Health Emergency) in March 2020 and that the facility that was approved for tax credits remains operational. Fees for these amendments will follow existing Grow N.J. program regulations.