The New Jersey Economic Development Authority announced Tuesday that it will reopen the residential component of the Economic Redevelopment and Growth Program, utilizing $50 million in tax credits designated in the Economic Recovery Act of 2020.
NJEDA will start accepting applications no earlier than June 1, to provide at least 90 days of preparation time for potential applicants. The ERG program, which was originally created to address projected financing gaps in development projects, had previously stopped accepting new applications in June 2019.
The new phase of the ERG program will be administered based on preexisting ERG regulations and statutes, as amended by the Economic Recovery Act, which added new prevailing wage and minimum wage requirements. NJEDA anticipates issuing a solicitation (or call for applications) document with further information about this process in early April.
Click here for additional information and detailed eligibility requirements.
Under the Economic Recovery Act, residential ERG projects can receive tax credits of up to 30% of total eligible project costs. Projects in five cities — Atlantic City, Camden, Paterson, Passaic and Trenton — can receive tax credits up to 40% of eligible project costs.
ERG tax credits are not meant to be a substitute for conventional debt and equity financing, and applicants should generally have their primary debt financing in place before applying.
Under the Economic Recovery Act, the Aspire program will serve as a successor to the ERG program, offering a gap financing tool to support commercial, mixed use and residential real estate development projects. For more information about Aspire and other programs created by the Economic Recovery Act, please click here.
Tim Sullivan, the CEO of the EDA, said reopening the ERG program will help spur development in a number of ways.
“The extension of the residential portion of the ERG program will support investment in projects that offer attractive housing options for families, while revitalizing surrounding neighborhoods,” he said.
“The inclusion of $50 million for the ERG program by Gov. Murphy and the Legislature will help advance projects that are ready to move forward now, while the new programs created by the Economic Recovery Act are taking shape.”
The Economic Recovery Act was signed by Murphy on Jan. 7 to address the ongoing economic impacts of the COVID-19 pandemic.
