The New Jersey Economic Development Authority announced Thursday an extension of the commercial components of the Economic Redevelopment & Growth program, better known as ERG.
The extension, which is part of the cleanup process of the New Jersey Economic Recovery Act of 2020, provides a $75 million extension of the commercial component of the ERG, which will begin taking applications Aug 16. (Apply here.)
The residential component of the program, which began accepting applications in June, has been expanded from $50 million to $125 million.
EDA officials said the move will allow some projects to move forward while Aspire, the program create essentially to succeed ERG, is being finalized.
“Thanks to the foresight of Gov. Phil Murphy and the Legislature in reopening the ERG program, essential commercial and residential projects throughout New Jersey will be able to move forward while the new programs created by the Economic Recovery Act are under development,” EDA CEO Tim Sullivan said.
“These programs will drive economic growth and attract new businesses and workers to New Jersey. This is always important, but it is especially crucial now as we begin recovering from the economic impacts of COVID-19.”
Click here for more info on the ERG program.
The commercial ERG Program is an incentive to help developers and businesses address project financing gaps in development or redevelopment projects, including below-market development margins or rates of return.
Qualified projects can receive an incentive grant reimbursement of up to 30% of total eligible project costs. Projects in Atlantic City, Camden, Paterson, Passaic and Trenton can receive reimbursements up to 40% of eligible project costs. Subsidies awarded through the ERG program are not meant to be a substitute for conventional debt and equity financing. Before applying, applicants must have the balance of their funding identified or in place or be able to demonstrate that any terms of other financing are reasonable.
Among other requirements, projects must:
- Be predominantly commercial and contain 100,000 or more square feet of retail, office and/or industrial uses for purchase or lease;
- Be located in a qualifying incentive area;
- Not have commenced any construction at the site of a proposed redevelopment project prior to submitting an application, or demonstrate to the NJEDA that the project would not be completed otherwise or is to be undertaken in phases;
- Demonstrate that a project financing gap exists;
- Demonstrate the tax revenues the state will realize from the project will be greater than the incentive being provided.
Comprehensive information on eligibility for the extended Commercial ERG Program is available here.