The New Jersey Economic Development Authority announced Wednesday that it is now taking applications for Aspire, the place-based economic development program that many feel serves as a better version of the Economic Redevelopment & Growth program.
Aspire, created under the New Jersey Economic Recovery Act of 2020, supports mixed-use, transit-oriented development by providing tax credits to commercial and residential real estate development projects that have financing gaps.
Aspire, and its sister program Emerge (essentially the updated the version of the Grow New Jersey program), have different award caps — figures state officials feel are more in line with the state’s competitors. There are lower per-job awards and lower total awards per company. The awards also are shorter in length, seven years instead of 10.
Most projects under Aspire are eligible for tax credits up to $42 million, but projects that meet specific criteria may receive tax credits up to $60 million. Projects that meet certain parameters can qualify as “transformative projects,” which may receive tax credits up to $350 million.
Transformative projects must have eligible costs of at least $100 million and be at least 500,000 square feet or up to 250,000 square feet for film studio projects. Transformative projects must also demonstrate special economic importance to New Jersey and leverage New Jersey’s mass transit assets, higher education assets and other economic development assets to attract or retain employers and skilled workers.
To be eligible for Aspire program tax credits, a project must be located in an eligible incentive location, which may include: Planning Area 1, Aviation District, Port District, Planning Area 2 or other Designated Center that is within a half-mile of a rail transit station or a high-frequency bus stop. Film production projects may be located anywhere in the state.
Projects must also meet minimum size and cost thresholds. Commercial projects must include at least 100,000 square feet of retail or commercial space. Residential projects must have eligible project costs totaling $5 million to $17.5 million, depending on location.
Projects must also comply with environmental laws (including flood hazard requirements), meet green building requirements and pay prevailing wages to construction workers and building service workers.
The Aspire program application, as well as complete rules, eligibility requirements, award sizes and other information, is available here.
Gov. Phil Murphy, who made restructuring the state’s incentive programs a key talking point in his first election, applauded the announcement.
“The Aspire program will help to advance new housing and commercial development projects throughout the state, with a focus on communities that have long been overlooked,” he said. “New Jersey’s economy is rebounding, and housing is in high demand. Our administration has long prioritized transit-oriented development, affordable housing and other projects of public interest, and we will continue to do so under the Aspire program.”
EDA CEO Tim Sullivan agreed.
“Gov. Murphy’s economic development strategy is focused on attracting investment to underserved communities and revitalizing our urban centers and places served by transit,” he said. “With the new Aspire program, we look forward to helping to catalyze a series of mixed-use, transit-oriented, mixed-income and affordable housing projects that advance important administration economic and social goals.”
EDA officials said the Aspire program is part of the suite of resources created under the Economic Recovery Act to address the ongoing economic impacts of the COVID-19 pandemic.
It is meant to encourage mixed-use, transit-oriented development in New Jersey by providing tax credits to commercial and residential development projects that have a financing gap. The amount of tax credits a project is eligible to receive is a percentage of the project’s eligible costs, subject to a cap that is determined by the project’s location, other financing available, and other aspects of the project.
New Jersey Housing and Mortgage Finance Agency Executive Director Melanie Walter said those eligible for Aspire may also be eligible for other awards.
“The Aspire program applicants with affordable housing components will also be eligible for Low-Income Housing Tax Credits, which are issued by the New Jersey Housing and Mortgage Finance Agency,” she said. “These two programs can be leveraged to advance the state’s priorities through the development of transformative mixed-income, mixed-use projects.”
Senate Majority Leader Teresa Ruiz (D-Newark) and Assembly Budget Chair Eliana Pintor Marin (D-Newark) said Aspire will have impact.
“Aspire will help generate greater investment in our communities by providing enhanced incentives for projects in distressed municipalities, including the creation of affordable housing and returning long-dormant sites to productive use,” Ruiz said. “Aspire exemplifies the ERA’s core principles of responsible investment, greater oversight and tangible community benefits.”
Pintor Marin agreed.
“The Economic Recovery Act of 2020 was designed to help communities recover from the pandemic and set them on a path toward sustainable economic growth,” she said. “The Aspire program offers incentives for redevelopment and investment in many areas of the state that have struggled to compete for the type of projects that will move these communities forward.”