New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31Y - HISTORIC PROPERTY REINVESTMENT PROGRAM › Subchapter 1 - HISTORIC PROPERTY REINVESTMENT PROGRAM › Section 19:31Y-1.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, as used in this subchapter,
					 shall have the following meanings, unless the context clearly indicates
					 otherwise:
" Act" means sections 2 through 8 at
					 P.L.
					 2020, c. 156, as
					 amended (N.J.S.A. 34:1B-270 through 34:1B-276).
" Affiliate" means an entity that directly or indirectly
					 controls, is under common control with, or is controlled by, the business
					 entity. Control exists in all cases in which the entity is a member of a
					 controlled group of corporations, as defined pursuant to section
					 1563 of the Internal Revenue Code
					 of 1986 (26 U.S.C. § 1563), or the entity is an organization in a group of
					 organizations under common control, as defined pursuant to subsection (c) of
					 section 414 of the Internal Revenue Code
					 of 1986 (26 U.S.C. § 414).
" Archeology and historic preservation standards" means
					 the Secretary of the Interior's Standards and Guidelines for Archeology and
					 Historic Preservation, 48 Fed. Reg. 44716, as updated and revised by the
					 National Park Service.
" Authority" means the New Jersey Economic Development
					 Authority established pursuant to section 4 at P.L. 1974, c. 80 (N.J.S.A.
					 34:1B-4).
" Board" means the Board of the New Jersey Economic
					 Development Authority, established pursuant to section 4 at P.L. 1974, c. 80
					 (N.J.S.A. 34:1B-4).
" Building services" means any cleaning or routine
					 building maintenance work, including, but not limited to, sweeping, vacuuming,
					 floor cleaning, cleaning of rest rooms, collecting refuse or trash, window
					 cleaning, securing, patrolling, or other work in connection with the care or
					 securing of an existing building, including services typically provided by a
					 door-attendant or concierge. "Building services" shall not include any skilled
					 maintenance work, professional services, or other public work for which a
					 contractor is required to pay the "prevailing wage" as defined in section 2 at
					 P.L. 1963, c. 150 (N.J.S.A. 34:11-56.26).
" Business entity," "developer," or "applicant" means a
					 person who enters or proposes to enter into a rehabilitation agreement pursuant
					 to the provisions of section 4 at
					 P.L.
					 2020, c. 156 (N.J.S.A.
					 34:1B-272) and that has, or will have, site control over the qualified property
					 or transformative property, including, but not limited to, a lender that
					 completes a rehabilitation project, operates a rehabilitation project, or
					 completes and operates a rehabilitation project.
" Co-applicant" means an entity that is non-profit for
					 taxation purposes pursuant to the provisions at Section 501(c)3 of the Internal
					 Revenue Code; contributes capital, real property, or services related to the
					 project that directly affect and serve the anticipated residents, tenants, or
					 customers of the tenants of the redevelopment project; and enters into a
					 participation agreement with the business entity that specifies the
					 co-applicant's participation in the redevelopment project.
" Compliance period" means a period of five years starting
					 immediately after the conclusion of the selected rehabilitation period.
" Cost of rehabilitation" or "eligible costs" means the
					 consideration given, valued in money, whether given in money or otherwise, for
					 the materials and services that constitute the rehabilitation. Eligible costs
					 shall be all costs associated with the structural components, as defined at 26
					 CFR 1.48-1(e)(2), within the qualified property or transformative property, and
					 any soft costs associated with the rehabilitation project. Eligible costs shall
					 not include any costs associated with an increase in total building
					 volume.
" Director" means the Director of the Division of Taxation
					 in the Department of the Treasury.
" Equity" means business entity-contributed capital that
					 may consist of cash, deferred development fees, costs for project feasibility
					 incurred within the 12 months prior to application, property or site value less
					 any mortgages when the business entity owns the project site, and any other
					 investment by the business entity in the project deemed acceptable by the
					 Authority. Property or site value shall be valued at the lesser of: the
					 purchase price, provided the property or site was purchased pursuant to an
					 arm's length transaction within 12 months of application; or the value as
					 determined by a current appraisal acceptable to the Authority. Equity shall
					 include Federal or local grants and proceeds from the sale of Federal or local
					 tax credits, including, but not limited to, the Historic Rehabilitation Tax
					 Credit, 26 U.S.C. § 47, Low-Income Housing Tax Credit, 26 U.S.C. §
					 42, and New Market Tax Credit, 26 U.S.C. § 45D. Equity shall not include
					 State grants or tax credits or proceeds from redevelopment area bonds. For a
					 residential project utilizing Low-Income Housing Tax Credits awarded by the New
					 Jersey Housing and Mortgage Financing Agency, equity includes the portion of
					 the developer's fee that is deferred for a minimum of five years.
" Government-restricted municipality" means a municipality
					 in this State with a municipal revitalization index distress score of at least
					 75, that met the criteria for designation as an urban aid municipality in the
					 2019 State fiscal year, and that, on the effective date of
					 P.L.
					 2020, c. 156 (N.J.S.A.
					 34:1B-269 et seq.), is subject to financial restrictions imposed pursuant to
					 the Municipal Stabilization and Recovery Act,
					 P.L.
					 2016, c. 4 (N.J.S.A.
					 52:27BBBB-1 et seq.), or is restricted in its ability to levy property taxes on
					 property in that municipality as a result of the State of New Jersey owning or
					 controlling property representing at least 25 percent of the total land area of
					 the municipality or as a result of the Federal government of the United States
					 owning or controlling at least 50 acres of the total land area of the
					 municipality, which is dedicated as a national natural landmark.
" Income producing property" means a property that is used
					 in a trade or business or to produce rental income. A property is used in a
					 trade or business if the property generates income.
" New Jersey S corporation" means the same as the term is
					 defined in section 12 at P.L. 1993, c. 173 (N.J.S.A. 54A:5-10).
" Officer" means the State Historic Preservation Officer
					 or the official within the State designated by the Governor or by statute in
					 accordance with the provisions of Chapter 3023 of Title 54, United States Code
					 (54 U.S.C. §§ 302301 et seq.), to act as liaison for the purpose of
					 administering historic preservation programs in the State.
" Partnership" means an entity classified as a partnership
					 for Federal income tax purposes.
" Program" means the Historic Property Reinvestment
					 Program established by sections 2 through 8 at
					 P.L.
					 2020, c. 156
					 (N.J.S.A.
					 34:1B-270 through 276).
" Project financing gap" means the part of the total cost
					 of rehabilitation, including reasonable and appropriate return on investment,
					 that remains to be financed after all other sources of capital have been
					 accounted for. Sources of capital include, but are not limited to, equity,
					 which shall not be less than 20 percent of the total cost of rehabilitation,
					 and investor or financial entity capital or loans. The business entity, after
					 making all good faith efforts to raise additional capital, certifies that
					 additional capital cannot be raised from other sources. For a redevelopment
					 project located in a government-restricted municipality, the equity shall not
					 be less than 10 percent of the total cost of rehabilitation.
" Property" means a structure, including its site
					 improvements and landscape features, assessed as real property, and used for a
					 commercial purpose, or residential rental of at least four dwelling units, or a
					 combination of both. Property shall not include multiple separate rowhouses
					 included in a single application.
" Qualified incentive tract" means a population census
					 tract having a poverty rate of 20 percent or more, or a census tract in which
					 the median family income for the census tract does not exceed 80 percent of the
					 greater of the Statewide median family income or the median family income of
					 the metropolitan statistical area in which the census tract is situated.
" Qualified property" means a property located in the
					 State of New Jersey that is an income producing property, and that is:
1. Individually listed, or located in a
				  district listed on the National Register of Historic Places in accordance with
				  the provisions at Chapter 3021 of Title 54, United States Code (54 U.S.C.
				  §§ 302101 et seq.), and if located within a district, certified by
				  the Officer as contributing to the historic significance of the
				  district;
2. Individually listed,
				  or located in a district listed on the New Jersey Register of Historic Places
				  pursuant to P.L. 1970, c. 268 (N.J.S.A. 13:1B-15.128 et seq.), and if located
				  within a district, certified by the Officer as contributing to the historic
				  significance of the district;
3.
				  Individually designated, or located in a district designated by the Pinelands
				  Commission as a historic resource of significance to the Pinelands in
				  accordance with the Pinelands comprehensive management plan adopted pursuant to
				  the Pinelands Protection Act, P.L. 1979, c. 111 (N.J.S.A. 13:18A-1 et seq.),
				  and if located within a district, certified by the Pinelands Commission as
				  contributing to the historic significance of the district; or
4. Individually identified or registered, or
				  located in a district composed of properties or structures and such district is
				  identified or registered, for protection as significant historic resources in
				  accordance with criteria established by a municipality in which the property,
				  structure, or district is located if the criteria for identification or
				  registration has been approved by the Officer as suitable for substantially
				  achieving the purpose of preserving and rehabilitating buildings of historic
				  significance within the jurisdiction of the municipality, and if located within
				  a district, certified by the Officer as contributing to the historic
				  significance of the district.
" Reasonable and appropriate return on investment" means
					 the discount rate at which the present value of the future cash flows of an
					 investment equal the cost of the investment. For purposes of the analysis of
					 the reasonable and appropriate return on investment, an investment shall not
					 include any Federal, State, or local tax credits. For a residential project
					 utilizing Federal tax credits under the Low-Income Housing Tax Credit Program
					 awarded by the New Jersey Housing and Mortgage Finance Agency, the reasonable
					 and appropriate return on investment shall be based upon the approval of
					 deferred developer fees pursuant to
					 N.J.A.C.
					 5:80-33. The Authority may establish a
					 deferred developer fee analysis for rehabilitation projects utilizing other tax
					 credits, including, but not limited to, the Federal Historic Rehabilitation Tax
					 Credit, as equity if the reasonable and appropriate return on investment
					 analysis is not applicable, including, but not limited to, when such tax
					 credits are the sole or primary equity for the rehabilitation project.
" Rehabilitation" means the repair or reconstruction of
					 the exterior or interior of a qualified property or transformative property
					 necessary to make an efficient contemporary use possible while preserving the
					 portions or features of the property that have significant historical,
					 architectural, and cultural values.
" Rehabilitation agreement" means the contract executed
					 between a business entity, any co-applicant, if applicable, and the Authority
					 pursuant to section 4 at
					 P.L.
					 2020, c. 156 (N.J.S.A.
					 34:1B-272), which sets forth the terms and conditions under which the business
					 entity and any co-applicant may receive the tax credit authorized pursuant to
					 the provisions of sections 2 through 8 at
					 P.L.
					 2020, c. 156 (N.J.S.A.
					 34:1B-270 through
					 34:1B-276).
" Rehabilitation of the exterior of the qualified property
					 or transformative project" or "repair or reconstruction of the exterior of the
					 qualified property or transformative property" means the repair or
					 reconstruction of the building envelope, exterior historic finishes, and
					 exterior fixtures and structural or substrate components of the exterior of a
					 qualified property or transformative property.
" Rehabilitation of the interior of the qualified property
					 or transformative property" or "repair or reconstruction of the interior of the
					 qualified property or transformative property" means the repair or
					 reconstruction of the structural or substrate components and electrical,
					 plumbing, and heating components within the interior of a qualified property or
					 transformative property.
" Rehabilitation project" means a specific construction
					 project or improvement, or phase of a project or improvement, undertaken by a
					 business entity that includes the rehabilitation of a qualified property or
					 transformative property.
" Selected rehabilitation period" means the period
					 starting on the date the rehabilitation agreement is executed during which, or
					 parts of which, a rehabilitation is occurring. The selected rehabilitation
					 period shall be 24 months, but a business entity may choose a selected
					 rehabilitation period of 60 months if a rehabilitation is reasonably expected
					 to be completed in distinct phases set forth in written architectural plans and
					 specifications completed before or during the physical work on the
					 rehabilitation. For purposes of this definition, a phase may be an early site
					 package, demolition, or abatement, or a portion of a project that results in a
					 separate certificate of occupancy or certificate of acceptance. The selected
					 rehabilitation period shall end at the earlier of either 24 or 60 months,
					 respectively, or the issuance of the final temporary certificate of occupancy
					 or equivalent.
" Soft costs" means costs not directly related to
					 construction, including capitalized interest paid to third parties, real estate
					 taxes, utility connection fees, accounting, title/bond insurance,
					 fixtures/equipment with a useful life of five years or less, affordable housing
					 fees, and all costs associated with financing, design, engineering, legal, or
					 real estate commissions, including, but not limited to, architect fees, permit
					 fees, loan origination and closing costs, construction management, and freight
					 and shipping delivery. The term does not include early lease termination costs,
					 air fare, mileage, tolls, gas, meals, packing material, marketing and
					 advertising, temporary signage, incentive consultant fees, Authority fees, loan
					 interest payments on permanent financing, escrows, reserves, pre-opening costs,
					 commissions and fees to the developer, project management, or other similar
					 costs.
" Total cost of rehabilitation" means any and all costs
					 incurred for, and in connection with, the rehabilitation project by the
					 business entity and any affiliate of the business entity until the issuance of
					 a permanent certificate of occupancy, or upon such other event evidencing
					 project completion as set forth in the rehabilitation agreement, which shall
					 include, but is not limited to, project costs, soft costs, and cost of
					 acquisition of land and buildings.
" Transformative project" means a specific construction
					 project or improvement or phase of a project or improvement undertaken by a
					 business entity that includes the rehabilitation of a transformative
					 property.
" Transformative property" means a property that
					 is:
1. An income-producing
				  property, not including a residential property, whose rehabilitation the
				  Authority determines will generate substantial increases in State revenues
				  through the creation of increased business activity within the surrounding
				  area;
2. Individually listed on the
				  New Jersey Register of Historic Places pursuant to P.L. 1970, c. 268 (N.J.S.A.
				  13:1B-15.128 et seq.) and which, before the enactment of
				  P.L.
				  2020, c. 156
				  (N.J.S.A.
				  34:1B-269 et seq.), received a determination
				  of eligibility from the Keeper of the National Register of Historic Places in
				  accordance with the provisions of Part 60 of Title 36 of the Code of Federal
				  Regulations; and
3. Located within
				  a one-half mile radius of the center point of a transit village, as designated
				  by the New Jersey Department of Transportation, and located within a city of
				  the first class, as classified pursuant to
				  N.J.S.A.
				  40A:6-4, or located within a
				  government-restricted municipality.