New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31D - ECONOMIC REDEVELOPMENT AND GROWTH PROGRAM › Subchapter 1 - ECONOMIC REDEVELOPMENT AND GROWTH PROGRAM › Section 19:31D-1.8 - State incentive grant agreement

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Except for
				  qualified residential projects, mixed use parking projects, or projects
				  involving university infrastructure, if the project receives tax credits, upon
				  approval of the application by the Authority and the State Treasurer, the
				  Authority and the developer will execute a commitment letter providing
				  information specific to the grant amount and containing conditions that must be
				  met prior to receiving the grant. Within one year following the date of
				  approval, the developer shall submit progress information indicating that the
				  developer has financing, copies of all required State and Federal government
				  approvals and all local planning and zoning board approvals, and site control
				  of and site plan approval for the redevelopment project. Unless otherwise
				  determined by the Authority in its sole discretion, the Authority's approval of
				  the tax credits shall expire if the progress information is not received by the
				  Authority within one year of the date of application approval. Upon a receipt
				  of evidence from the developer that it has control of the redevelopment project
				  site and offers of financing, which may be conditioned upon execution of the
				  grant agreement, and that it has met any other conditions set forth in the
				  commitment letter, the Authority and the State Treasurer may enter into a State
				  redevelopment incentive grant agreement with a developer for the reimbursement
				  of incremental State revenues directly realized from businesses operating on
				  the redevelopment project premises.
(b) Except for qualified residential
				  projects, mixed use parking projects, or projects involving university
				  infrastructure, if the project receives tax credits, the Chief Executive
				  Officer of the Authority, in consultation with the State Treasurer, shall
				  negotiate the terms and conditions of any State redevelopment incentive grant
				  agreement. The State redevelopment incentive grant agreement shall include, but
				  not be limited to, the following terms and conditions as determined by the
				  Authority:
1. The eligibility period, the
				  maximum amount of project cost, the maximum percentage reimbursement amount,
				  the maximum aggregate dollar amount of the incentive grant to be awarded the
				  developer, the maximum annual percentage of reimbursement, the particular tax
				  or taxes to be utilized from those listed at N.J.A.C. 19:31D-1.10(a), the order
				  in which multiple taxes will be applied to determine the incentive grant
				  amount, and, for a project receiving an incentive grant in excess of $ 50
				  million, the amount of the negotiated repayment to the State, which may
				  include, but not be limited, to cash, equity, and warrants and shall be up to
				  the amount of the maximum aggregate dollar amount of the reimbursement. If the
				  actual project costs are less than the project costs set forth in the
				  application, the percentage reimbursement amount will be based on the actual
				  project costs. For the purposes of determining the amount and timing of any
				  repayment due for projects receiving an incentive grant in excess of $ 50
				  million, the Authority shall consider such factors as the financial structure
				  of the project, risk of the project, developer returns, magnitude of State
				  support, as well as the returns of various types of revenue generating
				  projects, that is, retail, commercial, and/or hotel. If the project does not
				  produce the anticipated amount of incremental taxes in a given year, the
				  developer shall only receive the approved percentage of actual tax revenue
				  created. No portion of revenues pledged pursuant to
				  P.L.
				  2013, c. 161 shall be
				  subject to withholding or retainage for adjustment, in the event the developer
				  or taxpayer waives its rights to claim a refund thereof in the grant
				  agreement;
2. All payments shall be
				  made annually and subject to annual appropriation and availability of
				  funds;
3. In the absence of
				  extenuating circumstances, the reimbursement schedule, which will indicate the
				  annual percentage amount of reimbursement provided that it not exceed:
i. Seventy-five percent of the annual
				  incremental State revenues; or
ii.
				  Eighty-five percent of the projected annual incremental revenues in a Garden
				  State Growth Zone.
4.
				  Representations that the developer is in good standing, that the project
				  complies with all applicable law, and specifically, that the project will
				  comply with the Authority's prevailing wage requirements
				  P.L.
				  2007, c. 245
				  (N.J.S.A.
				  34:1B-5.1) and affirmative action
				  requirements P.L. 1979, c. 303 (N.J.S.A. 34:1B-5.4),
				  and the project does not and will not violate any environmental law;
5. The frequency of payments and eligibility
				  period, which shall not exceed 20 years, during which that tax credit shall be
				  granted;
6. Description of the
				  occupancy permit or other event evidencing project completion that begins the
				  eligibility period and whether the project will be undertaken in
				  phases;
7. The requirement that the
				  developer submit, prior to the first disbursement of funds under the agreement,
				  satisfactory evidence of actual project costs, as certified by a certified
				  public accountant, evidence of a temporary certificate of occupancy, or other
				  event evidencing project completion that begins the eligibility period
				  indicated in the incentive agreement, and, if applicable, evidence that the
				  municipality is in substantial compliance with the requirements pursuant to
				  N.J.A.C. 19:31D-1.3(a)3. In the event the project cost or square footage of the
				  project are reduced below the amount of project cost or square footage of the
				  project in the approval of the incentive grant, the Authority may reevaluate
				  the fiscal impact analysis and financing gap analysis and reduce the size of
				  the grant accordingly;
8. Annual
				  financial statements, as certified by a certified public accountant and
				  accompanied by an unqualified opinion, reporting the project's financial
				  performance against established milestones for calculating any necessary
				  repayments pursuant to (b)1 above;
9. Representations that the developer will
				  comply with the green building standards pursuant to N.J.A.C.
				  19:31D-1.4(b)20;
10. To the extent
				  the taxes of such businesses are to be reimbursed, covenant that the developer
				  will notify all businesses operating on the redevelopment project premises that
				  certain incremental taxes are to be reimbursed pursuant to the agreement. The
				  developer shall also covenant that the developer shall obtain information about
				  such businesses as is necessary for the State to ascertain the incremental tax
				  revenue. Such information may include, but not be limited to, name, address,
				  taxpayer identification number, change in business ownership and any other
				  information that may be required by the State. The developer shall also
				  acknowledge that the State will not provide to the developer information about
				  individual taxes paid by businesses located at the redevelopment
				  project;
11. Acknowledgement that
				  if the developer has entered into a Brownfield Reimbursement Agreement for the
				  redevelopment project premises, to the extent that the same eligible revenues
				  are identified in both the Brownfields Reimbursement Agreement and the
				  incentive grant, then the incentive grant will not commence until the
				  reimbursement has terminated or otherwise as subject to review of the Division
				  of Taxation;
12. Indemnification
				  and insurance requirements;
13.
				  Events, if any, that would trigger forfeiture of the grant;
14. Default and remedies;
15. Reporting requirements, as required
				  pursuant to
				  N.J.S.A.
				  52:27D-489f, and other reporting requirements
				  that may be required by law or agreement, such as an annual report and an
				  annual tax clearance certificate issued by the Division of Taxation pursuant to
				  P.L.
				  2007, c. 200
				  (N.J.S.A.
				  52:39-1 et seq.);
16. Requirement to demonstrate that the
				  project continues to be eligible for any increase of reimbursement pursuant to
				  N.J.A.C. 19:31D-1.7(e); and
17. To
				  the extent the project consists of newly constructed residential units, the
				  approval letter will require that the project will be monitored for purposes at
				  N.J.A.C. 19:31D-1.3 in order to maintain the affordable units for the term of
				  the grant by an administrative agent as defined at
				  N.J.A.C.
				  5:80-26.2.