Economic Stimulus Act of 2009

The Legislature and the Governor recently enacted a number of laws designed to minimize the impact of current conditions on New Jersey businesses and residents, including legislation providing incentives to create jobs and make business investments in this State.

The Economic Stimulus Act of 2009 authorizes developers to enter into agreements in qualifying economic redevelopment and growth grant incentive areas which means Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), or a center as designated by the State Planning Commission; a transit village, as determined by the Commissioner of Transportation; and federally owned land approved for closure under a federal Base Realignment Closing Commission action. The redevelopment incentive grant agreement specifies the amount of the incentive grant to be awarded the developer, the frequency of payments, and the length of time, which shall not exceed 20 years, during which that reimbursement shall be granted. In no event shall the combined amount of the reimbursements under redevelopment incentive grant agreements with the State or municipality exceed 20 percent of the total cost of the project, exclusive of publicly-owned infrastructure. Up to 75 percent of the incremental local and state revenues generated and collected from the project  may be pledged towards the incentive grant.

The Act is intended to finance the project financing gap which means the part of the total redevelopment project cost, including return on investment, that remains to be financed after all other sources of capital have been accounted for, including, but not limited to, developer contributed capital, which shall not be less than 20 percent of the total project cost, and investor or financial entity capital or loans for which the developer, after making all good faith efforts to raise additional capital, certifies that additional capital cannot be raised from other sources. This Act is a tremendous incentive to developers in the targeted areas and is similar to laws we have used to help finance major casino expansions in New Jersey.

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