June 26, 2024

New Jersey Emerging Developers Grant Program: A Financial Boost for New Jersey’s Real Estate Developers

By Barry Halpern, Partner, Tax & Business Services

New Jersey Emerging Developers Grant Program: A Financial Boost for New Jersey’s Real Estate Developers State & Local Tax

The “Emerging Developers Grant Program” is now open for applications. This newly established $20 million pilot program offers formidable financial incentives for both for-profit and non-profit developers. It is designed to bolster smaller-scale developers and inject vibrancy into New Jersey’s real estate sector.

Grant Program Highlights

  1. Grant Funding: Up to $200,000 for pre-development costs, potentially reaching $250,000 with the Opportunity Zone Bonus.
  2. Opportunity Zone Bonus: An additional $50,000 is available for projects in Designated Opportunity Zones or Government Restricted Municipalities (GRM).
  3. Soft Cost Coverage: The program reimburses up to 50% of eligible pre-development soft costs, easing the financial burden during the critical planning phase.
  4. Eligibility: Exclusively for developers with a lean team of at most five full-time employees.
  5. Site Control: Applicants must demonstrate at least 51% ownership of the project site with evidence provided by a deed.
  6. Project Types: The grant supports commercial or mixed-use development projects, excluding residential-only projects from eligibility.
  7. Good Standing Requirement: Developers must be in good standing with New Jersey state departments and possess a current Tax Clearance certificate to participate.
  8. Application Fee: A non-refundable application fee of $1,000 is charged, signifying the commitment to proceed upon submission.

Additional Requirements

  • Developers need to have a track record of at least two (2) but no more than five (5) completed projects.
  • Construction must not have commenced on the project site.

Expanded Soft Cost Coverage

Soft costs may include:

  • Architectural and Design Fees
  • Construction Drawings and Specifications
  • Engineering Fees and Surveys
  • Municipal Zoning and Inspection Fees
  • Insurance Costs
  • Professional, Legal, and Accounting Fees
  • Project Management Fees
  • Market/Feasibility Studies
  • Appraisal Expenses
  • Phase I Environmental Reviews
  • Current Property Taxes
  • Loan Interest Payments (if applicable)
  • Utilities

Costs related to site or property purchase and construction expenses are not eligible for reimbursement within this program.

This opportunity presents an excellent platform for qualified developers to leverage state funds to kick-start or advance their development projects. Focusing on fueling the growth of new talents and smaller-scale developers, the Emerging Developers Grant Program is aligned with the strategic goal of diversifying and invigorating New Jersey’s real estate landscape.

Applications are being accepted on a rolling basis, but note that funds are limited and will be distributed until they are depleted. It is imperative for interested parties to act promptly to capitalize on this. For additional information regarding New Jersey incentive opportunities and its impact on your business or other state business credits and incentives opportunities, contact Barry Halpern at [email protected], or your Marcum State and Local Credits and Incentives professional.