Redeveloping brownfields has long been an important, but challenging process across the country, requiring both federal and state support. The state of New Jersey has steadily worked to bridge the gap available to developers and community leaders to pay the cost of remediation.
The latest step is the Brownfields Loan Program and other recently launched New Jersey Economic Development Authority (NJEDA) incentives, which have potential to transform contaminated New Jersey sites and return sites from our state’s industrial past to the public good.
- Eligible services include—for the first time—site investigation, demolition, asbestos and PCB removal, and lead-based paint remediation.
- The NJEDA has $15 million allocated to this program for 2021 for loan amounts from $100,000 to $5 million.
- Interest rates for the 10-year term loans will range from 2-3%.
- Payment terms— no payment for the first two years and interest only payments in years 3 and 4—are especially helpful during the early, high-cost years of the project.
- Full repayment of the loan is due at the end of the 10-year loan or upon the applicant’s closing of construction financing, whichever comes first.
- Loan fees include a non-refundable $2,500 application fee as well as commitment and closing fees, respectively, of 0.875% of the loan amount.
- Conditions of the loan include a lien on the property (removed upon repayment); a 10-year deed restriction requiring redevelopment use to be as was described in application; the incorporation of prevailing wage and affirmative action requirements during remediation as well as redevelopment activities (including by subcontractors); and more.
- Eligibility requirements are many and include among others: a letter of support from Mayor or governing body; a redevelopment plan, include re-use that must include commercial or mixed-use; an environmental report by an LSRP; demonstration of the project’s economic feasibility and proof of an existing funding gap for it.
- Funding will be prioritized based on application scores as well as an underwriting analysis.
- Applications will be competitively scored against NJEDA criteria. The most heavily weighted scoring category is project viability (including successful track record of applicant and key team members) and financing need. Other key scoring categories include the economic distress of the site, the economic benefits of the redevelopment, the public health and environmental benefits, and several other categories.
- Questions regarding the program will be accepted by email ONLY to email@example.com by March 25, 2021 at 5 pm.
- Applications will be accepted through April 13, 2021.
In addition, The Brownfields Redevelopment Incentive program is part of the “New Jersey Economic Recovery Act of 2020,” designed to restore key brownfields sites to productive use.
- Provides a maximum one-time tax credit of $4 million towards remediation of a brownfield site. This is one of nine incentive programs rolled out in the Act. Others include the Food Desert Relief Incentive Program and the Main Street Recovery Fund.
- Only one of the nine incentives can be used for a single redevelopment, however the tax credit can be combined with NJEDA brownfield loan and HDSRF programs.
For more information on these programs, visit njeda.gov.