McGuiness adds that NJ-NAIOP would like to see the bonding requirement as well as the holdback provision removed. He says the disclosure obligations should be consistent with a bill that was introduced last year--but never voted on--that would have stipulated filing of financial reports by businesses receiving more than $25 million from public entities.

The stimulus package, meanwhile, is viewed as essential in the state's effort to spur development and job growth and attract and retain businesses. Among the bill's provisions are the Economic Redevelopment Growth Grant and changes to the Urban Transit Hub Tax Credit programs, both of which were suggested by the New Jersey Smart Growth Economic Development Coalition, a group made up of leading Garden State real estate executives.

Under the ERGG program, which is the state's version of tax increment financing, projects within certain areas of the state can obtain up to 20% of the development's cost from public funds. The developer is required to put in a minimum of 20% equity, with the remainder of the project's cost funded from other sources. No more than 75% of the incremental increases in state and local revenues derived from the project can go toward the payout, which could extend for up to 20 years.

Critics of the ERRG program in particular and the stimulus bill in general contend it would divert tax revenues for much-needed public services, like schools and healthcare, to developers. "The stimulus bill was rushed through the legislature in two weeks, so the legislators don't know its true cost," says Sarah Stecker, policy analyst with Trenton-based New Jersey Policy Perspective. "Given that we are in a terrible economy, the state shouldn't be giving away big subsidies to developers." NJPP also objects to the 20-year payout for ERRG and the lack of oversight it sees in the bill.

As for the anit-EnCap bill, Stecker says it sets reasonable requirements on developers in light of that project's collapse. She terms the bond "an insurance policy for the state."Speaking at the NJ-NAIOP program here last week, Caren Franzini, CEO of the New Jersey Economic Development Authority, countered the ERRG program will entail a stringent and transparent financial review process. For example, not every proposed project will get 20% of its overall cost from public funds. Instead, it may only get 10% or 5%. She added that the NJEDA has hired an outside firm, Jones Lang LaSalle, to devise the application template. In that way, the agency does not have the discretion to award one developer the maximum amount of the grant and another less than that.Moreover, the NJEDA expects a return on its investment in any project. "If we are putting in, say, a total of $10 million, we need to get more than $10 million back," she said.

Franzini further noted that a developer receives no funds until a project is up and running. "This is not [a] state giveaway," she stated. "This is a payment for something that has been completed and now we are seeing new incremental revenues."

Applications for ERRG projects are not being taken for 90 days, giving the NJEDA time to formulate regulations for the program, Franzini said. Another provision in the bill is a revision of the Urban Transit Hub Tax Credit, which gives building owners and tenants tax breaks if they locate around transit hubs in nine cities--Jersey City, Hoboken, Newark, Elizabeth, Paterson, East Orange, New Brunswick, Trenton and Camden.In its latest version, UTHTC lowers the minimum required capital investment in a business facility from $75 million to $50 million. In another change, businesses are permitted to sell their tax credits. The minimum requirement of 250 employees remains the same.

Ted Zangari, a Newark-based redevelopment law attorney with Sills Cummis & Gross who started the New Jersey Smart Growth Economic Development Coalition, also spoke at the NJ-NAIOP event. He admitted the UTHTC program is lucrative and for a reason. "We are in the fight of our lives for jobs and if other states are going to offer incentives we have to one-up them."

Zangari also refuted the notion that the bill does not have regulatory teeth, suggesting that critics fail to see the nuances of the law. For example, if a business falls below the requirement to maintain 250 jobs, the tax break is nullified. "A lot of the protections are covered in the legislation as enacted," Zangari stated. Franzini reported that the authority intends to have the new UTHTC regulations in place by its board meeting in September.

Proponents of the stimulus bill argue that dedicating a portion of tax revenues from a property to a developer is better than receiving nothing from fallow ground. "These projects aren't going to be built without that gap financing," Lesniak stated. "If they are not built, the state gets no revenue."

Conversely, Stecker says that businesses are not swayed solely by incentives. Rather, they take into account other factors, such as skilled labor.

Whether an advocate or critic of the stimulus bill, nearly all agree the state is in a prolonged downturn, one that even the act cannot cure by itself. However, McGuiness says that several stalled projects may get the nudge needed to bring them to fruition as a result of the stimulus act. "It will be less risky for those projects to move forward," he says. "Certainly within the next 12 months, you are going to see a lot more happening."

To see how your local legislator voted on the stimulus act and the EnCap bill, go tohttp://www.njleg.state.nj.us/bills/bills0001.asp. Search by bill number--for EnCap, A2650, and stimulus act, A4048.