Stimulus Act Is Law, 'Anti-Encap' Bill Up Next

EDISON, NJ-The state’s commercial real estate industry scored a major victory when Gov. Jon Corzine signed the Economic Stimulus Act of 2009 last week. Now, the question is whether he will also sign the so-called anti-EnCap bill, a measure many in the industry say could undo the benefits contained in the stimulus legislation.

At an NJ-NAIOP-sponsored legislative update held here last week, State Sen. Raymond J. Lesniak (D-Union), the sponsor of the stimulus bill, told the crowd that the governor was not going to sign the anti-EnCap bill without amendments. “It’s not going to affect all the good stuff we’ve done,” he stated. Repeated calls to the governor’s office about the status of the EnCap bill were not returned by deadline.

Passed in June, the bill sets parameters for contracts between private firms and public entities. It requires that a business receiving $50 million or more in public assistance for a project post a performance bond equal to at least 110% of the publicly funded improvements associated with the venture; and annually file audited financial statements for the project as well as the business entity itself. Further, the public agency would retain up to 10% of the amount of the funding it doles out until the project is finished and has the right to review the project’s subcontractors. Also included in the legislation is a mandate that for every $5 that comes from a public entity, at least $1 of the total project cost must come from other sources.