Tim Sullivan, CEO of the New Jersey Economic Development Authority
TRENTON, NJ—The New Jersey Economic Development Authority has created a new Brownfields Loan Program to provide low-interest financing to facilitate remediation of vacant or underutilized brownfields sites, paving the way for these sites to be revitalized and put back to productive use. The program is part of Governor Phil Murphy's efforts to drive targeted investments in underserved communities.
“Investing in communities is a pillar of our plan for a stronger and fairer New Jersey economy, and the brownfields loan program is a crucial tool we can use to build cleaner, safer communities where businesses and families can thrive,” says Governor Murphy. “Cleaning up contaminated sites and repurposing them for productive use allows us to achieve our goals for economic growth while protecting our environment and minimizing sprawl.”
The expanded brownfields loan program will provide low-interest bridge financing to make the remediation phase of a project financially viable. The program will make financing of up to $5 million available to potential brownfield site purchasers and current brownfield site owners to cover the costs associated with site investigation, assessment and remediation, and building and structural issues such as demolition and asbestos removal. While the brownfields loan will only finance the remediation aspect of the project, all projects must include a redevelopment plan for the reuse of the remediated site.
“Transforming contaminated sites into productive projects that enhance the areas where they are located is one of the most effective investments we can make in New Jersey's communities,” says NJEDA chief executive officer Tim Sullivan. “The brownfields loan program and proposed remediation and revitalization tax credit will play a crucial role in getting these projects off the ground and bringing new life to communities around the state.”
To be eligible for funding, the NJEDA will conduct an analysis of the project application to determine if the project is economically feasible or if a funding gap exists. The remediated property must also have an appraised value of at least 100 percent of all debt financing (including the proposed brownfields loan), and the project must submit an environmental report from a licensed site remediation professional or other qualified professional to verify that contamination exists on the site. Projects must also demonstrate local support through a letter of support from the mayor of the municipality in which the project is located.
Funding will be made available through competitive application rounds, and projects that meet this base eligibility will then be scored by NJEDA staff according to various details about the brownfields site and/or proposed redevelopment project. This will include the site location, the length of time the site has been vacant or underutilized, and alignment of the redevelopment project to local redevelopment plans. Priority of funding within a competitive round will be determined by highest overall scores, and all projects must meet a minimum score in order to be considered for funding.
The standard interest rate for projects that meet these baseline eligibility requirements will be fixed at three percent. However, the NJEDA will review proposed redevelopment plans and may apply interest rate reductions if the redevelopment project supports certain community development goals, including mixed-use residential development with an affordable housing component, food delivery sources in urban food deserts, primary health care services, tourism destination projects, electric vehicle charging stations, smart growth parking (convertible to commercial space), and incubators and collaborative workspaces.
Applications for the Brownfields Loan Program will be available in the coming months.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Steve Lubetkin
Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].
