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Bill may put residential projects on the fast track

8 developments in N.J. cities could get another chance at tax credits

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    Ron Beit says he expects his residential project at Newark's Four Corners to get a tax credit from the EDA.
    Ron Beit says he expects his residential project at Newark's Four Corners to get a tax credit from the EDA. - (FILE PHOTO)

    Newark's pipeline for housing construction might be growing deeper by the month, but with New Jersey's development incentives in limbo, at least four of the city's most transformative projects are at a crossroads.

    The projects, which include more than 1,400 residential units, were among eight that were turned down for Urban Transit Hub tax credits after a competitive selection late last year by the Economic Development Authority. The process resulted in the agency exhausting the program's final $100 million set-aside for such mixed-use projects in April, with awards going to two projects in Jersey City and one in New Brunswick.

    But the eight remaining developments may still find the help they seek, despite pending bills that would eliminate the lucrative transit hub subsidy in favor of more streamlined incentives.

    The Assembly version of the Economic Opportunity Act, which the lower house passed May 20, would allow the EDA to approve and finance the projects that applied under the recent selection process. And the eight developers would not have to reapply, provided the EDA makes the awards within 90 days of the bill becoming law.

    The legislation represents an overhaul to the state's economic incentive programs that aims to put more emphasis on job creation than on capital investment, while making grant money available to a broader swath of the state. But there are no complaints among Newark stakeholders like RBH Group executive Ron Beit, whose firm is the lead developer for a $400 million, 600-unit plan to revive the city's historic Four Corners district at Broad and Market streets.

    "We are encouraged by progress we see in the state Legislature, and we remain optimistic that EDA will approve a tax credit for Four Corners in the relatively near future," Beit said in an e-mailed statement to NJBIZ. Beit, who also is leading the Teachers Village project near the downtown, said the Four Corners project is moving forward, having made recent progress in securing financing commitments.

    Assemblyman Albert Coutinho (D-Newark), the lead sponsor of the bill in his chamber, said the provision is a fair answer to the question of how to address any remaining Urban Transit Hub applications, especially those that the EDA "felt were worthwhile." He said the projects could seek comparable awards under the proposed new framework, but said the state is "simply trying to accelerate these projects and get them in the ground faster, if they're eligible."

    "It was a philosophical decision on the phase-out of Urban Transit Hub," Coutinho said.

    Such a discussion has "been on the drawing board for basically the last five months or so," well before the introduction of the new bill in January, he said. He also said lawmakers last year discussed raising the state's cap on Urban Transit Hub tax credits by $750 million to satisfy remaining projects, but the idea was later scrapped.

    Adam Zipkin, Newark's deputy mayor for economic and housing development, said it was "critical for the (city's) continued redevelopment for this new incentive legislation to quickly become law."

    Adam Zipkin overlooking Newark’s business district. The incentives legislation is critical for the city to keep its momentum, he says.

    The bill still needs to pass the full Senate, where a number of changes have been considered over the past few months. Gov. Chris Christie already has indicated he will sign the bill when it gets to his desk.

    E-mail to: joshb@njbiz.com
    On Twitter: @joshburdnj

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    Joshua Burd

    Joshua Burd

    Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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