While the Economic Opportunity Act is poised to be a game-changer for job growth and capital investment, the developers whose projects attract companies to New Jersey say it's just the beginning. Here are four other pressing priorities:
DEVELOPER WISH LIST
Affordable housing fees
New Jersey in 2011 enacted a second moratorium on a fee for commercial developers, which would have charged them 2.5 percent of their project costs to help fund affordable housing efforts. But the moratorium is scheduled to expire today, reigniting calls for a permanent repeal.
The fee is "a huge disincentive" to the commercial builders and potential tenants who would bear the costs, said Michael Allen Seeve, president of Mountain Development Corp., in Woodland Park. He said companies that require new facilities are committing to make a major investment, "and when you add to the mix a very significant fee that's paid up front, which doesn't exist in any other state, that's a good way to scare people off."
"(The requirement) is a major issue just because it's so discordant," said Seeve, who is New Jersey's chapter president of the NAIOP, the commercial development trade group. "It stands in such stark relief to what's available anywhere else, in a negative way. It certainly doesn't help the state's competitive profile."
The Legislature late last week sent a bill to Gov. Chris Christie that would extend the moratorium through 2016. But it's unclear whether he'll sign it, as it's tied to foreclosure-related legislation he has vetoed in the past.
The flight of tenants from the state's suburban office parks has forced developers to consider adaptive reuse of commercial properties in recent years, but such plans are easily thwarted when skittish municipal governments refuse to get on board.
Robert Kossar, who heads Jones Lang LaSalle's New Jersey offices, said "you do have some municipalities with reasonable concerns" about redeveloping office space into properties with some residential component. For instance, roads may need upgrades and schools may become overcrowded. But often, developers can't persuade zoning boards of the net benefits to the community and economy.
"I think that if some of the municipalities had a more open mind, they would see we're talking about some significant ratable opportunities — and in some project proposals, not a material impact," said Kossar, an executive managing director with the brokerage. "You've got to have an open mind, or we're going to be stuck with these white elephants around the state."
Especially in North Jersey, one of the remaining barriers is "the lack of shovel-ready, large-scale sites to accommodate future growth," said Ted Zangari, a Sills, Cummis & Gross attorney who helped craft the incentives overhaul.
With the proper funding, he said, a state agency can take the lead in that realm by acquiring parcels of land, then packaging them for sale to private developers — with the provision that they build and bring in an employer within a specified time.
"There are few developers out there who have the time, patience or risk tolerance to do land assemblage and clean it up for their own account," Zangari said. "There's just nobody willing to do that."
Such a move would address one of the few remaining recommendations by Zangari's Smart Growth Coalition, which in 2008 issued an outline for economic recovery and was among the most vocal proponents for incentives reform.
The state has an existing network of roads, rail, and air and seaports, but they need upkeep, said Seeve, the NAIOP president, as the system fuels the logistics industry and its many real estate needs. While he acknowledged the high costs of maintenance, New Jersey's network is critical to its success, and "you don't want to give away that advantage, so you have to invest in the transportation system."
"The stronger our transportation system becomes, the more we can really distance ourselves from other markets and really secure the kind of long-term commitments from all companies for their logistics needs," Seeve said.
Politically, this is a difficult sell because the Transportation Trust Fund is tied to the gas tax, which hasn't been increased since 1988. New Jersey's gas tax is among the lowest in the nation.
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