New Jersey has 5 million square feet of industrial space under construction — and more than half of it is being driven by state incentive programs, according to new research from the brokerage firm Jones Lang LaSalle.
The statistic is proof that such programs are helping spur economic activity, but it's also a sign that delays in an effort to overhaul those incentives are causing developers to hold back on new projects.
In its second-quarter industrial outlook, JLL said "developers and landholders at the port and nearby submarkets may be in a 'wait and see' mode" — while the overhaul is debated in Trenton — as speculative projects remain available "despite considerable interest from prospective tenants."
Known as the Economic Opportunity Act, the legislation has faced delays since the spring, as sponsors wrangle over special provisions and safeguards for new business and development incentives.
The bill would consolidate five incentives into two and loosen the geographic restrictions of the current programs, while implementing a broad series of bonus criteria to expand the size of awards.
Lawmakers have said they hope to conclude negotiations later this month and send the bill to Gov. Chris Christie's desk, following the Legislature's summer recess.
In its report, JLL found 2.88 million square feet of construction activity in northern and central New Jersey "was at least partially incentives driven," accounting for about 57 percent of the total in those regions during the second quarter. Major projects in recent months include Prologis Inc.'s 900,000-square-foot distribution center in Jersey City, whose tenants were awarded tax credits under the Urban Transit Hub and Grow New Jersey programs.
Reporter Joshua Burd is @JoshBurdNJ on Twitter.