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Act II: A second round of incentives introduced

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Sen. Lesniak, the bill's sponsor, feels Act II has bipartisan support.
Sen. Lesniak, the bill's sponsor, feels Act II has bipartisan support. - ()

State Sen. Raymond Lesniak (D-Union) doesn't hold back when he's asked if Republican Gov. Chris Christie will be running for president in 2016.

“It's obvious that he is,” Lesniak — and just about everyone else — says.

And Lesniak says if Christie wants to boost his White House credentials, he needs to do more to create jobs and address affordable housing needs in the state. One way to start, Lesniak says, is by giving his blessing on the Economic Opportunity Act II, a new round of business incentives Lesniak is sponsoring.

"I do expect bipartisan support because we still lag behind the region and nation in job creation," Lesniak said.

The latest package of incentives is follow-up legislation to the much-heralded Economic Opportunity Act of 2013, which Christie signed into law in September.

The Act II bill was introduced Thursday before the Senate Economic Growth Committee and features both new elements and some previously removed from the original act through a conditional veto issued by Christie.

The package includes five key elements:

  • AFFORDABLE HOUSING SET-ASIDE: A relaxation of a requirement that a developer set aside 20 percent of new residential units for low- or moderate-income homes, instead granting municipalities the ability to determine what percentage of newly-constructed units are to be reserved for those income levels.

Lesniak says this speaks straight to some of the state's poorer, urban communities, where he says the mandatory set-aside has been a "disincentive to produce any housing in those areas." It is a provision Lesniak had originally fought to embed in the first incentives bill, but declined to press for due to concern of stalling the legislation further.

  • FILM: Coined as the "Garden State Film and Digital Media Jobs Act," a section that includes an increase of the annual program cap from $10 million to $50 million for film production tax credits and an increase from $5 million to $10 million in credits for digital media productions. The act will also up the current 20 percent tax credit limit on eligible production expenses to 22 percent if those purchases are made in businesses located in one of the state's Urban Enterprise Zones.

In support of the act, Jersey City Mayor Steven Fulop testified before the Senate panel last week, stressing that expanding the state's film industry incentives would not only benefit his city, but be a job creator statewide. Both Fulop and Lesniak say it's a necessary step in ensuring that industry jobs have a home in New Jersey, as opposed to New York, where similar incentives also are readily available.

In 2011, Christie vetoed a similar film incentives bill that Democrats unsuccessfully attempted to override.

  • AFFORDABLE HOUSING REDEVELOPMENT: Additional tax credits of $200 million for the redevelopment or rehabilitation of supportive, special needs, very low-income, low-income or moderate housing. The credits would only apply in cases when 100 percent of the redeveloped units are then made available as affordable housing units. As currently written, priority would be given to applications for qualified projects in Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union counties.

"There's a great need for these redevelopments," Lesniak said.

The tax credits would provide incentives to redevelop and transform unsafe, crime-ridden high-rise buildings in a similar way that federal funding once provided for through programs such as HOPE VI. The state must act, Lesniak says, because there's no use in waiting around for Washington.

"That federal money is gone and it's not coming back," Lesniak said.

  • HEALTH CARE FACILITIES: Tax credits for the repurposing of former health care facilities as non-acute health care and health services support centers. If approval from the EDA is granted, qualified projects would be allowed tax credits of 50 percent of their capital investments.

Cut out from the original legislation by Christie's veto, the tax incentive for this purpose has been slightly scaled back, something that Lesniak hopes will get it through this time.

"They have been the white elephant and are virtually abandoned properties now," Lesniak said of the facilities.

  • APPEAL BONDS: An extension of a $50 million limit on the total amount of appeal bonds to all appellants in a civil action, but with the understanding that a court may increase or decrease that amount given special circumstances.

It's too early to tell right now whether this round of incentives will face the same bumpy road that its predecessor did, says New Jersey Chamber of Commerce Senior Vice President of Government Relations Michael Egenton.

But there is incentive to work speedily, he says, noting that as a result of the long process of passing the original bill, "we probably suffered a little bit from that."

Egenton said he's unsure how these new incentives will play out, especially with budgetary limitations still undefined. Regardless, he doesn't see stringent party lines being an obstruction to the discussion.

"Everybody across both sides of the aisle understands the critical nature of this type of legislation," Egenton said.

E-mail to: andrewg@njbiz.com

On Twitter: @andrgeorge

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