Any one interested in development in New Jersey, urban or otherwise, has to be aware of the Urban Transit Hub Tax Credit program. This is a program initially passed by Gov. Corzine in December of 2007. The simple explanation is that the program provides a 100% tax credit for developers and tenants who make capital investments that meet thresholds set by the state in properties within half a mile from a major rail station in an allowed city. As it was conceived and currently stands these thresholds are $75,000,000 for a business other than the a tenant or a tenant occupying an area that represents $25,000,000 of the improved space. Both must employ 250 people 200 of which need to be new jobs to New Jersey.
The reason I bring this up now is that Bill S-2379 has passed the State Senatey by unanimous vote (37-0) and is now awaits a vote in the State Assembly and ultimately the Governor’s signature to become law (wierd schoolhouse rock flashback there).
The significance of this bill is that it cuts the investment thresholds to $50mm and $17.5mm respectively. The benefit of cutting these thresholds should be very apparent. Even though $75 down to $50 may not seem like a whole heck of a lot but it is very significant. Of course $50 million is not walk around money but it is a threshold that developers, investors and users are more easily able to obtain financing for especially in the current market. Being able to finance these projects is first and foremost because the tax credit recieved over a 10 year period.
The bill also expands the scope of the areas covered. Whereas initially the coverage was a 1/2 mile radius of a New Jersey Transit Corporation, Port Authority Transit Corporation or Port Authority Trans-Hudson Corporation rail station platform area, the proposed change will expand this area to 1 mile from the platform center point. It will also include properties within a half mile ‘radius surrounding the mid point of one of up to two underground light rail stations’ platform areas that are most proximate to an interstate rail station’ (legislators word’s not mine) and property connected to a freight line by rail spur if the property uses the rail spur for loading/unloading.
So, as far as Newark is concerned this proposal would extend the existing boundary of the transit hubs to include all of the Central Business District, and parts of the Ironbound, South Broad Street, University Heights, Springfield/Belmont, Lower Broadway and the industrial areas of the North and South Ironbound.
Other provisions of the bill include expand the areas where the tax credit will apply. The wording in the bill is ‘in which the North Jersey Coast Line, the Northeast Corridor Line, the Morris & Essex Line, the Montclair-Boonton Line, the Main Line, the Bergen County Line, and the Pascack Valley Line of the New Jersey Transit Corporation intersect.‘ Which for you and I means Seacaucus. Unless you can find a spot on the NJ Transit map where any of these train lines intersect otherwise. I didn’t realize that Seacaucus was a center of urbanity along the lines of Trenon, Camden, Jersey City and Newark. Right it’s not. But you know politicians being what they are will bend the rules to satisfy the mob or their pet interests as it may be.
Essentially this expansion of the program will make the vast majority of Newark a development free for all… Now we just have to get past the banking crisis.
For more information on the Transit Hub tax Credit Program check out http://www.nj.gov/njbusiness/financing/tax/geographic.shtml
Also take a look at this presentation that better describes the plan and the proposed changes.
As a follow onto this topic I am working on a post discussing the vacant upper floor space in downtown Newark. I see this as one of if not the number one issue with the revitalization of downtown. The issue with the Urban Transit Hub Tax Credit is that it will focus on big projects and not be available to the hundreds of smaller property owners. It is these properties which have the potential to be more significantly impact the environment in downtown Newark and can be realized in months rather than years. I like to believe that Mayor Booker is aware of this however I am not so sure.