The original item was published from January 6, 2021 1:36 PM to January 7, 2021 1:43 PM
The “Historic Property Reinvestment Act” provides tax credits for part of the cost of rehabilitating historic properties in this State.
Some pertinent terms defined in the bill include:
“Project financing gap” Part of the total cost of rehabilitation, including reasonable and appropriate return on investment, that remains to be financed after all other sources of capital have been accounted for, including, but not limited to:
- Developer contributed capital, not less than 20% of the total cost of rehabilitation.
- Investor or financial entity capital or loans that the developer, after making all good faith efforts to raise additional capital, certifies cannot be raised from other sources.
"Property" A structure, including its site improvements and landscape features, assessed as real property, and used for:
- A commercial purpose.
- A residential rental purpose, provided the structure contains atleast four dwelling units.
- Any combination thereof.
"Qualified property" A property located in the State of New Jersey that is an income-producing property, and that is:
- Individually listed or located in a district listed on the National Register of Historic Places or New Jersey Register of Historic Places. Or individually designated or located in a district designated by the Pinelands Commission as a historic resource of significance to the region in accordance with the Pinelands comprehensive management plan.
- Individually identified or registered, or located in a district composed of properties identified or registered, for protection as significant historic resources in accordance with criteria established by a municipality in which the property or district is located. These must meet the criteria for identification or registration has been approved by the State Historic Preservation Officer as suitable for substantially achieving the purpose of preserving and rehabilitating buildings of historic significance within the jurisdiction of the municipality. If located within a district, certified by the State Historic Preservation Officer as contributing to the historic significance of the district.
“Transformative project” A property that is an income-producing property, not including a residential property, whose rehabilitation the authority determines will generate substantial increases in State revenues through the creation of increased business activity within the surrounding area. Also, individually listed on the New Jersey Register of Historic Places prior to this bill received a Determination of Eligibility from the Keeper of the National Register of Historic Places. Located within a one-half mile radius of the center point of a transit village, as designated by the New Jersey Department of Transportation; and located within a city with a population more than 150,000.
Each worker employed to perform construction work at the qualified property or transformative project would be paid at least the rate established under the Prevailing Wage Act. This requirement applies during the selected rehabilitation period. If the project, or the aggregate of all projects awarded under the program, constitute a lease of more than 35% of the facility, the prevailing wage requirement applies to the entire facility.
A rehabilitation project is eligible for a tax credit only if the business entity demonstrates to Economic Development Agency (EDA) at the time of application that without the tax credit, the rehabilitation project is not economically feasible and a project financing gap exists.
A business entity may claim a credit for a period of 24 months in which it makes the final payment for the cost of the rehabilitation of the business entity, or a period of 60 months in which a distinct project phase of the rehabilitation is completed.
EDA is given rulemaking authority, which includes, but is not limited to:
- Establishing administrative fees,
- Setting an annual application submission date,
- Requiring annual reporting by each business entity that receive a tax,
- Requiring those reports to include certifications by the Department of Labor and Workforce Development, the Department of Environmental Protection, and the Department of the Treasury that the business entity, and any contractors or subcontractors performing work at the property or project, are in good standing with the respective department. Or the business has entered into an agreement with the respective department that includes a practical corrective action plan.
The rules must also include a provision requiring that business entities forfeit all tax credits awarded in any year that any such report is not received and to allow the authority to extend in individual cases the deadline for any annual reporting or certification requirement established by this legislation.
Contact: Lori Buckelew, Assistant Executive Director, lbuckelew@njlm.org, 609-695-3481, x112