NJ Offers $500,000 in Grants to Towns For Best Opportunity Zone 'Game Plans'

New Jersey, looking to jump start municipalities into actively encouraging development in their federal Opportunity Zones, will be offering $500,000 in grants to towns that come up with the best strategies, Gov. Phil Murphy said Monday.

Murphy unveiled the grant plan at an Opportunity Zone Summit that was held by Choose New Jersey, a privately funded economic development group, in New Brunswick, New Jersey. State economic officials have held several such gatherings in order to educate local officials about Opportunity Zones and help them "put their best foot forward as they compete for investment dollars on a national scale,” according to the governor.

"God knows there's lots of communities that want to develop these tracts," Murphy said. "And God knows there's a lot of capital. But getting that right ... is really going to be important."

The Opportunity Zone program was established as part of the Tax Cuts and Jobs Act of 2017. The goal is to drive long-term private capital investment in designated low-income urban and rural communities by providing investors -- including real estate developers -- tax breaks on capital gains. The Garden State has 169 opportunity zones in 75 municipalities.

“The opportunity to defer capital gains or ultimately expunge them completely if you hold them long enough is a big deal," Murphy said at the summit. "I am sure that the investors who are here today, they are here are because of that. This is a huge opportunity.”

The governor then announced the state is starting "a competitive grant process" that would award $100,000 each to the five communities, for a total of $500,000, that "come up with the best game plan for how they would tackle their opportunity zones." New Jersey is a home rule state, with each of its more than 500 municipalities in charge of approving development plans within their borders -- something that sparks complaints from some real estate firms, who say they are hampered by the delays caused by the red tape and dealing with local officials. The potential of getting a $100,000 grant is meant to encourage the 75 towns and cities with opportunity zones to focus on laying out possible projects, and outlining their priorities, for development in them, according to Murphy.

"I think it will have the added benefit of the communities thinking earlier than they might otherwise would have on, 'How do you see this? Is this an affordable housing opportunity? Is it commercial retail? Is it businesses that we want to attract?'" Murphy said. "Or is it some sophisticated plan to stack incentives, the federal piece with the various state pieces that we’re generating for the next generation?"

Later Monday, the state Economic Development Authority issued a press release referencing the plan Murphy had mentioned, which it called the New Jersey Opportunity Zone Challenge. The EDA said it will issue a request-for-proposals this spring.

The summit attracted more than 300 business leaders, state officials, real estate developers, investors and the mayors of several cities, including Perth Amboy Mayor Wilda Diaz. Opportunity Zones make up 51 percent of her city, according to Diaz, who said she plans to compete for one of the $100,000 grants.

Plainfield Mayor Adrian Mapp was a speaker at one of the summit's panels, and he said municipalities "can make a difference by streamlining the process" and expediting approvals for opportunity zone projects.

"We must be willing and able to work with investors," Mapp said.

At the summit Murphy mentioned that earlier in the day he had been in South Amboy, New Jersey, to talk about his proposed brownfields-redevelopment tax credit program, which is one prong of his overall plan for incentive reform. The state's current brownfields program is co-administered by the state EDA, the Department of Environmental Protection and the Division of Taxation, with $14.8 million appropriated for a brownfield-site reimbursement fund for fiscal 2019.

"Under Murphy’s proposed legislation, appropriated funds would be phased out and replaced by competitive grant opportunities administered by the EDA and DEP," according to a statement from the governor's office.
www.omegare.com