Garden State Growth Zones Under The Economic Opportunity Act of 2013
The New Jersey Economic Opportunity Act of 2013, signed into law in September 2013, provides significant bonus incentives. The most generous of the incentives are reserved for four (4) municipalities defined as within the Garden State Growth Zone (currently designated as Camden, Trenton, Paterson and Passaic). The Act provides significant bonus incentives for companies and developers to relocate and develop within those municipalities.
In addition to the award of tax credits under the ERG of up to forty percent (40%) of the eligible project costs (a twenty percent (20%) bonus over other eligible areas), the Act also provides a unique long term tax exemption for qualified developers and projects within a Garden State Growth Zone and permits local municipal approval of a twenty (20) year long term tax exemption on the value of the new improvements for the first ten (10) years after issuance of a certificate of occupancy and thereafter a reduced payment in lieu of taxes on the value of the improvements for years ten (10) through twenty (20) based on a sliding scale percentage of taxes otherwise due on the value of the improvements.
The Act also makes available a unique five (5) year tax exemption for qualifying projects within Garden State Growth Zones for those redevelopers that do not otherwise qualify as a Garden State Growth Zone Development Entity (similar to an urban renewal entity as defined under the New Jersey Long Term Tax Exemption Law). The Act attempts to address the constitutional requirements for both the long term tax exemption and five year abatement by the legislature finding that municipalities identified as Garden State Growth Zones are “hereby declared blighted areas and areas in need of rehabilitation.”