The Aspire Tax Credit Program (Aspire), administered by the New Jersey Economic Development Authority (NJEDA), is New Jersey’s main developer-focused incentive program, designed to spur residential and commercial development through the provision of tax credits. Established under the Economic Recovery Act of 2020, the program has quickly become an important tool for real estate developers, with the NJEDA having approved over $2,600,000,000 in tax credits for 26 development projects in municipalities across state.

Despite the program's success and broad applicability, many developers mistakenly believe their developments do not qualify. While all projects must show a financial need and adhere to the program's requirements, including prevailing wage and affordability standards, the constraints related to geography, project size, and use are far less restrictive than many developers assume.

Beyond the City Limits

A common misconception is that Aspire was designed just for urban centers like Newark and Jersey City. However, the program applies to projects throughout state, with Aspire-eligible sites located in nearly every county. Morristown, Bayonne, Sayreville, Woodbridge, Camden, Hoboken, Fort Monmouth, Newark, New Brunswick, Somers Point, Trenton, Union City, Washington Township, and West Deptford, have all been home to approved Aspire projects.

Both Urban and Suburban areas, as defined by the New Jersey State Development and Redevelopment Plan (SDRP), are Aspire-eligible, as well as:

• Aviation Districts
• Port Districts
• Designated Centers identified by the SDRP
• Brownfield sites as defined by the "Brownfield and Contaminated Site Remediation Act"
• Certain other sites with significant environmental remediation costs

Special Mission Non-Profit and some film-related projects are not subject to any geographic restrictions.

Not Just Residential

Although the Aspire program has been a successful gap financing tool for residential projects, it can also fund commercial projects, including office, retail, industrial, film, healthcare and some warehouse and distribution uses. The NJEDA has awarded Aspire tax credits to various commercial and mixed-use projects, including:

• $271,186,902 to Helix Phase I, a 12-story, 573,400-square-foot office building in downtown New Brunswick.
• $199,960,465 to the latest NJPAC development, including 577,900 square feet of mixed-used space, including residential, office, retail, office, educational and performance uses.
• $113,651,245 to a mixed-use project in Woodbridge, including a 244,524 square feet corporate and medical office space.
• $387,000,000 to Netflix for their new 1,000,000 square feet studio campus in Fort Monmouth.
• $21,794,281 to the South Ward Wellness Center, a new 46,413 square foot health services center in Newark.

Smaller Projects Qualify

Aspire is not only for largescale projects. Although the program has awarded tax credits to several large transformative developments, projects as small as $5,000,000 are eligible.

Residential and healthcare services development must meet minimum costs thresholds:

• $17,500,000 in a municipality with a population greater than 200,000 (Jersey City and Newark)
• $10,000,000 in other municipalities
• $5,000,000 in a qualified incentive tract or government-restricted municipality (GRM)

The original three GRMs were Atlantic City, Paterson and Trenton, with New Brunswick, Camden and East Orange added in the latest amendment to the program.

Commercial projects must similarly reach a minimum square footage threshold:

• 25,000 square feet in a GRM
• 50,000 square feet in other eligible locations
• 10,000 square feet if a health care or health services center

A Program Every Developer Should Explore

Aspire is a widely applicable program designed to close financing gaps for residential and commercials projects throughout New Jersey. While it may not be the right fit for every project, developers may be leaving money on the table by not performing due diligence related to Aspire as part of the development process.

The Tax Credit & Incentives team at Murphy Schiller & Wilkes LLP (MSW) can assist. Please feel free to reach out to us with any questions.

Chris J. Murphy, Partner
Chair, Tax Credits & Incentives
Phone: (973) 705-7421
Email: cmurphy@murphyllp.com

Brendan Pytka
Director of Tax Credits & Incentives
Phone: (862) 418-3702
Email: bpytka@murphyllp.com