On Wednesday March 12th, New Jersey Economic Development Authority (NJEDA) held its monthly Board meeting in Trenton, NJ. At this meeting, the NJEDA approved incentive awards under the Aspire, Emerge and Historic Property Reinvestment Programs (HPRP), including the following:

• Aspire. Residential project in Woodbridge, NJ
• Aspire. Second phase of the New Jersey Health + Life Science Exchange (“HELIX”) development in New Brunswick
• HPRP. Residential historic rehabilitation development in Atlantic City
• Emerge. Sun Pharmaceuticals Industries associated with a project in Princeton, NJ

In addition, the NJEDA approved the creation of and adoption of rules for the Next New Jersey Program (Next NJ). The Next NJ program is aimed at spurring large-scale investment from AI and AI-related industries, including the AI data center industry, in the State of New Jersey. This $500M program will provide eligible projects with tax credit awards of us to $250M.

Aspire Approvals

The NJEDA Board approved two new Aspire projects at their March meeting. These new projects were located in Woodbridge and New Brunswick, totaling over $120,000,000 in new tax credits.

The second phase ("H2") of the New Jersey Health + Life Science Exchange (“HELIX”) development in New Brunswick was awarded $103,934,885 in tax credits for a project including:

• A 369,749 square foot, 10-story building comprising a research and development facility
• Laboratory environments, environmental chambers, software laboratories, high-bay research spaces, conference spaces, and office environments
• Nokia will lease the entire building for a 20-year term.

A residential project in Woodbridge was awarded approximately $17,377,106 in Aspire tax credits for a project including:

• 3-story new construction residential building
• 60 affordable residential units for seniors with a preference for veterans
• Ground level management office, office space, packing room, and a community room

To date, the NJEDA has awarded over $2,600,000,000 in Aspire tax credits to 28 development projects in municipalities across New Jersey, including Woodbridge, Morristown, Newark, Hoboken, Union City, Bayonne, Trenton, and Camden. The Aspire Tax Credit Program provides tax credits covering between 50-85% of eligible project costs (not to exceed between $60M-$120M) for qualifying projects in eligible locations. Aspire can be used for both residential and commercial developments, and for projects as small as 25,000 – 50,000 square feet for commercial and $5,000,000 – $17,500,000 for residential, depending on location.

HPRP Approval

The NJEDA Board approved one new project under the Historic Property Reinvestment Program, a $10,019,226 tax credit award for a residential project in Atlantic City. The developer will rehabilitate the 5-story historic Atlantic City YMCA Building into 35 residential units, a fitness center, secure package room and resident lounge. The project is estimated to be complete in the second quarter of 2027.

The HPRP is a competitive $50,000,000 annual gap financing tax credit that supports the development of eligible historic properties in qualifying locations in New Jersey. It can be combined with the Federal Historic Tax Credit and covers between 45-60% of eligible costs (not to exceed between $8M-$50M). To date, the Historic Property Reinvestment program has awarded over $60,000,000 in tax credits to 3 projects, including over $40,000,000 to the Loews Theater in Jersey City.

Emerge Approval

The NJEDA Board approved one new award under the Emerge New Jersey (Emerge) tax credit of $5,236,000 to Sun Pharmaceuticals Industries in connection with consolidation of employees in Princeton, NJ.

The Emerge program provides per-job tax credits to projects that invest private capital into New Jersey and create new good-paying jobs or retain a large number of good-paying jobs. Combined with Aspire, the Emerge program has $1,200,000,000 in available funding per year. Since 2021, the EDA has awarded over $135,000,000 to 5 projects in Princeton, Plainsboro, Jersey City, Berkeley Heights and Woodcliff Lakes.

Approved Rules for Next NJ Program

In July 2024, Governor Phil Murphy signed A4558/S342, establishing the Next New Jersey Program (Next NJ), aimed at spurring large-scale investment from AI and AI-related industries, including the AI data center industry, in the State of New Jersey. Under Next NJ, businesses would be eligible for tax credits following the submission (and approval) of an application to the New Jersey Economic Development Authority (NJEDA).

To be eligible for this $500,000,000 program, a project must meet various eligibility criteria, including, among others:

• Create a minimum of 100 new full-time jobs in New Jersey
• Minimum capital investment requirement of $100 million in New Jersey
• The business is primarily engaged in the AI industry or the large-scale AI data center industry
• The business will ensure that at least 80 percent of incented employees’ work time is spent in New Jersey

Eligible projects are entitled to tax credit awards calculated as the lesser of:

• 0.1 percent of the eligible business’s total capital investment multiplied by the number of new full-time jobs
• 25 percent of the eligible business’s total capital investment; or
• $250 million

At their March 12th meeting, the NJEDA approved the creation of this program and adopted their proposed rules. Applications for the Next NJ program are not yet open.

For more information, please contact:

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

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