N.J. entices developers with loans, tax credits to remake brownfield sites
Whole cost of remediation will not be covered
She said the program is intended to fill funding gaps rather than pay the whole cost of remediation, and so the $15 million is expected to be widely shared.
“Since the program is intended to fill financing gaps and not fund entire redevelopment projects, we believe the $15 million allocation will be sufficient to catalyze a high number of projects, but we do not have a specific target number of projects we expect to receive financing through the program,” Limbrick said. “We may increase funding for the program in future years if there is significant interest.”
Max Popkin, director of Hamilton-based Modern Recycled Spaces, which redevelops old industrial buildings, said almost every former industrial site that his company has considered is contaminated.
He has not previously used New Jersey’s loan or grant programs but said he may use the new programs to help with a new brownfield project that otherwise might not be possible.
“When looking at a new project you must budget a significant amount of time and money for both environmental consultants and lawyers to make you feel comfortable to move forward with the acquisition of the site,” Popkin said. “These costs make smaller deals tougher to pursue and harder to justify these pre-acquisition costs, which can be a significant percentage of the purchase price.”
Investors can be hard to find
The new programs will allow redevelopment of sites where it would be hard to find investors, Popkin said.
“Since it’s very difficult to get either lenders or investors to put up what we would call ‘good news money’ … this program will go far to assist in expediting and making these types of deals make it to the finish line,” Popkin said.
The company’s projects include Mill One, a 19th-century shirt factory in Hamilton near Trenton that it has redeveloped in cooperation with Isles, a nonprofit. The repurposed building will accommodate other nonprofits and artists as well as commercial tenants.
The Brownfields Loan Program offers low-interest financing of $100,000 to $5 million for all aspects of brownfields revitalization projects. Loans will be awarded through a competitive application process, with projects receiving scores based on the nature of the site and the redevelopment project. Projects that provide beneficial end uses that promote environmental resiliency, public health, and community well-being will receive higher scores and may also qualify for interest rate reductions if approved for financing, the EDA said. Companies can apply to the new loan program until April 13.