PATERSON, NJ – The New Jersey state Legislature granted a two-year extension for the city to use its $130 million in economic development tax credits. On Thursday, both houses approved bills to push back the deadline to Dec. 31, 2023 and sent the legislation to Gov. Phil Murphy’s desk.
Assemblywoman Shavonda E. Sumter, one of the bill’s sponsors, said, “This extension was necessary for our projects that were slowed due to the COVID-19 precautions we took early in the year.”
“Paterson and Newark had outstanding projects that required additional time without the extension,” Sumter said.
Without the extension, projects would have needed to be completed by July 2022 in order for developers to receive the tax credits due to terms and conditions previously set by lawmakers.
Senator Nellie Pou, also a bill sponsor in her chamber, said the Economic Redevelopment and Grant Growth Program (ERGG) and Urban Transit Hub Tax Credit Program (UTHTC), both of which are administered by the state Economic Development Authority, “have led to transformative projects in Paterson and around the state that will greatly benefit residents.”
“Unfortunately, the current public health crisis has caused delays in construction and compromised their ability to meet the previously established deadlines for completion,” she said. “This legislation will ensure that they have the time they need to finish the projects in a safe, responsible manner, without the risk of losing their tax credits.”
In Paterson, the state-issued tax credits are key to projects that are part of a larger revitalization effort, including significant improvements in the Great Falls Historic District and at Hinchliffe Stadium.
The redevelopment, Sumter said, are important and “long overdue.”
The project at Great Falls, a $48 million proposal spearheaded by New Brunswick-based Devco, calls for the construction of a 13,000-square-foot visitor center to replace a much smaller one on McBride Avenue, a 270-car parking garage with ground floor commercial space and a 24,000-square-foot community/performing arts center at the corner of Main and Ward streets.
The project is being supported through a combination of $27 million in tax credits issued by the state and fundraising. The New Jersey Community Development Corporation has committed $3 million towards the development of the community center, while the Hamilton Partnership has raised close to $9 million for the visitor’s center.
The scope of work at Hinchliffe Stadium – one of the last remaining Negro League ballparks in the country – includes transforming the stadium into a 7,800-seat venue with a 315-car parking garage, restaurant and museum. The plan also calls for an updated running track and playing surface, as well as a nearby 75-unit apartment building for senior citizens and childcare facility.
Once it’s finished, the stadium will be able to host sports events, concerts, conventions and other entertainment functions and the school district, which owns Hinchcliffe, would be able to reserve use of the space for school-related events.
In June 2019, the city received $130 million in tax credit funding through the state Economic Development Authority.
Besides the improvements at Great Falls and Hinchcliffe, two other projects were identified by the administration to receive tax credits.
Replacing the aging Ward Street parking garage by the train station with a state-of-the-art parking facility that includes retail space.
Redeveloping the “Blue Garage” on Van Houten Street into a newer facility and rehabilitating existing commercial space.
Mayor Andre Sayegh has said the projects will transform Paterson into “a desirable destination for years to come.”
Enhancing the area surrounding the Great Falls district, Sayegh believes, will have “a ripple effect,” that’ll “create interest around the city,” which will spur further economic development and bring jobs.
In an analysis accompanying the Senate and Assembly bills, the state Office of Legislative Services said it believes the coronavirus outbreak may have caused entities wishing to participate in the program to miss key deadlines and “therefore lose access to the tax credits.”
“As a result of this deadline extension, more businesses and developers could qualify for the tax credit awards and more tax credits could be awarded,” the OLS said.
Earlier this year, Charles Florio, a prominent local developer, told TAPInto Paterson it was crucial the state-issued tax credits not go to waste, especially now as banks cross the country have started backing away from construction lending due to an increase in delinquent loans since the pandemic began.
This marks the second time the state has extended the deadline for city officials to take advantage of tax credits for local development projects. In 2018, Murphy signed legislation giving the city another year.
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