Low Income Areas to Benefit

Economic and community development projects in low-income areas around New Jersey are set to benefit from $125 million in federal tax credits awarded today to the New Jersey Economic Development Authority (EDA) for investment in the state’s distressed cities.

United States Treasury officials announced today that the EDA, through its New Jersey Community Development Entity (NJCDE), will be allocated $125 million through the New Market Tax Credits program. The NJCDE will in turn provide below market loans and investment capital to businesses, and commercial and home ownership projects in low-income areas.

“New Jersey has shown its commitment to its distressed urban communities through programs such as our Urban Enterprise Zones; through One-Stop Career Centers like the one in Newark, which help first-time job seekers and those who want to improve their careers; and through the services we offer that help small businesses and entrepreneurs get started and stay competitive,” Governor James E. McGreevey said. “These new tax credits will serve as a tremendous boost for those communities by encouraging private investments in redevelopment projects.”

“This enormous infusion of federal support should provide a major boost in the arm to the economic development efforts in Trenton and other cities throughout New Jersey,” said U.S. Representative Rush Holt, D-NJ. “I believe that these incentives have great potential to accelerate economic renewal, which will create scores of new jobs and raise the standard of living for the state's urban residents in the years ahead.”

“This new tax credit program represents a significant influx of capital available through the EDA to the businesses and community development projects in the distressed areas in New Jersey,” said Caren Franzini, EDA Chief Executive Officer, noting that the allocation is expected to leverage an additional $300 million in investment in these areas. “These tax incentives can make all the difference by attracting new investment capital to challenging development projects.”

“These funds will further increase Governor McGreevey’s initiative to increase affordable housing throughout the state,” Department of Community Affairs Commissioner Susan Bass Levin said. “To date, under Governor McGreevey’s leadership, the DCA and HMFA (Housing and Mortgage Finance Agency) have financed 17,500 units of affordable housing in 444 communities throughout New jersey – more than double the amount provided in the last four year period.”

Of the 62 entities nationwide that were approved for tax credits, the New Jersey EDA had the fourth largest allocation. Its $125 million award was more than double the average allocation provided under the program.

These federal tax credits can be claimed over a 7-year period for a total of 39 percent for investments made in certified Community Development Entities (CDEs).

The EDA prepared the tax credit program application in partnership with the New Jersey Housing and Mortgage Finance Agency (HMFA) and Casino Reinvestment Development Authority (CRDA). Additionally, NJCDE's investors, iCapital Finance, Inc. and Commerce Bank, committed the investment capital that assisted NJCDE in securing the NMTC allocation.

The Housing and Mortgage Finance Agency (HMFA) will manage the housing component of the New Market Tax Credit program. HMFA will use this tax credit in conjunction with its very successful Market Oriented Neighborhood Investment Program (MONI).

The EDA was established in 1974 to promote economic growth and create jobs. It has arranged more than $16 billion in financing since its inception. For more information about the New Markets Tax Credit Program, call (609) 292-1800 or visit the EDA's website at www.njeda.com.

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Author: Press Release-Micah Rasmussen