By Jennifer Mazawey
Partner, Genova Burns
In development, we often laud “public-private partnerships” – ultimately an overused blanket term for projects in which a state or local government is in some way financially vested.
But, the reality is that very few strides are made in real estate and development without at least peripheral support from the state or local governing bodies. And, here in New Jersey, the public and private sectors have set the table for what has become perhaps the smartest and most effective development climate in the nation.
New Jersey has benefitted from the presence of several forward-thinking, innovative developers, to be sure, but policymakers have clearly done their part to incentivize projects that will have the greatest positive impact to their communities.
Our firm, Genova Burns, has had the privilege to work firsthand to observe the impact of this throughout the Garden State thanks to a few key initiatives:
The Economic Opportunity Act of 2013: Less than two years ago, New Jersey lawmakers signed EOA 2013, which streamlined the state’s fragmented business incentives programs into a comprehensive, easily-digestible package to attract new businesses to the state.
Under the law’s flagship GrowNJ program, businesses are heavily incentivized to create or retain jobs in the state, with added bonuses for lesser-developed transit-oriented oriented neighborhoods in all corners of New Jersey, from West New York to Camden.
In this case, the State is responding directly to increased demand for jobs close to transportation, culture, and residences – and many companies have already taken advantage.
Regional and Municipal Tax Abatements: On a more granular level, municipal officials throughout the state have also responded to increased demand for mixed-use projects in New Jersey’s burgeoning urban centers. While state laws such as EOA 2013 can offer broad incentives to develop in certain environments, it’s up to local officials to identify where projects are best suited for the specific needs of the local community.
Take Jersey City for example, where, after seeing explosive development near the popular waterfront, the administration shifted tax abatement priorities to more underserved neighborhoods like Journal Square. Outside of the Gold Coast, other communities are using tax abatements to spur development and reenergize their downtowns to create livable spaces, which are attractive to millennials and empty nesters.
The City of Rahway is successfully using tax abatements to build up its downtown with projects like Meridia’s Water’s Edge and Lafayette Village projects, and other downtown housing and arts projects slated to come on line.
Revamping Obsolete Zoning: Mixed-use projects will continue to dominate new construction, particularly in denser areas of the state. Consumers and businesses are seeking combined access to residences, retail, and office space more than ever before.
The problem? Antiquated zoning ordinances often only allow for a single use on any given property, making ground-up mixed-use development an arduous approval process.
Several towns are proactively revising their zoning ordinances to facilitate – rather than impede – this modern development model.
For the first time in many years, the City of Newark – no stranger to the development scene – has recently completed a comprehensive review of its zoning ordinances to create greater synergy with how the City is actually developing.
Other municipalities continue to use redevelopment and rehabilitation area designations as tools to effectively update zoning in areas ripe for new development.
We have seen communities with thriving transportation hubs, like Montclair and Red Bank, successfully utilize those redevelopment areas to improve their zoning and create opportunities for the types of live-work-play areas today’s workforce wants to see.
The bottom line is that, whether or not a local governing body is a financial partner in a project, the public and private sectors stand to benefit mutually from working together on progressive and efficient development.
As demand for real estate innovation continues to evolve, so too, must our policymaking – New Jersey is proving just that.