Nonresidential developers in New Jersey have received relief in the way of a one-year moratorium on a fee tied to affordable housing legislation adopted a year ago. Developers who have already paid the fee are eligible for reimbursement—if they act quickly.

On July 27, 2009, Governor Jon Corzine signed into law the New Jersey Economic Stimulus Act of 2009, which includes relief from the Statewide Non-residential Development Fee Act, adopted on July 17, 2008. The 2008 act had imposed a fee equal to 2.5 percent of the equalized assessed value of a nonresidential development project. The fee, designated for affordable housing, applied to projects that did not obtain certificates of occupancy by July 17, 2008. As a result, developers who had already obtained approvals, secured financing, entered into leases, and even initiated construction began scrambling to cover the unanticipated fee so they could obtain a certificate of occupancy.

Now, under the stimulus act, no fee will be imposed on developers who obtain preliminary or final approvals before July 1, 2010 (or, for capital improvement projects, are referred to a planning board for review before that date), and are issued construction permits before January 1, 2013. Developers seeking to reclaim fees already paid must do so in writing within 120 days of the effective date, July 28, 2009. (Projects obtaining Meadowlands Commission approvals and construction permits from the local enforcing agency before July 1, 2010, and January 1, 2013, respectively, will be exempt from fees not yet paid but not eligible for fee refunds). The current law exempts any planned development project that had in place both general development plan approval and a development agreement imposing a one percent or higher fee by July 17, 2008; this provision will remain.

The new legislation also establishes an Economic Redevelopment and Growth Grant program, managed by the New Jersey Economic Development Authority, which will augment financing for developers unable to secure financing from other sources. Developers demonstrating a gap in project financing may be eligible for reimbursement incentive grants for redevelopment projects in State Plan Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), and designated Transit Villages or Centers.

Ballard Spahr attorneys can help you determine if you are eligible for exemption or a refund and can assist with questions on the New Jersey Economic Stimulus Act's procedures.




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