Back to Life: EDA Board Approves Rules for Historic Properties Reinvestment Program
Have you seen them. We have seen them all. If you drive through almost any town in New Jersey – both urban and suburban – you’re sure to see a building from a bygone era that’s no longer being used to its full capacity, if at all.
Usually brick. Often with ornate columns and finishes. Always solid.
Instead of relegating them to the “they don’t make ’em like that anymore” file in history, New Jersey is trying to bring them back.
On Wednesday, the board New Jersey Economic Development Authority approved regulations for the Historic Properties Reinvestment Program, which was part of the 2020 program New Jersey Economic Recovery Act.
The program, with an annual cap of $50 million for each of the next six years, aims to help developers take these older buildings, code them, and reintegrate them into the municipality’s economic ecosphere.
EDA CEO Tim Sullivan said it was a long overdue idea.
“If you drive around Trenton, Camden, Paterson, Newark, Jersey City and a number of other places, you will still see some great old buildings that – with a little extra love and investment – could be converted into something special: housing, retail, mixed use or even innovation spaces,” he said.
“These are phenomenal buildings – but these are buildings that may have been built at the turn of the last century. So they have good bones, but need updating.
Application details, next steps
The New Jersey Economic Development Authority Board of Directors has approved proposed rules for the Historic Properties Reinvestment Program which will be released for public comment. The Board will consider final adoption of the rules after the public comment period ends.
The primary focus of the HPRP is historic preservation as a component of community development, aimed at attracting long-term private investment to the state while preserving properties with historic value. The program will generally support properties that are repurposed for job creation opportunities, transit-oriented developments, and housing (including affordable housing).
Eligible projects must include the rehabilitation of a previously identified historic structure that is listed or a structure that is in a district designated by the National Register or the New Jersey Register of Historic Places, designated as historic by the Pinelands Commission or identified as historic by a municipality in accordance with criteria approved by the Historic Preservation Officer.
The amount of tax credits a project is eligible for is a percentage of eligible project costs, subject to a cap determined by the location of the project, other financing available and other aspects of the project. Most eligible projects can receive tax credits of up to 40% of eligible costs, with a maximum of $4 million for qualifying properties (or $8 million for those in qualifying incentive plots).
Anyone who’s seen HGTV knows the kinds of interior updates that can be made. This program is more than that. It’s not just about updating what will almost certainly be an outdated HVAC system, it’s about making sure the building complies with the Americans with Disabilities Act and all other building codes.
“That’s obviously very important and can sometimes be difficult to do if the building was built so long ago,” Sullivan said. “It’s more expensive, but it can be environmentally friendly because we’re reusing a building rather than tearing it down and rebuilding it.”
Sullivan said he expects the EDA to be ready to accept applications in March. And, while he hopes the program will be in full use for years to come, he knows it can be slow to get off the ground as developers need to understand the possibilities.
Those possibilities, Sullivan said, are endless.
Retail, mixed-use and multi-family businesses immediately come to mind, he said, speaking of the type of structures found near transit areas. But Sullivan is also intrigued by the potential he has in the innovation economy that Governor Phil Murphy so often touts.
He quotes author Jane Jacobs’ famous phrase: “New ideas need old buildings.
“Entrepreneurs need cheap space in good condition,” he said. “Whether it’s an old bank or an old mill, a factory or a warehouse, they can be great spaces for innovative businesses.”
Sullivan notes that not all buildings will be eligible — and notes that many historic preservation projects don’t need help. Others do.
“We’re going to look for places where we can stretch the dollars, where there’s a funding gap, so it doesn’t make sense for the project without that,” he said. “So not all historic renovations will be suitable for this program, but certainly buildings in places that need a bit more vitality and a bit more energy will be.”
To do anything else would be a shame, he said.
“We don’t want to tear them down because they are such beautiful structures,” he said. “This is an opportunity to not only honor our history, but, in many cases, clean up derelict but historically significant buildings in the heart of our downtowns.”