Blog

Governor approves big changes to the NJ Aspire Program that benefit Atlantic City

Nicholas Talvacchia

By Nicholas F. Talvacchia, Esq. and Benjamin P. Ojserkis, Esq.

At a Glance:

– Amendments to the Aspire program make development projects in certain Government Restricted Municipalities (“GRM”), Atlantic City, Paterson, or Trenton, eligible for tax incentives up to 85% of total project costs up to $120 million.

– Projects located in Atlantic City or another GRM will have an accelerated incentive payout schedule of 5 years instead of 10 years.

– Projects in Atlantic City or other GRMs can now include building and land acquisition costs as a part of eligible expenses.

What is the NJ Aspire Program:

The NJ Aspire Program, administered by the New Jersey Economic Development Authority (NJEDA), is the state’s largest developer-centric financial incentive program designed to encourage the development of projects that would not otherwise be financially feasible.

The program offers state tax credits that are transferable to encourage investments in areas where traditional financing falls short.

In an effort to make the Aspire Program more desirable to prospective developers, the Legislature approved A2076/S1323 on December 19, 2024, amending New Jersey’s Aspire Program. Governor Murphy signed the bill into law on January 23, 2025.

Proposed Changes:

Under the Aspire Program, Atlantic City, Paterson, and Trenton were each designated as a GRM allowing them to benefit from larger tax incentives and less burdensome requirements. The Aspire Amendment added three new GRMs – Camden, East Orange and New Brunswick.

1. Larger Payout Percentage: Projects located in one of the three original GRMs will now be eligible to receive incentives equal to 85% (up from 80%) of total project costs up to $120 million in total tax credits.

a. Projects located in one of the three new GRMs will be eligible to receive incentives equal to 80% of total project costs.

b. Projects located outside of Atlantic City or another GRM, are capped at between 50% and 60% of total project costs.

2. Accelerated Incentive Payouts: Projects in Atlantic City or other GRMs, will have an accelerated incentive payout schedule of 5 years. Projects located outside of a GRM receive tax incentives over 10 years.

3. Inclusion of Building and Land Acquisition Costs: Projects in Atlantic City and other GRMs can now include building and land acquisition costs (capped at 20% of eligible costs) as part of eligible expenses. Projects located outside of a GRM cannot include building or land acquisition costs.

4. Reduction and Removal of Occupancy Requirements: Residential Projects will now be exempt from the previous 60% occupancy requirement. The occupancy requirement for commercial projects will now start in the fourth year of the project’s eligibility period rather than the first year.

5. Smaller Project Sizes: In Atlantic City and other GRMs, the minimum project size is reduced from 100,000 square feet to 25,000 square feet.

Transformative Projects:

Under the Aspire Program Transformative Projects are large-scale projects located in a GRM such as Atlantic City and are eligible to receive tax incentives equal to 80% of total project costs with a maximum potential tax credit award of $400 million.

In Atlantic City or another GRM, a Transformative Project must have total project costs of at least $150 million, additionally, the project must create a minimum of at least 200 new residential units.

Outside of a GRM the construction of 400 new residential units and at least the creation of 30,000 square feet of commercial space is required.

For more information on the Aspire Program or to see if your project may qualify for an award of tax incentives under the Aspire Program don’t hesitate to get in touch with Nicholas Talvacchia, Esq. at (609) 572-7544, ntalvacchia@cooperlevenson.com or Ben Ojserkis, Esq. at (609) 572-7550, bojserkis@cooperlevenson.com