pitched in quite a bit already,” affirms Somerset’s Michnewicz.
“The infrastructure requirements, especially on larger projects,
are really a heavy lift. We try to encourage the local municipality as well as the counties and the state to contribute.” Government entities, he adds, have the ability to float bonds, and
there are many creative ways of funding infrastructure through
tax-increment financing.
To that end, the statehouse recently approved the Economic
Stimulus Act of 2009, which establishes an Economic Redevelopment and Growth Grant Program. ERG is a revision of the
state’s Revenue Allocation District legislation, which was supposed to be New Jersey’s version of TIF.
But many of these government entities are not willing to step
up to the plate until the developer really pushes. Part of the
problem lies in the way the system has evolved over time. “
Typically,” Santola says, “individual authorities or municipalities
have minded their own shops.”
To a large degree, public/private partnerships are key to moving projects with a
massive infrastructure component forward
since they typically serve to balance the
costs between the town and developer. A
case in point is Sora Holdings’ $300-million,
81-acre Glassboro makeover.
For the project’s 26-acre centerpiece,
Rowan Boulevard, the Borough is currently receiving around $60,000 to $70,000
in real estate taxes, but following the project’s completion Glassboro’s take will be
well over $1 million. “While the Borough
plans to use some of this money to stabilize
its tax base, a portion will also go toward
capital improvements,” says Greg Filipek, a
principal with Sora, which, with the aid of
the town, was able to acquire all 93 properties along Rowan Boulevard without the
use of eminent domain. “There are certain
upgrades we’re happy to handle,” he says,
“but because the town anticipates an in-flow
of cash it can also take on some of the responsibilities.”
Even so, it would be helpful if there were
grant money or a low-cost loan that municipalities could tap into for redevelopment
programs, he says.
The good news for our crumbling infrastructure is that private equity investors,
although not foreseeing an economic turnaround until 2010 or later, are betting on
it for the long term, according to a survey
conducted by KPMG LLP and reported
on GlobeSt.com ( globest.com/renj/0708_09/
kpmgsurvey.html). Energy topped the list of
choices for investment when the market
turns positive, while infrastructure was considered the next meaningful opportunity.
This constitutes yet another reason,
among many, that we cannot afford to let
our state’s structures fall into further disrepair. “Are we simply not going to pay for 21st
century infrastructure?” asks Miller.—RENJ
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