Corporate Real Estate Law

Incentive Program Enters Final Year, Drawing Concern from CRE Sector

As seen on: RE-NJ.com
By: Joshua Burd

With the Grow New Jersey program set to expire in less than a year, the prospect of losing the incentive is already weighing heavily on the state’s commercial real estate market.

The tax credit program has been vital to everything from attracting manufacturing firms to ambitious redevelopment projects at large vacant office campuses. And while there is still time for lawmakers to extend the program before it sunsets on July 1, 2019, stakeholders say the uncertainty is already working against New Jersey.

Ted Zangari, who co-chairs the real estate department at the law firm Sills Cummis & Gross P.C., said businesses that are scouting new locations typically begin their search about 24 months before the expiration of their current lease or some other target date for moving. Such a company would likely narrow its search to a handful of sites about a year into that process, he said, but a business may not bother with a higher-cost state like New Jersey — where incentives are often needed to close the gap — if there is a chance that those programs won’t be available.

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New Jersey Announces Six New NRD/Cost Recovery Suits

By: Andrew B. Robins, Esq. 

Wednesday (August 1), New Jersey Attorney General Gurbir Grewal and Lt. Governor Sheila Oliver held a press conferences in Newark and Atlantic City announcing six new lawsuits filed by the State of New Jersey seeking Natural Resource Damages and cost recovery for sites in Newark, Woodbridge, Atlantic City and Warren County. The suits are the beginning of an expected program of aggressive enforcement for contaminated sites.

(Big) Opportunity Knocks: Why Sills Cummis’ Attorneys Feel Opportunity Zones Could Bring ‘Greatest Wealth Transfer in History of Country’

As seen on: ROI-NJ
By: Tom Bergeron

In this ROI-NJ interview, Sills Cummis’ Ted Zangari and Jaime Reichardt share their insights on the recently enacted federal Opportunity Zone Program.

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Ted Zangari, chair of the Redevelopment Law Practice Group at Sills Cummis & Gross P.C. in Newark, is one of the most prominent public incentives and real estate attorneys in the state. His law firm colleague Jaime Reichardt chairs the firm’s state and local tax practice and has advised clients on all sorts of complicated federal and state taxation issues.

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Op-Ed: Tax Incentives Are Vital to N.J. So Says This Progressive

As seen on:  ROI-NJ.com
By: Raymond Lesniak

Beginning with Gov. Jon Corzine and expanded under Gov. Chris Christie, New Jersey’s corporate tax incentives have been criticized by many progressive and conservative organizations as corporate welfare costing the state billions of tax revenues....

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Income Tax Exemption for and Important Changes to Transfers of “Grow NJ” NJ Tax Credits

Last week, legislation was enacted that will exempt the transfer of GrowNJ tax credits from taxation at the state level and change certain other rules associated with such transfers.  Specifically, P.L. 2017, C.313 provides a complete tax exclusion for gains from the sale of Grow New Jersey tax credits for state Corporation Business Tax (CBT) and Gross Income Tax (GIT) purposes.

The bill also clarifies that Grow New Jersey tax credit recipients have three years from the date of issuance to sell the credits, while buyers will have the same 20-year carry forward available beginning with the tax period in which the credit is issued.  This marks a stark change from the previous policy of limiting buyers’ tax credit utilization to only the vintage year in which the tax credit certificate was issued.  In addition, providing sellers with a period of up to 3 years to sell the credits should allow them to receive long term capital gains treatment for federal income tax purposes should they choose to hold the credit for more than one year prior to selling.  

Finally, the same legislation allows for companies to transfer these credits to affiliates for less than 75 percent of the net present value of the credits, regardless of whether the affiliate contributed to the tax credit project or not.  This will make tax credit utilization easier and cheaper for companies with subsidiaries and affiliates with New Jersey CBT liabilities.

The changes take effect for periods beginning on or after January 1, 2017.

Coalition Makes a Push for (Smaller) Incentives

As seen on: ROINJ
By: Tom Bergeron

When it comes to discussing factors involved in retaining and attracting companies to a region, Ted Zangari likes to quote the famous New York City businessman who made a fortune before making a surprising entry into politics.

No, not that one.

Zangari, a member at Sills Cummis & Gross P.C. and the leader of the Smart Growth Economic Development Coalition, is a big fan of former New York City Mayor Michael Bloomberg.

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Industry News – Tax Reform Update

After years of tax policy and planning discussions, and following debates within committee during the last few months, the U.S. House of Representatives’ Ways and Means Committee yesterday released the first draft of the “Tax Cuts & Jobs Act” or H.R. 1 of the 115th Congress. The tax proposals have implications for those in the real estate industry. Here are some brief highlights: 

An Open Letter to Blue State GOP House Members

A SALTY Compromise to Consider for Tax Reform

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By Jaime Reichardt, Esq. and Ted Zangari, Esq.

Dear Members of Congress:

As representatives of high-tax states, you are acutely aware of the importance of the state and local tax deduction, otherwise known as the SALT deduction. Unfortunately, your colleagues on the House Ways and Means Committee have proposed the elimination and most recently, capping, of the SALT deduction despite the valiant efforts of many of you to save it or keep it in its current form. In fact, some committee members of low-tax states have openly suggested that the SALT deduction be eliminated to punish states that are operated inefficiently or expensively, without any appreciation of or regard for the extraordinary demands imposed on dense, urbanized states, particularly “blue” states. Likewise, Treasury Secretary Steve Mnuchin’s rationale for eliminating the SALT deduction is that the federal tax code needs to "stop subsidizing states."

Letters of Credit in Commercial Real Estate: A Primer

By Mark S. Levenson, Esq. and Jeffrey Gaskill, Esq.

It should come as little surprise that as the world becomes ever more interconnected so too does the international investment market. The United States commercial real estate market has been a major beneficiary of foreign investments over the last several years and, in turn, U.S. based sellers, lenders and landlords have had to recalibrate their due diligence procedures. One significant difference when dealing with foreign investment opportunities is the use of a Letter of Credit which will give assurance to the U.S. seller, lender or landlord that the foreign entity or individual has the sums of capital that it purports to have and that the capital is available for its stated purpose. While fairly simple in form, a Letter of Credit requires proper review and negotiation to ensure its effectiveness and this article will provide an understanding of its mechanics.

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What Can N.J. Offer Amazon? ROI-NJ Asked an Expert (Hint: it’s a lot)

Q&A with Ted Zangari of Sills Cummis & Gross

ROI-NJ.com | September 12, 2017

When Amazon officials announced last week that they were looking for a location for a second headquarters, government officials and municipality heads across the country began making a pitch to land one of the nation’s biggest and fastest-growing companies.

The winner will land a project that is expected to bring 50,000 high-paying (read: six-figure) jobs while Amazon makes a $5 billion investment in the area.

Link to Full Article