N.J. Admin. Code § 19:31AA-1.2
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Act" means the New Jersey Food Desert Relief Act, N.J.S.A. 34:1B-303 through 310.
"Affiliate" means an entity that directly or indirectly controls, is under common control with, or is controlled by, the applicant. Control exists in all cases in which the entity is a member of a controlled group of corporations, as defined pursuant to section 1563 of the Internal Revenue Code of 1986 (26 U.S.C. § 1563), or the entity is an organization in a group of organizations under common control, as defined pursuant to subsection (c) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C. § 414).
"Applicant" means a person who enters, or proposes to enter, into an incentive award agreement pursuant to the provisions of the Act pursuant to N.J.S.A. 34:1B-307, including, but not limited to, a lender that completes a project, operates a project, or completes and operates a project.
"Applicant contributed capital" or "equity" means capital contributed by the applicant that may consist of cash, deferred development fees, costs for project feasibility incurred within the 12 months prior to application, property value less any mortgages when the applicant owns the project site, the cost of infrastructure improvements in the public right-of-way, and any other investment by the applicant in the project deemed acceptable by the Authority. Equity shall include Federal or local grants and proceeds from the sale of Federal or local tax credits, including, but not limited to, the Historic Rehabilitation Tax Credit, 26 U.S.C. § 47, and New Market Tax Credit, 26 U.S.C. § 45D. Equity shall not include State grants or tax credits or proceeds from redevelopment area bonds. If the supermarket or grocery store is a component of a facility, the equity contributed by the applicant to the development of the facility shall be considered as equity for the project only to the extent of the supermarket or grocery store's pro-rata share, based on square footage, of the facility.
"Authority" means the New Jersey Economic Development Authority, as established at section 4 of P.L. 1974, c. 80 (N.J.S.A. 34:1B-4).
"Board" means the Board of the New Jersey Economic Development Authority, as established at section 4 of P.L. 1974, c. 80 (N.J.S.A. 34:1B-4).
"Cash flow" means the profit or loss that an investment property earns from rent, deposits, and other fees after financial obligations, such as debt, maintenance, government payments, and other expenses, have been paid. For purposes of cash flow, government payments shall not include, among other things, payments that are the result of a violation or a settlement of a violation or any payment that is not reasonable and customary, as determined by the Authority.
"Commitment period" means a period that commences after the eligibility period. This period together with the eligibility period equals seven years.
"Co-applicant" means an entity that:
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Eligibility period" means the period of four years for a financing gap tax credit award and up to three years for an initial operating cost tax credit award during which an applicant or a co-applicant, if applicable, may claim a tax credit pursuant to the Program.
"Financing gap tax credit" means the tax credit awarded pursuant to N.J.A.C. 19:31AA-1.7 to mitigate a project financing gap.
"First or second new supermarket or grocery store" means the first and second new supermarket or grocery store within each food desert community to be approved for tax credits pursuant to the
Program by the Authority, except that a supermarket or grocery store may lose the designation of first or second new supermarket or grocery store if the project does not meet milestones designated by the Authority in a timely manner, as determined by the Authority.
"Food desert community" means a physically contiguous area in the State in which residents have limited access to nutritious foods, such as fresh fruit and vegetables, and that has been designated as a food desert community pursuant to N.J.S.A. 34:1B-306, a list of which is located at http://www.njeda.gov.
"Incentive award" means an award of tax credits to an applicant or a co-applicant, if applicable, to reimburse an applicant or a co-applicant, if applicable, for all or a portion of the project financing gap or initial operating shortfall pursuant to the provisions of the Act and this subchapter.
"Incentive award agreement" means the contract executed between an applicant, any co-applicant, if applicable, and the Authority pursuant to N.J.S.A. 34:1B-307, which sets forth the terms and conditions under which the applicant and co-applicant, if applicable, shall receive the incentive award.
"Infrastructure improvements in the public right-of-way" means public structures or improvements, including public electric vehicle charging stations, located in the public right-of-way that are located within a project area, and public utilities such as water, sewer, electric, and gas, either of which are dedicated to or owned by a governmental body or agency upon completion of the improvement, or any required payment in lieu of the structures, improvements, or projects, or any costs of remediation associated with the structures, improvements, or projects, and that are determined by the Authority, in consultation with applicable State agencies, to be consistent with and in furtherance of State public infrastructure objectives and initiatives.
"Initial operating costs" means expenditures by the applicant for the operation of a first or second new supermarket or grocery store within the first three years after the opening of the supermarket or grocery store for business to the public, but within a standard range based upon industry standards, as determined by the Authority. Initial operating costs shall not include inventory, incentive consultant fees, or Authority fees. Initial operating costs may include expenditures for the operation of a first or second new supermarket or grocery store incurred within one month prior to the opening of the supermarket or grocery store for business to the public. Initial operating costs may additionally include expenditures by an affiliate of the applicant for costs incurred at the site of the project.
"Initial operating cost tax credit" means the tax credit awarded pursuant to N.J.A.C. 19:31AA-1.8 to mitigate the initial operating costs of a new supermarket or grocery store.
"Initial operating shortfall" means, on an annual basis, initial operating costs, including a net operating profit acceptable to the Authority, reduced by the income to the applicant associated with the operation of the new supermarket or grocery store after cost of goods sold, including, but not limited to, sales income and income from the supermarket or grocery store tenants, sub-tenant, and licensees. If the result is negative, the initial operating shortfall shall be $ 0.00.
"Labor harmony agreement" means an agreement between a business that serves as the owner or operator of a supermarket or grocery store and one or more labor organizations, which requires, for the duration of the agreement: that any participating labor organization and its members agree to refrain from picketing, work stoppages, boycotts, or other economic interference against the business; and that the business agrees to maintain a neutral posture with respect to efforts of any participating labor organization to represent employees at a supermarket or grocery store, agrees to permit the labor organization to have access to the employees, and agrees to guarantee to the labor organization the right to obtain recognition as the exclusive collective bargaining representatives of the employees at a supermarket or grocery store by demonstrating to the New Jersey State Board of
Mediation, Division of Private Employment Dispute Settlement, or a mutually agreed-upon, neutral, third-party, that a majority of workers in the unit have shown their preference for the labor organization to be their representative by signing authorization cards indicating that preference. The labor organization or organizations shall be from a list of labor organizations that have requested to be on the list and that the Commissioner of Labor and Workforce Development has determined represent substantial numbers of supermarket or grocery store employees in the State.
"Net operating profit" means pre-income tax operating profit.
"New supermarket or grocery store" means a supermarket or grocery store that commenced new construction of the building or commenced rehabilitation of at least 75 percent of its square footage, after January 7, 2021 (the effective date of the Act). For purposes of this definition, rehabilitation of at least 75 percent of the square footage of a supermarket or grocery store means the repair or replacement of two or more major systems, including, but not limited to: roof, plumbing, heating and cooling (including refrigeration), electrical, load bearing structural systems, or weatherization (for example, solar panels, siding, replacement windows, and doors), where the costs of such repair or replacement, exclusive of soft costs that exceed 20 percent of the total costs of repair and replacement, exceeds 60 percent of the fair market value of a rehabilitated supermarket or grocery store after such repair and replacement, and the rehabilitation affects at least 75 percent of square footage of the supermarket or grocery store.
"Opening of the supermarket or grocery store for business to the public" means the date a new supermarket or grocery store has received a temporary certificate of occupancy and all certifications from State and local health departments required to operate; met the requirements of the incentive award; and starts operating the supermarket or grocery store on a full-time basis.
"Operating the supermarket or grocery store on a full-time basis" or "operating on a full-time basis" means operating the new supermarket or grocery store at least 60 hours per week every week of the year, absent unavoidable closures or other circumstances approved by the Authority.
"Program" means the New Jersey Food Desert Relief Tax Credit Program established by the Act and administered pursuant to this subchapter.
"Project" means, pursuant to the approval letter described at N.J.A.C. 19:31AA-1.8: for a financing gap tax credit, the development and opening of the new supermarket or grocery store for business to the public; or for an initial operating cost tax credit, owning, leasing, or subleasing the first or second new supermarket or grocery store and operating the supermarket or grocery store on a full-time basis.
"Project area" means land or lands on which the new supermarket or grocery store is located and land or lands adjacent and necessary to the operation of the new supermarket or grocery store, including, but not limited to, parking lots and loading docks.
"Project cost" means the costs incurred in connection with the establishment of a new supermarket or grocery store within a food desert community by the applicant until the opening of the supermarket or grocery store for business to the public and the certification of costs pursuant to N.J.A.C. 19:31AA-1.8, including the costs relating to lands, buildings, improvements, real or personal property, or any interest therein, including leases discounted to present value, lands under water, riparian rights, space rights, and air rights acquired, owned, developed or redeveloped, constructed, reconstructed, rehabilitated, or improved, and any environmental remediation costs, plus soft costs of an amount not to exceed 20 percent of the project costs, and the cost of infrastructure improvements, including ancillary infrastructure projects. For the purposes of this subchapter, ancillary infrastructure projects may include off-site self-contained temperature-controlled lockers located in a food desert community that is exclusively serviced from the supermarket or grocery store. Project costs shall include otherwise qualifying costs incurred by an affiliate of the applicant. The fees paid by the applicant or a co-applicant, if applicable, to the Authority associated with the application or administration of an incentive award shall not constitute a project cost. Project costs shall not include the cost of acquisition of land. If the supermarket or grocery store is a component of a facility, the otherwise qualifying costs of any shared structures or improvements, including, but not limited to, foundations or parking lots, may be included as project cost only to the extent of the supermarket or grocery store's pro-rata share, based on square footage, of the facility.
"Project financing gap" means the part of the total development costs, including reasonable and appropriate return on investment, that remains to be financed after all other sources of capital have been accounted for, including, but not limited to, applicant contributed capital, which shall not be less than 20 percent of the total project cost, which may include the property value of any existing land and improvements in the project area owned or controlled by the applicant, and the cost of infrastructure improvements in the public right-of-way, and investor or financial entity capital or loans for which the applicant, after making all good faith efforts to raise additional capital, certifies that additional capital cannot be raised from other sources on a non-recourse basis.
"Property value" means the lesser of: the purchase price, provided the property was purchased pursuant to an arm's length transaction within 12 months of application; or the value as determined by a current appraisal acceptable to the Authority.
"Reasonable and appropriate return on investment" means the discount rate at which the present value of the future cash flows of an investment equals to the cost of the investment. For purposes of the analysis of the reasonable and appropriate return on investment, an investment shall not include any Federal, State, or local tax credits and grants.
"Retail space" means the areas of the supermarket or grocery store where customers are allowed to find and purchase items.
"Soft costs" means costs not directly related to construction, including capitalized interest paid to third parties, real estate taxes, utility connection fees, accounting, title/bond insurance, fixtures/equipment with a useful life of five years or less, affordable housing fees, pre-opening costs, and all costs associated with financing, design, engineering, legal, or real estate commissions, including, but not limited to, architect fees, permit fees, loan origination and closing costs, construction management, and freight and shipping costs. The term does not include early lease termination costs, airfare, mileage, tolls, gas, meals, packing material, marketing and advertising, temporary signage, incentive consultant fees, Authority fees, loan interest payments on permanent financing, escrows, reserves, commissions and fees to the applicant, project management, or other similar costs.
"Square feet" or "square footage" means the sum of all areas on all floors of an enclosed retail outlet included within the outside faces of its exterior walls, including all vertical penetration areas for circulation and shaft areas that connect one floor to another, but disregarding cornices, pilasters, buttresses, and similar structures that extend beyond the wall faces.
"Supermarket or grocery store" means a retail outlet with a lease or ownership of at least 16,000 square feet, of which at least 80 percent is occupied by food and related products, which products shall be based on industry standards, as determined by the Authority, except that the food and related products shall not include alcoholic beverages and products related to the consumption of such beverages. The square footage of a supermarket or grocery store shall include any space that the supermarket or grocery store subleases, licenses, or otherwise allows another entity to occupy.
"Tax credit" means credit against a tax liability pursuant to section 1 of P.L. 1950, c. 231 (N.J.S.A. 17:32-15), N.J.S.A. 17B:23-5, section 5 of P.L. 1945, c. 162 (N.J.S.A. 54:10A-5), and sections 2 and 3 of P.L. 1945, c. 132 (N.J.S.A. 54:18A-2 and 3).
"Total development cost" means any and all costs incurred for and in connection with the project by the applicant and any affiliate of the applicant until the opening of the supermarket or grocery store for business to the public, or upon such other event evidencing project completion as set forth in the incentive grant agreement, which shall include, but is not limited to, project costs, soft costs, and cost of acquisition of land and buildings. If the supermarket or grocery store is a component of a facility, the costs of any shared structures or improvements, including, but not limited to, foundations or parking lots, may be included as total development costs only to the extent of the supermarket or grocery store's pro-rata share, based on square footage, of the facility.
"Unavoidable closures" means any closure due to weather, strikes, acts of God, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty, or other causes similarly beyond the control of the operator of the supermarket or grocery store as determined in the sole discretion of the Authority.
N.J. Admin. Code § 19:31AA-1.2