Turning Dirt into Gold: Brownfield Redevelopment in NJ
New Jersey's industrial legacy has left us with thousands of "brownfields"—properties where redevelopment is complicated by environmental contamination. While many developers run from these sites, smart ones run toward them, knowing that state incentives can turn a liability into a profitable asset.
The HDSRF Program
The Hazardous Discharge Site Remediation Fund (HDSRF) is a powerful tool administered by the NJEDA and NJDEP. It provides grants and loans to municipalities and private developers for investigation and cleanup.
For Municipalities (The "Free Look")
Municipalities can receive 100% grants for Preliminary Assessment (PA) and Site Investigation (SI) to determine if a site is contaminated. This allows a town to de-risk a site before putting it out to bid for developers.
For Private Developers
While direct grants to private developers are limited, you can partner with the municipality. The town applies for the funding, and you execute the work as the designated redeveloper.
Brownfield Reimbursement Agreement
This program allows developers to be reimbursed for up to 75% of remediation costs through a reimbursement of new state taxes generated by the project (sales tax, CBT, etc.).
- Eligibility: Site must be a brownfield and the developer must have a Redevelopment Agreement with the municipality.
- Gap Financing: This is a powerful way to fill the "gap" caused by extraordinary environmental costs.
Liability Protection
The biggest fear is liability. NJ law provides a Covenant Not to Sue upon issuance of a Response Action Outcome (RAO) by an LSRP. This protects the developer from future state enforcement actions for the remediated areas.
De-Risk Your Acquisition
I help developers evaluate environmental risks and structure acquisitions to maximize HDSRF and other incentive eligibility.
About the Author
Ryan Goldfarb is a real estate development advisor. He specializes in brownfield redevelopment and environmental risk management.