New Jersey § 40a:20-3

§ 40a:20-3.

As used in P.L.1991, c. 431 ( C.40A:20-1 et seq. ): a. “ Gross revenue ” means annual gross revenue or gross shelter rent or annual gross rents, as appropriate,

and other income, for each urban renewal entity designated pursuant to P.L.1991, c. 431 ( C.40A:20-1 et seq. ). The financial agreement shall establish the method of computing gross revenue for

the entity, and the method of determining insurance, operating and maintenance expenses

paid by a tenant which are ordinarily paid by a landlord, which shall be included

in the gross revenue; provided, however, that any federal funds received, whether

directly or in the form of rental subsidies paid to tenants, by a nonprofit corporation

that is the sponsor of a qualified subsidized housing project, shall not be included

in the gross revenue of the project for purposes of computing the annual services

charge for municipal services supplied to the project; and provided further that

any gain realized by the urban renewal entity on the sale of any unit in fee simple,

whether or not taxable under federal or State law, shall not be included in computing

gross revenue. b. “ Limited-dividend entity ” means an urban renewal entity incorporated pursuant to Title 14A of the New Jersey

Statutes, or established pursuant to Title 42 of the Revised Statutes, for which the

profits and the entity are limited as follows. The allowable net profits of the entity shall be determined by applying the allowable

profit rate to each total project unit cost, if the project is undertaken in units,

or the total project cost, if the project is not undertaken in units, and all capital

costs, determined in accordance with generally accepted accounting principles, of

any other entity whose revenue is included in the computation of excess profits, for

the period commencing on the date on which the construction of the unit or project

is completed, and terminating at the close of the fiscal year of the entity preceding

the date on which the computation is made, where: “ Allowable profit rate ” means the greater of 12% or the percentage per annum arrived at by adding 1 1 / 4 % to the annual interest percentage rate payable on the entity's initial permanent

mortgage financing. If the initial permanent mortgage is insured or guaranteed by a governmental agency,

the mortgage insurance premium or similar charge, if payable on a per annum basis,

shall be considered as interest for this purpose. If there is no permanent mortgage financing the allowable profit rate shall be the

greater of 12% or the percentage per annum arrived at by adding 1 1 / 4 % per annum to the interest rate per annum which the municipality determines to be

the prevailing rate on mortgage financing on comparable improvements in the county. c. “ Net profit ” means the gross revenues of the urban renewal entity less all operating and non-operating

expenses of the entity, all determined in accordance with generally accepted accounting

principles, but: (1) there shall be included in expenses: (a) all annual service charges paid pursuant

to section 12 of P.L.1991, c. 431 ( C.40A:20-12 ); (b) all payments to the municipality of excess profits pursuant to section 15

or 16 of P.L.1991, c. 431 ( C.40A:20-15 or 40A:20-16 ); (c) an annual amount sufficient to amortize the total project cost and all capital

costs determined in accordance with generally accepted accounting principles, of any

other entity whose revenue is included in the computation of excess profits, over

the term of the abatement as set forth in the financial agreement; (d) all reasonable

annual operating expenses of the urban renewal entity and any other entity whose revenue

is included in the computation of excess profits, including the cost of all management

fees, brokerage commissions, insurance premiums, all taxes or service charges paid,

legal, accounting, or other professional service fees, utilities, building maintenance

costs, building and office supplies, and payments into repair or maintenance reserve

accounts; (e) all payments of rent including, but not limited to, ground rent by

the urban renewal entity; (f) all debt service; (2) there shall not be included in expenses either depreciation or obsolescence, interest

on debt, except interest which is part of debt service, income taxes, or salaries,

bonuses or other compensation paid, directly or indirectly to directors, officers

and stockholders of the entity, or officers, partners or other persons holding any

proprietary ownership interest in the entity. The urban renewal entity shall provide to the municipality an annual audited statement

which clearly identifies the calculation of net profit for the urban renewal entity

during the previous year. The annual audited statement shall be prepared by a certified public accountant

and shall be submitted to the municipality within 90 days of the close of the fiscal

year. d. “ Nonprofit entity ” means an urban renewal entity incorporated pursuant to Title 15A of the New Jersey

Statutes for which no part of its net profits inures to the benefit of its members. e. “ Project ” means any work or undertaking pursuant to a redevelopment plan adopted pursuant

to the “Local Redevelopment and Housing Law,” P.L.1992, c. 79 ( C.40A:12A-1 et al.), which has as its purpose the redevelopment of all or any part of a redevelopment

area including any industrial, commercial, residential or other use, and may include

any buildings, land, including demolition, clearance or removal of buildings from

land, equipment, facilities, or other real or personal properties which are necessary,

convenient, or desirable appurtenances, such as, but not limited to, streets, sewers,

utilities, parks, site preparation, landscaping, and administrative, community, health,

recreational, educational and welfare facilities , and zero-emission vehicle fueling and charging infrastructure . f. “ Redevelopment area ” means an area determined to be in need of redevelopment and for which a redevelopment

plan has been adopted by a municipality pursuant to the “Local Redevelopment and Housing

Law,” P.L.1992, c. 79 ( C.40A:12A-1 et al.). g. “ Urban renewal entity ” means a limited-dividend entity, the New Jersey Economic Development Authority or

a nonprofit entity which enters into a financial agreement pursuant to P.L.1991, c. 431 ( C.40A:20-1 et seq. ) with a municipality to undertake a project pursuant to a redevelopment plan for

the redevelopment of all or any part of a redevelopment area, or a project necessary,

useful, or convenient for the relocation of residents displaced or to be displaced

by the redevelopment of all or any part of one or more redevelopment areas, or a low

and moderate income housing project. h. “ Total project unit cost ” or “ total project cost ” means the aggregate of the following items as related to a unit of a project, if

the project is undertaken in units, or to the total project, if the project is not

undertaken in units, all of which as limited by, and approved as part of the financial

agreement: (1) cost of the land and improvements to the entity, whether acquired

from a private or a public owner, with cost in the case of leasehold interests to

be computed by capitalizing the aggregate rental at a rate provided in the financial

agreement; (2) architect, engineer and attorney fees, paid or payable by the entity

in connection with the planning, construction and financing of the project; (3) surveying

and testing charges in connection therewith; (4) actual construction costs which

the entity shall cause to be certified and verified to the municipality and the municipal

governing body by an independent and qualified architect, including the cost of any

preparation of the site undertaken at the entity's expense; (5) insurance, interest

and finance costs during construction; (6) costs of obtaining initial permanent financing;

(7) commissions and other expenses paid or payable in connection with initial leasing;

(8) real estate taxes and assessments during the construction period; (9) a developer's

overhead based on a percentage of actual construction costs, to be computed at not

more than the following schedule: $500,000 or less -- 10% $500,000 through $1,000,000 -- $50,000 plus 8% on excess above $500,000 $1,000,001 through $2,000,000 -- $90,000 plus 7% on excess above $1,000,000 $2,000,001 through $3,500,000 -- $160,000 plus 5.6667% on excess above $2,000,000 $3,500,001 through $5,500,000 -- $245,000 plus 4.25% on excess above $3,500,000 $5,500,001 through $10,000,000 -- $330,000 plus 3.7778% on excess above $5,500,000 over $10,000,000 -- 5% If the project includes units in fee simple, with respect to those units, “ total project cost ” shall mean the sales price of the individual housing unit which shall be the most

recent true consideration paid for a deed to the unit in fee simple in a bona fide

arm's length sales transaction, but not less than the assessed valuation of the unit

in fee simple assessed at 100 percent of true value. If the financial agreement so provides, there shall be excluded from the total project

cost: (1) actual costs incurred by the entity and certified to the municipality by

an independent and qualified architect or engineer which are associated with site

remediation and cleanup of environmentally hazardous materials or contaminants in

accordance with State or federal law; and (2) any extraordinary costs incurred by

the entity and certified to the chief financial officer of the municipality by an

independent certified public accountant in order to alleviate blight conditions within

the area in need of redevelopment including, but not limited to, the cost of demolishing

structures considered by the entity to be an impediment to the proposed redevelopment

of the property, costs associated with the relocation or removal of public utility

facilities as defined pursuant to section 10 of P.L.1992, c. 79 ( C.40A:12A-10 ) considered necessary in order to implement the redevelopment plan, costs associated

with the relocation of residents or businesses displaced or to be displaced by the

proposed redevelopment, and the clearing of title to properties within the area in

need of redevelopment in order to facilitate redevelopment. i. “ Housing project ” means any work or undertaking to provide decent, safe, and sanitary dwellings for

families in need of housing; the undertaking may include any buildings, land (including

demolition, clearance or removal of buildings from land), equipment, facilities, or

other real or personal properties or interests therein which are necessary, convenient

or desirable appurtenances of the undertaking, such as, but not limited to, streets,

sewers, water, utilities, parks; site preparation; landscaping, and administrative,

community, health, recreational, educational, welfare, commercial, or other facilities,

or to provide any part or combination of the foregoing. j. “ Redevelopment relocation housing project ” means a housing project which is necessary, useful or convenient for the relocation

of residents displaced by redevelopment of all or any part of one or more redevelopment

areas. k. “ Low and moderate income housing project ” means a housing project which is occupied, or is to be occupied, exclusively by

households whose incomes do not exceed income limitations established pursuant to

any State or federal housing program. l . “ Qualified subsidized housing project ” means a low and moderate income housing project owned by a nonprofit corporation

organized under the provisions of Title 15A of the New Jersey Statutes for the purpose

of developing, constructing and operating rental housing for senior citizens under section 202 of Pub.L. 86-372 (12 U.S.C. s.1701q) or rental housing for persons with disabilities under section 811 of Pub.L. 101-625 ( 42 U.S.C. s.8013 ), or under any other federal program that the Commissioner of Community Affairs by

rule may determine to be of a similar nature and purpose. m. “ Debt service ” means the amount required to make annual payments of principal and interest or the

equivalent thereof on any construction mortgage, permanent mortgage or other financing

including returns on institutional equity financing and market rate related party

debt for a project for a period equal to the term of the tax exemption granted by

a financial agreement. n. “ Zero-emission vehicle ” means a vehicle certified as a zero emission vehicle pursuant to the California

Air Resources Board zero emission vehicle standards for the applicable model year,

including but not limited to, battery electric-powered vehicles and hydrogen fuel

cell vehicles. o. “ Zero-emission vehicle fueling and charging infrastructure ” means infrastructure to charge or fuel zero-emission vehicles, including but not

limited to, public electric vehicle charging stations and public hydrogen fueling

stations.