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Redevelopment

Redevelopment projects are time-sensitive and challenging endeavors, dependent upon careful determinations, sound project and financial planning and the precise documentation of responsibilities.

Attorneys in McCarter & English, LLP’s Redevelopment Team have years of experience representing developers, property owners and other parties in all phases of the redevelopment process, including securing municipal bonds and other types of funding; overseeing demolition and environmental remediation; obtaining long-term tax abatements; litigating contested proceedings; negotiating redevelopment and financial agreements; and preparing design and construction contracts for the redevelopment project. The Team’s clients range from individuals to Fortune 50 companies.

Because members of the Redevelopment Team are drawn from many McCarter & English Practice Groups and areas of proficiency, rather than just one, attorneys throughout the firm lend redevelopment assistance as the needs of the specific situation dictate. These Practice Groups which provide expertise for the Redevelopment Team include: 

Real Estate

Recent decisions by the United States Supreme Court have increased the complexity of issues faced by municipalities, developers and property owners in the redevelopment process. The municipal designation of a redevelopment area has significant implications for property owners. The designation may result in the forced sale of the property through exercise of the eminent domain power – a process involving various mandatory procedural steps and public hearings that provide a forum for input and/or objection. Active and timely involvement in the process by the property Owner and the redevelopment team can be crucial to protecting the Property Owner’s rights and interests in the property. Our Redevelopment Team has extensive experience working with federal, state and local regulatory authorities to resolve the myriad of issues that arise in connection with redevelopment projects. We also have worked closely with cities, towns and municipalities to address related zoning, permitting, land use, eminent domain, right of way and other matters. McCarter & English is experienced in representing all three parties to such projects - property owners, developers, and governmental entities - in both administrative proceedings and subsequent litigation.

These proceedings also may be non-adversarial, as is the case when the government entity and private property owner or a developer work together to achieve common objectives. Such public-private partnerships are governed by negotiated redevelopment agreements that need to address the objectives of the parties in a manner consistent with the applicable statutory framework. This negotiation process can require close coordination with agreements covering land use issues, tax abatement, public finance issues and other matters. The diverse talents and experience of attorneys in the Redevelopment Team are available to guide clients through this process.

Public Finance

Lawyers in the Public Finance Group have been an integral part of numerous redevelopment project financings (both public and private) for a range of diverse clients, and have developed innovative structures that have been utilized nationally.

Raising funds through the issuance of tax-exempt and taxable bonds can be crucial to the success of a redevelopment project. The Redevelopment Area Bond Financing Law (RAB Law) was enacted by the New Jersey State Legislature in order to provide mechanisms to finance certain costs of redevelopment so as to promote private investment and stimulate redevelopment in certain municipalities within the State.

McCarter & English's attorneys are particularly well-versed and experienced in the area of public finance. The firm represents the State of New Jersey, the Commonwealth of Massachusetts and many of their agencies, counties, municipalities and county improvement authorities as bond counsel in connection with general obligation, school district, exempt facility and revenue bonds and certificates of participation. Its attorneys also act as counsel to underwriters, letter of credit banks and trustees in public finance transactions throughout the U.S., and have represented real estate developers in public finance transactions involving tax incremental financing.

Property Tax

McCarter & English's attorneys have years of experience negotiating long-term property tax abatements for improvements constructed as part of a redevelopment plan. Municipalities often approve these abatements in order to encourage redevelopment.

Governed by the Long Term Tax Exemption Law (LTTE Law), the process requires the negotiation and execution of a financial agreement between the redeveloper and municipality setting forth requirements for payments to be made in lieu of taxes. Although the municipality receives replacement revenue from these payments – and a partial payment to the county is required – the tax abatement provides an exemption from property taxes on the improvement for as long as thirty years.

As a result, this arrangement can provide an economic incentive for redevelopment without impairing municipal finances. The LTTE Law can be coupled with the RAB Law to provide reduced payments in lieu of tax. The overall thrust of these statutory provisions is to vest municipalities with substantial control and authority over the terms of any tax abatement. McCarter & English's Redevelopment Team attorneys are skilled in negotiating with municipalities and have used creative planning under the LTTE Law and the RAB Law to assist developers in receiving the tax incentives they need.

In addition, McCarter & English's attorneys are experienced in negotiating a variety of tax incentives with local governments and the State of New Jersey. These include corporate tax credits, business retention and relocation credits, and sales and use tax urban enterprise zone qualification. The Economic Opportunity Act of 2013 consolidates five financial incentive programs previously available in New Jersey into two economic development tools. There is a new Grow NJ program which centralizes New Jersey’s business attraction and retention incentives in the form of tax credits for employers that create or retain jobs. Additionally, the new Economic Redevelopment Grant Program (ERG) provides financing incentives of up to 20% of qualified redevelopment project costs and up to 30% in certain designated growth zones.

Environmental

Attorneys in McCarter & English's Environmental Practice Group have broad experience helping clients – including property owners, developers, lenders, financial institutions and economic development agencies – address the complex environmental issues arising out of the sale, purchase and redevelopment of brownfield properties. Redevelopment Team Members drawn from the Environmental Group have a full understanding of all facets of environmental law, having served as counsel to environmental regulatory agencies including the United States Environmental Protection Agency. They regularly write and lecture on environmental law and insurance, and serve on numerous prestigious committees on the environment, redevelopment and urban policy.

The Group's attorneys regularly conduct environmental reviews and due diligence, and also prepare and negotiate property acquisition, financing and indemnification/hold harmless agreements and contracts for fixed-price remediation work. Because they are knowledgeable about insurance products which might underwrite or act as cap insurance on redevelopment deals, Environmental Group attorneys are able to obtain manuscript policies affording cleanup cost and liability coverage for brownfield sites. These can be an important element of a redevelopment project.

Environmental Group members are experienced in negotiating with governmental officials to obtain approval of prospective purchaser agreements and memoranda of understanding, site remediation plans, cleanup cost reimbursement arrangements and other financial assistance and tax credits for projects undertaken on brownfield properties, through the regulatory programs of the EPA, NJDEP and NYCDEC.

The Group's primary objective is to assist the client in identifying and resolving the challenging legal issues that are associated with the ownership and redevelopment of contaminated property, in a manner that permits the Client to accomplish his strategic goals while simultaneously managing risk.

Tax

McCarter & English's tax attorneys are experienced in business transactions, including acquisitions, reorganizations, mergers and investments. This includes experience with the formation and operation of joint ventures and in advising and representing clients in their real estate development investments, including the negotiation and drafting of complex joint venture agreements. McCarter & English's attorneys are experienced in state and federal taxation with a focus on the taxation of entities and their owners. The firm's attorneys have represented clients investing in or sponsoring low and affordable housing projects receiving federal tax credits. 

Construction

Because redevelopment projects typically involve both the demolition of existing structures and the construction of new ones, the McCarter & English Redevelopment Team also includes attorneys who are knowledgeable about all aspects of design and construction.

Particularly when working with sites where hazardous materials are present, it is important to coordinate demolition activities with hazardous materials abatement. The Construction Group attorneys who work with the Redevelopment Team are experienced with demolition, abatements and site remediation contracts, and can combine these elements into a single Construction Contract if that scenario is the most advantageous one for the client. They also have prepared interrelated Contracts for industrial projects where, through an innovative agreement with the demolition contractor and a separate scrap metal buyer, the cost of demolition has been funded entirely through the sale of scrap metal.

In connection with new construction on the redevelopment site, it is important for the Owner/Developer to make early and informed decisions regarding both the design team and the contractor, including the “project delivery system” – i.e. traditional design/bid/build; design/build; or construction manager at risk with a GMP.

The construction attorney members of the Redevelopment Team have experience and specialized expertise in the development of all types of Project Delivery strategies, and in the preparation and negotiation of all related contracts. They also are skilled in resolving contract administration issues that arise during actual construction. These Construction attorneys have represented owners, developers, construction managers, and design professionals in connection with prominent projects such as the MetLife Stadium and the New Prudential Headquarters Building.

The Construction attorney members of McCarter & English's Redevelopment Team are skilled in all aspects of design and construction. Their clients include some of the most recognizable and respected names in the industry. They regularly represent major owners, developers, architects, engineers, construction managers, contractors, subcontractors, suppliers and manufacturers. In addition to Contracting Specialists, McCarter & English has experienced litigators with successful records in complex construction and engineering disputes, including arbitrations, jury trials, and appeals. They regularly counsel clients on issues involving design and development, contracting, bidding, procurement, regulatory and safety matters, contract administration, changes, claims, terminations and disputes resolution. These attorneys are well-versed in design and construction law, public procurement law; government contracts; infrastructure development; insurance; suretyship; bankruptcy, and other matters. Our design expertise (both architectural and engineering) and construction expertise allows us to provide turn-key legal services to our redevelopment clients on virtually any project, public or private.