The New Jersey Department of Transportation and New Jersey Transit have developed a program known as the Transit Village Initiative, which recognizes municipalities that are committed to redeveloping the area around a transit facility into a compact, mixed-use community.  Once designated, a municipality may obtain technical assistance and financial benefits.  New Jersey’s Transit Village Initiative is an offshoot of the so-called “smart growth” policies first advanced by former Governor Christine Todd Whitman and included in the New Jersey State Development and Redevelopment Plan.  It is not supported by specific legislation.  However, this could soon change if the State Legislature enacts and Governor Jon Corzine signs into law the proposed New Jersey Transit Villages Act introduced earlier this year in the Senate as bill number S1223.

Under the proposed New Jersey Transit Villages Act, at Section 11, “[a] municipality or a county in which a transit village has been designated by the [C]ommissioner [of Transportation], shall receive priority on all applications for funding from programs that are administered by State agencies and departments that support the use of transit through transit oriented developments.”  This legislation would also, among other things, authorize the New Jersey Department of Environmental Protection to develop an expedited and coordinated permit review and approval process for transit villages and make available to developers of property within a designated transit village tax credits “equal to four percent of allowable costs plus such other incentives deemed appropriate[.]” The term “allowable costs” is defined under Section 12 of the Senate bill and includes such expenses as “legal, engineering, architectural, and other professional fees allocable to construction or rehabilitation . . . not to exceed $200 per square foot of finished interior space.”

The New Jersey Transit Villages Act is also being considered in the State Assembly under a companion bill (No. A1633).  However, the future of this proposed legislation is uncertain.  In light of the current economic downturn and the concomitant budgetary concerns, it appears unlikely that the Legislature or the Governor will be receptive to any new funding or tax credit programs. On the other hand, because the proposed New Jersey Transit Villages Act encourages redevelopment planning and construction which, in turn, promotes economic activity it might have a chance during the 2008-2009 legislative session.  It certainly is a bill that is worth watching.