Planning, Real Estate & Development
The CRDA makes capital investments through bonds and loans in projects that would not attract capital in normal market conditions. CRDA investment in a project cannot replace public or private capital that would otherwise be invested in the project.
The Authority provides financial assistance for the following types of projects:
- Projects that directly serve pressing social and economic needs of local residents, including but not limited to supermarkets, commercial establishments, daycare centers, youth and senior citizen facilities, parks, and community centers.
- For projects that are part of a comprehensive plan of redevelopment.
- Public recreation and entertainment facilities, to promote the tourism industry.
- Public transportation facilities
- Convention centers
- Manufacturing, industrial, commercial, recreational, retail or service facilities.
1. In projects involving a private developer, a minimum 10% equity contribution is required.
2. Projects must be eligible pursuant to NJSA 5:12-144(f). Generally, the funds should benefit the public at large and those of low and moderate income in particular.
Projects may be deemed eligible for CRDA financing if the funds are used in the following ways:
- to further and promote the tourist industry through the creation or improvement of recreation and entertainment facilities, including arts or cultural centers, historic sites or landmarks, or sports centers;
- to house persons of low, moderate, median and middle income;
- for structures, franchises, equipment and facilities for the operation of public transportation;
- for convention halls and attendance projects such as offices, commercial facilities, community service facilities, parking and hotel facilities, or other facilities for the accommodation and entertainment of tourists and visitors;
- as financing for buildings, structures and other property that will increase opportunities in manufacturing, industrial, commercial, recreational, retail and service enterprises that will induce or accelerate employment opportunities, particularly for unemployed and underemployed persons
- for planning, developing or preservation of new and existing small businesses;
- for employment training and retraining, particularly for unemployed and underemployed persons;
- for pressing social and economic needs of the residents such as schools, supermarkets, commercial establishments, daycare centers, parks or community service centers;
- for projects that are part of a comprehensive plan to improve blighted or redevelopment areas.
3. CRDA Loan Origination Fee: 2 points
Term – Flexible
Statutory Rate – 2/3 of applicable bond index plus 5% servicing fee
4. CRDA Bond Rating Fee: $5,000 – $15,000
5. CRDA Legal Fee: $5,000 – $30,000
6. CRDA Construction Oversight, if required, up to $1,500 per month during construction, plus set up costs.
Statutes and Regulations
CRDA Notice of Proposal for Re-adoption of Rules
Notice extending comment period
- CRDA Statute NJSA 5:12-153
- CRDA Special Funds
CRDA Urban Revitalization Program
The CRDA Urban Revitalization Program, established by law in 2001, is a tax-incentive program to encourage the construction of new entertainment and retail venues in Atlantic City. The purpose is to further entice visitors to the City, as well as create new jobs and tax revenue for the State and local government.
The law allows the CRDA to approve 11 entertainment-retail districts, each of which must consist of at least 150,000 square feet of entertainment, retail, dining, non-casino hotel or residential unit space (i.e., condominiums). The developer of an entertainment-retail district can be a casino licensee, a private developer or the CRDA itself.
The incentives for the developer to establish an entertainment-retail district are:
- Sales tax rebate on construction materials to build the project.
- Annual rebate of sales taxes, up-to $2.5 million, generated on retail sales in the entertainment-retail district.
- Annual grant based upon incremental luxury tax generated in the entertainment-retail district.
In addition to the incentives for the developer, the CRDA receives, for each entertainment-retail district, an annual rebate of up to $2.5 million in sales tax generated in the district, but only after the developer’s $2.5 million rebate is paid. For example, if a district generates $5 million in sales tax, the developer and the CRDA would each receive a $2.5 million rebate. If the district generates $4 million in sales tax, the developer would receive $2.5 million and the CRDA would receive $1.5 million.
Entertainment-retail districts include eight projects including: The Walk, The Quarter and the Pier. There are three entertainment-retail districts still available.
Corridor Projects Fund
The Corridor Projects Fund was created as the result of a law passed in 1993 establishing a $1.50 casino parking fee and authorizing the CRDA to issue bonds to generate funds for transportation infrastructure and economic development projects in the “corridor region” of Atlantic City, which includes the area surrounding the main entrance into the city from the Expressway, as well as areas of heavy traffic and economic development along the multiple access routes into Atlantic City and the major thoroughfares within Atlantic City.
Revenue from the $1.50 fee is used to repay CRDA bonds issued to generate $170 million for the Corridor Project Fund, which included: acquisition and maintenance of the greenway entrance at the foot of the Atlantic City; acquisition of land subsequently leased for the Atlantic City Outlet Shops (”The Walk”); road and landscape improvements; and, and, financial assistance for the Atlantic City Convention Center and the adjoining Sheraton Hotel.
Boardwalk Revitalization Fund
A legislative change in 2004 enabled the CRDA to issue bonds to create the $100 million Boardwalk Revitalization Fund for façade improvements and other capital projects on the Boardwalk that are consistent with the CRDA’s architectural design guidelines for the Boardwalk.
The Boardwalk Revitalization Fund bonds are repaid from two sources – a portion of required Atlantic City investments for economic development and a voluntary contribution by the casinos of a portion of their parking fee revenue, beyond the parking fee that the law requires the casinos to pay for the Corridor Projects Fund and the Casino Capital Construction Fund.
This project is expected to be completed by 2010 after expending $85 million. The balance of the funds were transferred to the Debt Service Reserve Fund from uncommitted fund balances under the Boardwalk Revitalization Project, so as to satisfy CRDA’s obligations under the Revenue Bond Trust Indenture. This action was required due to the the shrinkage in credit markets that intensified during the Fall 2008.
Casino Capital Construction Fund and Atlantic City Expansion Fund
The Legislature directed the CRDA to create the Casino Capital Construction Fund and the Atlantic City Expansion Fund for non-gaming casino capital expansion projects. The legislation was in response to future competition by the approval of slot machines in Pennsylvania and New York, in 2003-2004,
This legislation increased the casino parking fee from $1.50 to $3, and established a new $3 fee on casino hotel room stays in Atlantic City. A portion of the increased parking fee is used to repay CRDA bonds issued to create the $34 million Casino Capital Construction Fund, and a portion of the new casino hotel occupancy fee is used to repay CRDA bonds issued to create the $62 million Atlantic City Expansion Fund. This fund is still active.
Casino Hotel Expansion Fund
In order to address Atlantic City’s hotel room shortage, the Legislature required the CRDA in 1993 to make $100,000,000 available for casino hotel room expansion projects. In 1996 the law was amended to require the CRDA to make an additional $75,000,000 available for casino hotel room expansion projects.
The fund has leveraged more than $1 billion in hotel expansion projects resulting in the addition of approximately 3,500 new hotel rooms in Atlantic City. Two projects are in the feasibility stage with all funds committed and the application process is closed.
North Jersey/South Jersey Projects Fund
In 2004, the Legislature required the CRDA to issue bonds to create a $31 million North Jersey/South Jersey Projects Fund for North Jersey and South Jersey (not including Atlantic City) community and economic development projects. By law, a portion of the $3 casino hotel occupancy fee is used to repay the CRDA bonds. All money from this fund has been allocated.
Source of Project Funding
In addition to other gaming-related taxes, State law gives each casino a choice: pay 2.5% of its gaming revenue to the State, or reinvest 1.25% of its gaming revenues through the CRDA in community and economic development projects in Atlantic City and around the State. Without exception, the casinos have chosen reinvestment.
Under the terms of the reinvestment agreement, each casino is required to pay to the CRDA 1.25% of its annual gaming revenues for 50 years, and the CRDA invests this money in eligible projects in Atlantic City, South Jersey or North Jersey, according to the following chart set by law. By law, the casinos are entitled to a return on their investments through the CRDA.
Each casino’s required investments by years
Years Atlantic City South Jersey North Jersey
1 – 3 100% 0% 0%
4 – 5 90% 8% 2%
6 – 10 80% 12% 8%
11 – 15 50% 28% 22%
16 – 20 30% 43% 27%
21 – 25 20% 45% 35%
26 – 30 65% 0% 35%
31 – 35 25% 25% 50%
36 – 50 0% 50% 50%
Atlantic City Projects:
The law requires each casino to invest all of its first three years of required Atlantic City investments in housing and community development projects. In years 4 through 25, each casino is required to make half of its required Atlantic City investments in housing and community development projects. In years 26-35, each casino is required to invest all of its Atlantic City investment obligations in economic development projects.