Non-Residential Development COAH Fee Exemptions and Reimbursement Deadlines

This article is to advise developers of non-residential projects of legislation that exempts projects that receive preliminary or final approval prior to July 28, 2010 from paying the 2.5% affordable housing fee. Additionally, this alert is to advise those developers who already paid the 2.5% fee that they are entitled to reimbursement of that 2.5% fee. The deadline for applying for the reimbursement is November 25, 2009. The Statewide Non-Residential Development Fee Act (“the Fee Act”), which took effect on July 17, 2008, imposed a 2.5% affordable housing fee on non-residential development. The Fee Act made certain structures exempt from this fee including places of worship and educational institutions, which are tax exempt, parking lots, public amenities, non-profit hospitals and nursing homes. On July 28, 2009, based on current economic conditions, the New Jersey Economic Stimulus Act (“the Stimulus Act”) was signed into law. The Stimulus Act made several major changes to the Fee Act. The Stimulus Act created four additional exemptions from paying the 2.5% fee. The first exemption is for non-residential developments that receive preliminary or final site plan approval prior to July 1, 2010. The second exemption is for non-residential developments that are referred to a “planning board by the State, a governing body, or other public agency” prior to July 1, 2010. The third exemption is for non-residential developments that receive site plan approval from the New Jersey Meadowlands Commission prior to July 1, 2010. The fourth exemption is for “individual buildings within a nonresidential phased development that received either preliminary or final approval prior to July 1, 2010. For each of the above mentioned four exemptions the Stimulus Act requires that the developer obtain a construction permit prior to January 1, 2013 in order to continue to be exempt from paying the fee. Further, the Stimulus Act requires that non-residential developers receive a refund of any 2.5% fee that was paid pursuant to the Fee Act. In order to be reimbursed, the developer must submit an application to the entity to which the fee was paid by November 25, 2009. The money is then required to be refunded within 30 days of receipt of the application. However, if a developer had committed prior to July 17, 2008 to paying an affordable housing fee pursuant to municipal ordinances, that developer is only entitled to a refund of the portion of the 2.5% fee required by the 2008 Act that exceeds the fee required by the municipal ordinance. A developer is considered to have committed to paying the municipal fee pursuant to the municipal ordinance if one of the following occurred prior to July 17, 2008: 1) The developer had paid the fee required by the municipal ordinance prior to July 17, 2008; 2) The developer had signed a developer’s agreement or other written agreement with the municipality prior to July 17, 2008 obligating it to pay the fee; or 3) A board resolution approving the development adopted prior to July 17, 2008 imposed a condition requiring that the fee be paid. For additional information, please contact William F. Harrison. This alert is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. It is recommended that readers not rely on this publication but that professional advice be sought for individual matters.