James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
NJ Bans Additional Loans for Companies in Default Status
Author: James F. McDonough
Date: February 1, 2016
Key Contacts
Back
NJ Bans Additional Loans for Companies in Default Status
Recently, Gov. Chris Christie announced that he signed a new bill into law that would prohibit the state of New Jersey from subsidizing low-income property developers who defaulted on state loans. According to a report by the Washington Times, the bill was initially proposed after a company received several millions of dollars from New Jersey while in default status for previously secured loans.
The details of the new law
The governor signed the bill because he was adamant that the state should no longer be responsible for subsidizing these low-income property development companies that are either delinquent or late with loan repayments. According to a statement cited by NJ.com, Democratic Sen. Nicholas Scutari co-sponsored the bill because it was clear that a solution needed to be found.
“We cannot reward companies that are behind on payments to the state, especially when it is coming at the taxpayers’ expense,” Scutari explained. “Just like any financial institution would evaluate its risk when considering loan applications, the state must do the same.”
The rationale behind the new law
There are several companies in the state that are currently receiving loans from other agencies around New Jersey, despite owing the state government millions in loan debt. One prime example listed by the Washington Times was Roizman Development Inc., which is a Pennsylvania company that has received millions from two agencies in New Jersey while it owed over $6 million in state government loan repayments. Roizman Development Inc. was the first property developer in New Jersey to secure state loans as part of the governor’s incentive programs for low-income housing. The company then developed low-income housing in Camden, New Jersey as part of the 2013 Economic Opportunity Act. It secured a $57 million loan to rebuild 175 homes through several federal tax credits, a federal loan and $26 million in additional state construction loans from New Jersey. In turn, the project was approved for up to $23.4 million in loans and tax credits for Roizman Development Inc. over the course of the next 10 years. However, the company has been slow in its debt repayments, which spurred the state into action.
How it will impact companies in default status
Following the law’s enactment, all repayment on state government loans will be from rent for the properties. These funds will be secured from guaranteed rent payments from the federal government’s Section 8 housing program.
- Practices: Tax, Trusts & Estates
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
NJ Bans Additional Loans for Companies in Default Status
Author: James F. McDonough
NJ Bans Additional Loans for Companies in Default Status
Recently, Gov. Chris Christie announced that he signed a new bill into law that would prohibit the state of New Jersey from subsidizing low-income property developers who defaulted on state loans. According to a report by the Washington Times, the bill was initially proposed after a company received several millions of dollars from New Jersey while in default status for previously secured loans.
The details of the new law
The governor signed the bill because he was adamant that the state should no longer be responsible for subsidizing these low-income property development companies that are either delinquent or late with loan repayments. According to a statement cited by NJ.com, Democratic Sen. Nicholas Scutari co-sponsored the bill because it was clear that a solution needed to be found.
“We cannot reward companies that are behind on payments to the state, especially when it is coming at the taxpayers’ expense,” Scutari explained. “Just like any financial institution would evaluate its risk when considering loan applications, the state must do the same.”
The rationale behind the new law
There are several companies in the state that are currently receiving loans from other agencies around New Jersey, despite owing the state government millions in loan debt. One prime example listed by the Washington Times was Roizman Development Inc., which is a Pennsylvania company that has received millions from two agencies in New Jersey while it owed over $6 million in state government loan repayments. Roizman Development Inc. was the first property developer in New Jersey to secure state loans as part of the governor’s incentive programs for low-income housing. The company then developed low-income housing in Camden, New Jersey as part of the 2013 Economic Opportunity Act. It secured a $57 million loan to rebuild 175 homes through several federal tax credits, a federal loan and $26 million in additional state construction loans from New Jersey. In turn, the project was approved for up to $23.4 million in loans and tax credits for Roizman Development Inc. over the course of the next 10 years. However, the company has been slow in its debt repayments, which spurred the state into action.
How it will impact companies in default status
Following the law’s enactment, all repayment on state government loans will be from rent for the properties. These funds will be secured from guaranteed rent payments from the federal government’s Section 8 housing program.