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Capitol Hill Update Highlights Key Concerns and Initiatives Impacting CRE
NEW BRUNSWICK, N.J., Feb. 23, 2022 – New Jersey Department of Transportation (NJDOT) Commissioner Diane Gutierrez-Scaccetti and NAIOP Corporate’s Senior Vice President for Government Affairs Aquiles Suarez headlined NAIOP New Jersey’s “NJ Transportation & Capitol Hill Update Webinar,” part of the commercial real estate trade association’s Building a Better NJ Series.
Michael McGuinness, NAIOP NJ chief executive officer, asked Gutierrez-Scaccetti to discuss some of the significant operations improvements taking place at NJDOT, including a reorganization of the permit access unit.
“Major highway access is a very important component of strong economic development for the state,” said Gutierrez-Scaccetti. As a result, the NJDOT is working on streamlining the permitting process and shortening the timeframe for the processing of applications, she noted. The goal is to make permits a “non-issue for the department,” by taking the process out of the capital program management group and into a local economic development division.
“We don’t want developers to take investments elsewhere,” she said. “We want those investments to stay in New Jersey and to do that, it means we as a department need to fix our process.” NJDOT’s goal is to make a difference with developers looking to invest in communities by becoming more interactive and customer-friendly while offering guidance to applicants.
NJDOT Program Attracts Talent
Among the big issues facing the real estate community is attracting talent while dealing with retirements in today’s pandemic-impacted economy. McGuinness asked how NJDOT is dealing with those challenges.
“One of the things we did was create the professional engineer design experience,” said Gutierrez-Scaccetti. The program provides opportunities for young engineers to be paired with a professional engineer mentor from the department, who will help them design small jobs in-house while accumulating design hours to allow them to sit for their professional engineer license.
“We’ve had five or six graduates who have gotten their hours and sat for their exam through the program,” said Gutierrez-Scaccetti. “It’s been very well received. It shows that we are concerned about professional development, willing to invest in our employees and will support them in their professional goals.”
New Jersey’s Infrastructure Funding
McGuinness asked how NJDOT plans to allocate the infusion of Federal monies coming for infrastructure funding. Gutierrez-Scaccetti explained that of the roughly $12 billion coming to the state only about $6.9 billion is allocated to the department for roads, highways and bridges in need of some upgrades.
“But that $6.9 billion includes what we’ve always received, so it’s not new money,” she said. Additional funds account for just over $200 million per year for five years; that Federal money won’t be available until the end of the second or third quarter.
The NJDOT team is working with the Federal Highway Administration (FHWA) and the Governor’s office on the appropriation of funds for various projects. “We have projects that are ready to go to construction, so we want to push those out,” Gutierrez-Scaccetti noted. “We are also looking at projects that are ready for final design, and then finishing projects that have lacked funding.”
Bridge repair and replacement will also benefit from a separate investment of $1.14 billion, according to Gutierrez-Scaccetti. “There are over 500 bridges in the state that are considered structurally obsolete or deficient and need work, so we are going to use that money to get as close to zero as we can.”
Logistics Industry and Public Transit
Gutierrez-Scaccetti discussed how her department is working to create better public transit that benefits people by removing cars from the roads to make more room for commercial traffic. “That to me is a big part of what we need to do,” she said. “We need to get the Gateway Tunnel built.”
“Part of this job is trying to be a visionary, and if I could look 10 years down the road to see what is beneficial for New Jersey it would be is figuring out a way to balance mass transit with surface transportation,” she added. “It’s not inconsistent to want to take cars off the Turnpike and put those commuters on to public transit because it creates more capacity for the sea of trucks that are moving up those roads.”
McGuinness noted: “New Jersey is ground zero for logistics. We are breaking records every year with the pandemic-accelerated shift to ecommerce. It’s what we’re dealing with and we have to collaborate on solutions.”
“The use of mass transit goes a long way to preserve capacity for commercial customers,” said Gutierrez-Scaccetti. “Trucks on the Turnpike kept us going during the pandemic.” Ridership on NJ Transit is slowly increasing but rail is not there yet, she noted, adding that getting the virus under control, enhanced cleaning protocols and a return to offices will be beneficial.
Capitol Hill and New Jersey CRE
Suarez addressed infrastructure funding, access permitting and other federal-level concerns impacting New Jersey’s commercial real estate industry.
Among the hottest topics, he discussed the ongoing appropriations battle on Capitol Hill, noting that the slowdown is impacting infrastructure funding in New Jersey. President Biden’s $1.2 trillion Infrastructure Law includes funding to local governments to rebuild and reinvest in their communities. To date, infrastructure programs are stalled until Congress agrees on federal spending.
“There is no one more incentivized to get money out faster than Congress right now,” Suarez said. “The money is there for the Gateway Project.” Gateway funding would include a new Hudson River rail tunnel connecting New York and New Jersey.
Another key concern for the real estate industry is the “Build Back Better” reconciliation bill (H.R. 5376), currently in the Senate, which includes tax increase provisions. “We were very successful in ensuring that some negative ideas didn’t make it into the version that came out of the House,” said Suarez. “Our posture at this point is a defensive one.”
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