Trying to Repurpose NJ’s Empty or Underused Strip Malls and Offices

Colleen O'Dea, Senior writer | October 12, 2018 | Planning
There’s a new grant program for municipalities to redevelop ‘ghost malls’ and underutilized commercial properties

Credit: Mike Kalasnik/Flickr
Mall Burlington Center Mall
With vacant strip malls and office buildings littering the New Jersey countryside, the state’s economic assistance agency is now offering some help to communities stuck with these eyesores.

The state Economic Development Authority yesterday announced a new pilot program, the 21st Century Redevelopment Program, to give grants to municipalities looking for ways to redevelop or repurpose empty or underutilized commercial and retail properties.

Reinvigorating so-called “ghost malls” and half-empty office complexes has become a major concern of planners and local officials who want to keep their communities vibrant and prosperous and keep properties on the tax rolls. And these grants, while comparatively small at a maximum of $50,000 each, mark a shift in focus for an agency that spent most of the last eight years providing hundreds of millions of dollars in tax incentives to attract large employers to New Jersey or keep them from moving out.

Tim Sullivan, the authority’s CEO, said the new grants are meant to provide “an opportunity for communities to focus on creative ideas for repurposing dormant properties in ways that contribute to the economy rather than drain valuable resources.”

New ideas for old buildings

Many municipalities across the state have found themselves home to vacant storefronts and malls and half-empty office buildings due to changes in work and shopping habits. Online shopping has brought the demise of many retailers — New Jersey-based Toys“R”Us closed all of its stores earlier this year and reports are that the iconic Sears company is facing bankruptcy. Suburban office space, in particular, was hurt by the recent recession and has not fully recovered, while more and more businesses now choose to locate in cities and urban areas.

“This is a terrific way to get suburban areas to think and plan creatively about how to repurpose an obsolete asset,” said Peter Kasabach, executive director of New Jersey Future, which supports the program. “This program invites municipalities to chart the best course of action to resolve the question of what to do with properties that no longer serve local needs in their current form.”

The issue was the focus of a forum last month at Rutgers University’s Bloustein School of Planning and Public Policy, which explored examples of how communities across the country have turned old office parks and malls into more attractive, walkable neighborhoods and, in some cases, restored former wetlands back to their natural states.

Tim Sullivan, CEO of the NJ Economic Development Authority
Sullivan sees these EDA grants as a way for New Jersey to not only help some communities deal with their white elephants, but also to foster projects that work and could be replicated elsewhere in the state. “Our expectation is to not only provide funding that will help address a particular community’s specific challenges, but also identify strategies to share with similarly situated communities,” Sullivan said in a statement announcing the grants.

Part of the Murphy plan

The grants are designed to meet Gov. Phil Murphy’s goal to invest in communities, as expressed in his economic plan unveiled last week. The plan seeks to create by 2025 300,000 new jobs, many in the innovative technology sector, and use a $500 million state-led venture capital fund for investments, as well as to overhaul the state’s major economic-development tax-incentive programs to jump-start growth statewide. Suburban offices and shopping malls that boomed during the 1980s and 1990s have since become empty as several demographic and economic trends have led to an outmigration of jobs and population. Communities that are home to these empty properties are experiencing loss of tax revenues, costs of maintaining infrastructure and roads around these properties, and a lack of resources to solve these issues.

“In some cases, these sites can be integrated into the community fabric and contribute toward creating or improving a vibrant, walkable, mixed-use place,” Kasabach said. “In other cases, misplaced assets located far from infrastructure, transit and existing centers can be re-purposed for less intensive uses or even returned to a natural state.”

The 21st Century Redevelopment Program will provide up to $250,000 in the form of planning grants of up to $50,000 per recipient. Communities can apply for projects involving vacant or underused retail and commercial spaces and use the money for a number of purposes, including: determining the costs of retrofitting, redeveloping or regreening a property; expanding affordable and multi-family housing; attracting employers and a diverse workforce; promoting walkable neighborhoods; improving livability and healthy outcomes for the population.

First-come, first-served

The EDA plans to award grants to those applications that meet minimum requirements on a first-come, first-served basis. As a condition of funding, grantees will be required to participate in at least two events hosted by the EDA to share the lessons they learned from the planning process to assist similarly situated municipalities.

Meanwhile, the EDA also announced it will provide a second round of funding for another new program, the Innovation Challenge. This will spend up to $500,000 in grants of up to $100,000 each for municipal plans that seek to grow or expand clusters of dynamic companies, encourage the growth and expansion of incubators and other innovation-supportive real estate spaces, or provide training in such STEM fields as technology and engineering.

The first Innovation Challenge gave $100,000 each to nine municipalities for unique business development projects.