New Jersey law bans subsidies for firms in default on loans
TRENTON, N.J. (AP) — Gov. Chris Christie signed a bill into law Wednesday that prohibits New Jersey from subsidizing developers who are in default on previous state loans.
The Legislature this year unanimously passed the measure proposed in May after The Associated Press reported on a firm that secured millions more from the state while in default on a previous loan.
In typical fashion, Christie signed the bill without comment. Democratic Sen. Nicholas Scutari, the bill co-sponsor, said in a statement afterward that “it is financially irresponsible to provide companies that have failed to repay previous loans or subsidies with new ones.”
Roizman Development Inc., a Pennsylvania company headed by a major political donor, is receiving millions from two New Jersey agencies to renovate low-income housing it has owned for decades despite owing more than $6 million on a previous unpaid state government loan.
Company president Israel Roizman refused to answer questions about the financing for the AP report, and did not respond Wednesday to a request for comment on the new law.
Roizman was the first developer to take advantage of incentives aimed at creating low-income housing in Camden under the state’s 2013 Economic Opportunity Act. The $57 million deal to renovate 175 homes was funded by a mix of federal tax credits, a federal loan and a $26 million state construction loan. The project also includes state tax credits that were approved last year for up to $13.4 million over 10 years.
The loans will be repaid from rent — $946 for a two-bedroom unit and $1,348 on a three-bedroom — that is subsidized and guaranteed by the federal Section 8 housing program.
Roizman, who owns affordable housing developments from Buffalo, New York, to Fort Lauderdale, Florida, has contributed $800,000 to federal candidates and political action committees over the years and nearly $100,000 to New Jersey campaigns.
While he has supported mostly Democrats, Roizman also has contributed to Republican causes — including $10,000 to the Republican Governors Association in October 2013, just before Christie became its chairman, and another $10,000 last year when Christie was at the helm.