Regional business incentives have long been an important influence enticing corporate leaders to come to – and remain in – New Jersey. Unfortunately when both the Grow New Jersey Program and Economic Redevelopment & Growth Program ended on July 1, 2019, the popular attributes that had traditionally helped in recruiting and retaining companies in the state ended as well.
While international companies focus more on proximity to transportation and availability of an educated workforce rather than on local incentives, small and mid-size companies do take financial inducements into consideration when making decisions regarding relocating out or remaining in the state.
The front page of the Grow New Jersey Assistance Program for large businesses website boldly states, “Businesses that are creating or retaining jobs in New Jersey may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (award amounts vary based on applicable criteria.)” What could be more motivating?
With New Jersey’s reputation for high taxes and other economic challenges, the economic incentives played a critical role for Choose New Jersey and other organizations involved in helping attract businesses to the Garden State as well as to foster enthusiasm around redevelopment in some of the state’s more compromised cities. Whether an inbound company was interested in loans, grants, or tax incentives, New Jersey offered a comprehensive menu of options. All of these contributed to a robust real estate sector across the state, including places like Camden, Paterson, Trenton or Newark.
But the current landscape is different.
A slow down in economic growth over all is the big concern today. Alexander Heil, Chief Economist for the Port Authority of New York and New Jersey, summed it up well when he noted: “We are not going to be seeing as much economic growth in 2019, both nationally and regionally.”
Tom Bergeron, Editor of ROI-NJ, was the panel facilitator at a recent NAIOP event, noted, “Incentives, or the lack thereof, seem to be hurting real estate and the way businesses outside the state view us.” Chris Paladino, President of DEVCO, concurred, saying, “There are going to be incentives, probably something this spring, and they will likely be broader than was first proposed. But there has been some damage done, including to the reputation of the New Jersey Economic Development Authority (EDA). I’m fearful that when we do have incentives, we will have a long climb back.” The panelists concurred that “incentives are critical to redevelopment …and the lack of incentives come at a cost.”
