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Biggest Business Incentive Overhaul in State History Wins Final Approval

Coutinho, who says he spent months trying to incorporate the environmental lobby’s demands, did manage to work in some protections. Developers using ERG funds can qualify for greater benefits if they contribute to urban revitalization, build near transit hubs, fill vacant industrial facilities, adhere to green building design, erect markets that bring fresh produce to underserved areas, or rebuild in any of the four cities with the state’s lowest median family income, now designated as Garden State Growth Zones (GSGZ): Camden, Trenton, Passaic and Paterson. However, preservationists lament the clause that allows any land that ever housed any type of structure to be considered for redevelopment dollars -- even if the previous structure consisted of a rural shack and the new structure will house the headquarters of a multinational company.

Regional Planning

By lowering its minimum job threshold and some of its capital investment requirements and applying per-job credits on a sliding scale, GROW NJ is meant to work in tandem with ERG to help the state advance its goals for geographic and industry-specific planning. Companies in high-growth industries, like tech startups and manufacturers, for example, can qualify for credits by adding 10 jobs or retaining 25. Those who locate in the state’s southernmost counties can receive subsidies by creating as few as seven jobs and investing 33 percent less than typically required.

For a time, the South Jersey distinction divided lawmakers into northern and southern camps. But legislative leaders convinced dissenters to accept the terms to move the bill forward and appease the South Jersey contingent, whose members claim North Jersey profits inequitably from corporate investment, due in part to a more tightly clustered and less agricultural workforce.

“The new system developed in the bill finally creates an equitable formula that promotes growth in the eight southern counties -- one that reflects that region’s unique industry and population profiles,” read a statement released by senate cosponsor Donald Norcross (D-Camden).

“One size doesn’t fit all in New Jersey,” he added.

Some critics who took exception to the South Jersey exemptions also critiqued additional benefits they say appear to be specifically written for projects in Camden and Cherry Hill. One loophole allows subsidies to retail facilities in GSGZs that are at least 150,000 square feet and at least half-filled with a full-service supermarket or grocery store. It also waives the ban on subsidies to these companies whose employees work less than 35 hours per week and do not receive health benefits.

The think-tank New Jersey Policy Perspective (NJPP) calls this a “state policy that rewards the creation of low-quality jobs,” and others have suggested that it was written to benefit the developers of a ShopRite and shopping center scheduled to open in Camden in 2015.

And while NJPP approves that the revised programs offer lower eligibility thresholds to companies bringing new jobs to the state vs. those simply threatening to leave (with the exception of in-state businesses relocating after being damaged or destroyed by a federally declared disaster), the group does point a finger at a loophole that doesn’t distinguish between a new arrival and the U.S. headquarters of an automobile manufacturer located within specific areas. NJPP speculates that this clause is intended for Subaru, who’s outgrown its American base in Cherry Hill and is weighing a move to Philadelphia.

Indeed, in an interview earlier this summer, Camden County Freeholder Director Lou Cappelli lamented New Jersey’s difficulty in competing with Philadelphia’s popular Keystone Opportunity Zone program and expressed hope that Trenton lawmakers would hurry and pass legislation to entice Subaru to stay put. He said at the time, “This kind of wrangling where Pennsylvania’s actively trying to take companies from New Jersey does nothing for the region and doesn’t benefit anybody.”

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