BUSINESS REPORT: New Jersey – Transit Hub Tax Credit Fuels An Urban Renaissance In NJ
New Jersey’s major cities have been given a potent tool for development with the state’s $1.7-billion Urban Transit Hub Tax Credit program. The Transit Hub credit (see box below for details) is a financial tool designed to spur private capital investment, business development and employment by providing tax credits for businesses planning a large expansion or relocating to one of New Jersey’s designated Urban Transit Hubs.
New Jersey FAST FACTS
- Population (2010): 8,791,894
- Largest Cities (2010): Newark, 277,140; Jersey City, 247,597; Paterson, 146,199; Elizabeth, 124,969
- Targeted Industries: Non-Profits, Manufacturing, Pharmaceuticals, Clean Energy, Technology & Life Sciences
- Key Incentives: Partnership for Action, Economic Redevelopment & Growth Program, Urban Transit Hub Tax Credit Program, Sales & Uses Tax Exemption Program, Business Employment Incentive Program
- GDP (All Industry 2010): $487.3 billion*
*Bureau of Economic Analysis, U.S. Department of Commerce
The biggest prize to date to emerge from the program is the long-awaited rebuilding of Prudential’s corporate headquarters in Newark. The insurance giant’s landmark HQ tower has been the signature structure on the skyline of New Jersey’s largest city for almost 40 years. Several sites have been under consideration for its replacement.
In March, Prudential Financial announced it has decided to build a skyscraper for 2,000 employees on Broad Street in downtown Newark, after the company decided against developing a site blocks away near the New Jersey Performing Arts Center, according to a report in The Star-Ledger has reported.
The Newark-based insurance giant has asked the state Economic Development Authority to amend its application for $250.8 million in tax credits for a $444-million tower, which would now rise on a full block between Broad and Halsey streets. The project would redevelop 3.25 acres that now include a tower, several stores and parking lots, according to the company’s letter to the authority. Prudential owns 12 of 19 parcels on the tract and is under contract to own the rest, according to the letter.
Prudential’s tax credit is one of the biggest financial incentives awarded by the EDA. Last year, the electronics company Panasonic received $102.4 million to relocate its North American headquarters to Newark from Secaucus, and the new Revel casino and hotel in Atlantic City received $261.4 million.
Panasonic will take approximately 250,000 square feet at 2 Riverfront Center, to be developed by Matrix and SJP, at the intersection of McCarter Highway and Raymond Boulevard. Panasonic, which has committed to a 15-year lease for office space, currently employs 800 people, and expects to add an additional 250 jobs at the Newark location by 2015.
Camden County Maximizes Use of Incentives
Officials in Camden County are making use of a variety of state incentives programs to retain and expand local businesses. A good example of this approach is Puratos Corp.’s new $42-million manufacturing facility in Pennsauken. Puratos is a $1.4 billion international company with a full range of innovative products, applications and expertise in the bakery, patisserie and chocolate sectors.
Puratos has 450 employees nationally and approximately 190 based in Cherry Hill and Pennsauken. With the new, 170,000 square foot manufacturing facility, it will almost double the size of the plant, and local employment will reach 230 between the two Camden County locations. The plant will produce a variety of bakery improvers, bases, mixes, icings, glazes, fruit and cream fillings.
The NJ Economic Development Authority awarded Puratos an estimated $371,000 Business Retention and Relocation Assistance Grant. The county, through its economic development team, will assist the company in their ongoing recruitment of employees through programs at the Camden County One Stop Employment Center. Pennsauken Township helped clear their path on the local, state and county level.
NJ Urban Transit Hub Tax Credit Offers Developers/Owners/Tenants:
- Up to 100 percent of a qualified capital investment made within an eight period.
- Taxpayers may apply 10 percent of the total credit amount per year over a ten-year period against their corporate business tax, insurance premiums tax or gross income tax liability.
- Developers or owners must make a minimum $50 million capital investment in a single business facility, and at least 250 full-time employees must work at that facility.
- Tenants in a qualified business facility can represent at least $17.5 million of the capital investment in the facility, and up to three tenants may aggregate to meet the 250 employee requirement.