Throughout 2022, the New Jersey Economic Development Authority generated substantial activity, capped off by a busy December that yielded several developments, including the launch of a new cannabis grant program, major milestones for the New Jersey Innovation Evergreen Fund, $255 million in federal funds to support small businesses, more funding for the Sustain and Serve NJ initiative, the pre-qualification application process opening for the New Jersey Manufacturing Voucher Program and more.
On the heels of a productive final NJEDA board meeting for 2022, CEO Tim Sullivan spoke with NJBIZ about some of last year’s highlights while looking ahead to 2023. The conversation opened with the recent Netflix announcement, and just how big of a deal it was for the state and the community around Fort Monmouth.
“It’s hard to overstate how important the Netflix opportunity is,” said Sullivan, describing the closing of Fort Monmouth as a gut-punch and noting how disruptive base relocations and closures are. … They’re really complicated. And getting these things right is incredibly challenging,” Sullivan explained. “So, to have a big job spinner like a major Netflix facility coming is just an extraordinary outcome.”
He described the Netflix project as a centerpiece of the Murphy Administration’s strategy of bringing back and building up the state’s film and television industry. “The message is New Jersey is open for business and on the map in a huge way in film and TV,” said Sullivan. “The increase in filming activity we’ve seen the last three or four years has been great. But we always said that the big goal was to have studio production because that’s how you get durable, long-term job creation.”
At the end of December, along with the Netflix news, the NJEDA announced the award of the first-ever Studio Partner Designation to Lionsgate. The state also announced that the final tallies were in for 2021 with more than half a billion dollars spent by the film and television productions in the state, creating more than 5,500 jobs. In total, New Jersey was home to 725 productions in 2021, including 68 films and 132 TV series.
“We got something special on our hands here,” said Sullivan. “And I think that’s an enduring legacy of Gov. [Phil] Murphy’s economic strategy, which is to build a new industry here.”
To continue building the ecosystem around these productions, the NJEDA board in December approved the creation of the Film & Digital Media Studio Infrastructure Program, which will provide $9.5 million in grant funding to governmental entities for infrastructure improvements and sitework in support of developing a production facility.
Sullivan said he believes it will pivot off some of the studio projects already in the works. “Invariably, there’s going to be some sort of need, whether it’s road infrastructure, whether it’s water and sewer, whether it’s utility type stuff, whether it’s traffic mitigation,” he said. “We want to be supportive of local communities making the investments they need to do this the right way.”
In announcing that program, the NJEDA also unveiled a $10 million Construction Inflation Fund Pilot Program for real estate development projects that have experienced increased costs and funding gaps stemming from the pandemic. “We know for sure that there are projects out there that have run into some turbulence or worse because of supply chain challenges, inflation, interest rate spikes, which are certainly a COVID phenomenon,” Sullivan said.
Sullivan noted the momentum New Jersey has coming into 2023 – including the fastest private sector job creation in the region over the last 12 months – but acknowledged the potential economic turmoil ahead. He said it is important to continue making investments in sectors, such as manufacturing, cannabis, film and television, and offshore wind.
Sullivan previously discussed how important it is to not only attract and build new sectors, but to balance that by supporting traditional sectors and renewing others for a diversified economy. “When we think about a strong and diversified economy, the more industries, the more pistons you can have in the engine that are on different cycles, that means you have a stronger economy through booms and busts of any given industries,” Sullivan explained. “And that’s what we’re really shooting for.”
Sullivan placed offshore wind and film at the top of the list of sectors that have come to life under Murphy, along with cannabis, sports betting, and the technology jobs that come with it. He noted that policymakers are working hard to maintain and expand the state’s leadership position in areas like pharma, financial services and technology.
Manufacturing stands as an example of a reborn industry here after COVID exposed supply chain vulnerabilities. A major 2022 initiative was the launch of NJMVP, a $20 million program to support small-scale manufacturers.
Sullivan said the program has been well-received throughout the pre-application period. “There’s a good strong demand there, which is indicative of the manufacturing sector that both needs support but is growing,” said Sullivan. “This is a first-of-its-kind program. We’ve never really had in New Jersey this level of resources or support directly committed to manufacturing.”
Another major area of focus in 2022 was nurturing the state’s innovation ecosystem, attempting to position New Jersey as an attractive option and hub for startups and entrepreneurs. In August, HAX, the hard tech startup accelerator for VC firm SOSV, announced the signing of a lease in Newark that is serving as its U.S. headquarters. The NJEDA is a partner on the $50 million project that’s estimated to bring 2,500 jobs to Newark.
Sullivan said the project is moving ahead and has exceeded expectations. “They’ve had the first cohort of companies coming through Newark,” said Sullivan. “At least one of them has already gotten meaningful venture capital funding to take them to the next stage of their growth. That’s gone incredibly well.”
Another effort to help startups is the New Jersey Innovative Evergreen Fund, which auctions tax credits to established companies in exchange for funding and support opportunities to help startup businesses. Due to high demand for the program, the initial offer of $30 million in credits was expanded to $50 million. At its December meeting, the NJEDA board approved eight corporations to purchase the tax credits.
“This was an innovative idea,” said Sullivan. “It both supports the innovation economy, but it’s an innovative way of doing it. It’s been a home run.”
Sullivan said there are two keys to healthy, growing economies on a sustainable basis. “One is a diversified industry perspective,” he explained. “The second is scaling of young, growing companies from small businesses, five or 10 people, into 5,000 or 10,000 people. Those are the two things you’re watching for – diversification and scaling of enterprises. And between our strategies on new industries as well as Gov. Murphy’s focus on the innovation economy and scaling new young companies, we think the evidence of the success of Gov. Murphy’s strategy is incredibly strong.”
On wind, Sullivan noted in addition to the offshore projects, the Paulsboro Marine Terminal and New Jersey Wind Port could serve as hubs for the entire sector. “We continue to hear from the industry that the New Jersey Wind Port, in particular, is best in breed from an infrastructure perspective anywhere in the Northeast,” he said. “When that opens for business in 2024, we will have an in-demand asset that is supporting not just New Jersey projects, but projects throughout the entire region. … “South Jersey is legitimately well-positioned to be the capital of American offshore wind.”