A bill set to be introduced Monday would consolidate five incentive programs into two, according to a report this week in the Wall Street Journal. The Economic Redevelopment and Growth Grant would be kept and modified, while the Grow New Jersey program would be revised to integrate pieces of the Urban Transit Hub tax credit, the Business Employment Incentive Program and the Business Retention and Relocation Grant.
The bill calls for opening the incentives to more businesses by loosening minimum investment requirements and caps on how much the state can award, according to the Jan. 9 story. Recipients could get bonus incentives for meeting certain criteria, the story said.
Advocates are hopeful the new framework will achieve some of state’s policy goals and overcome hitches in the current incentives, said Michael McGuinness, the New Jersey chapter CEO of the development group NAIOP. He pointed specifically to Urban Transit Hub, which is designed to spur development and job growth in nine cities, “but only three were able to work within the parameters” because the bar was set too high for capital investment.
He also said the bill puts the focus on job creation, given the state’s unemployment rate.
“It’s just right-sizing it, because the amount of the capital investment you’re making in these cities doesn’t always translate into jobs,” McGuinness said. “This revised incentive program is more catered to the number of jobs being produced.”
The state enacted Urban Transit Hub in 2008 as a way to help in the nine distressed cities. The lucrative incentive has helped jump-start major projects like a new Panasonic office tower in downtown Newark and a new Goya distribution center in Jersey City.
But the program has also been criticized for allowing companies to simply move around within the state, rather than drawing new firms from outside, and for hurting suburban regions in the process. Such criticisms led to the creation of the Grow New Jersey program a year ago, which expanded similar incentives to other parts of the state.
The development industry would welcome efforts to bolster the incentives after a year in which the state “really made an impact with incentive programs,” said Robert Kossar, Jones Lang LaSalle’s executive managing director for New Jersey. He said the creation of Grow New Jersey and the rising profile of Urban Transit Hub have “been a huge driver and very important in the recovery” of the industry here.
“Once the tenants and the real estate community truly understood the impact of how these programs have worked, they were tremendously successful,” Kossar said. He later added, “I think what people are trying to do, in proposing changes, is really to take good programs and perhaps make them better. And if that’s possible to do, and there’s support on both sides of the aisle … I think that’s great.”
Besides creating jobs and spurring development, McGuinness said the new proposal also would use “bonuses” to advance policy goals like affordable-housing creation and so-called “smart growth” planning. He also called it an upgrade to the current model by offering greater rewards for new jobs and providing firms outside the state with a centralized incentive menu, rather than “a hodgepodge of programs” to navigate.
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