The Murphy administration has been gradually whittling down the last of the 24 applicants who applied for tax breaks under New Jersey’s controversial and now-expired incentive programs, NJBIZ has learned.
As of Oct. 29, the Economic Development Authority was looking at eight applications for Grow New Jersey tax breaks and another 11 for the Economic Redevelopment and Growth gap financing program, according to EDA spokesperson Virginia Pellerin.
Applicants were knocked off the list “due to incompleteness, ineligibility, or withdrawal,” she said.
Businesses made a dash in late June to apply for Grow NJ and ERG incentives before the July 1 expiration, according to public records. There were a total of 24 applications submitted – five in May and the rest after June 14 – according to public records. Of that amount, 17 were Grow NJ applications and the rest were for ERG.
A Senate task force evaluating the state’s corporate tax break programs met for the first time on July 29, 2019. – DANIEL J. MUNOZ
All told, they would be the last businesses that received money under the ERG and Grow NJ programs.
A 25th application was submitted by Borden-Perlman Insurance Agency Inc. on May 1 for a Grow NJ grant, but it withdrew the application.
Gov. Phil Murphy let both incentives expire after media coverage and a task force he put together to scrutinize the incentives focused on the potential lack of oversight of the programs, and how they may have been crafted to benefit certain politically connected actors.
The New Jersey Attorney General’s Office already made a criminal referral on the incentive, while federal officials are investigating how incentives were awarded to businesses in Camden, where more than $1 billion in incentives were awarded to companies with ties to South Jersey political powerbroker George Norcross.
“The NJEDA is in the process of reviewing each application for completeness and performing due diligence, and as applications are deemed ready and eligible, will proceed with presenting them to the board,” Pellerin added.
The EDA has not disclosed how much each applicant is seeking, and many applicants that NJBIZ contacted would not disclose that information, or simply did not respond.
A closer look
Baye Adofo-Wilson, the chief executive officer at BAW Development – which along with RPM Development makes up Hinchliffe Master Urban Renewal LP – said that Hinchliffe is seeking to seek a roughly $50 million ERG grant for the $76 million restoration of the 7,800-seat Hinchliffe Stadium in Paterson.
The development includes 75 units of housing, a pre-school, a 314-space parking deck, restaurants, exhibition space and a local hall of fame.
Nokia of America Corp. submitted a Grow NJ application on June 26, according to public records. They currently have a headquarters in Murray Hill.
“The state decided not to move forward with NJEDA board approval as the application included preliminary work estimated costs and projections,” said Nokia spokesperson Eric Mangan.
Hospital Central Services Inc., which submitted a Grow NJ application on May 31, withdrew its application according to President and Chief Executive Officer Peter Castagna, who said, “we felt there was a strong likelihood that it would not be approved.”
An application that Kinkisharyo International LLC submitted to the EDA on June 20 for Grow NJ was rejected on Oct. 22 “for lack of proper signature,” according to Matt Stanton, a partner at MBI, which was planning to partner with Kinkisharyo for work on the Hudson Bergen Light Rail.
“We are moving on. Not resubmitting. Done,” he said in an email.
Riverton in Sayreville will be one of the largest mixed-use projects in New Jersey history. – NORTH AMERICAN PROPERTIES
Sayreville Seaport Association Urban Renewal LP – the developer for the $2.5 billion Riverton Waterfront development in Sayreville off the Garden State Parkway – submitted two ERG applications on June 13. A spokesperson did not disclose the amount they are seeking. But, the withdrawn application submitted in 2014 was for a $223 million ERG grant, and for a much lower capital investment of $1.16 billion.
Had the EDA approved their application, it would have been one of the largest tax breaks in state history, behind a $390 million ERG grant for the American Dream Mall in the Meadowlands, a $260 million ERG grant for the now-Ocean Resort Casino in Atlantic City, a $260 million Grow NJ grant for Holtec International, and a $224 million Grow NJ grant for JPMorgan Chase Bank.
The Paterson Parking Authority submitted an ERG grant application on June 28, but it is not clear what amount it is seeking.
In June 2018, the Murphy administration granted Paterson a one-year extension to apply for $130 million of ERG grants on the table for the city’s development. They since awarded the parking authority a $30 million ERG grant for transit development around one of its train stations, but city officials have yet to take advantage of the remaining $100 million.
ABC Ownership LLC – the developer behind a $138 million Atlantic City roller coaster project known as the PolerCoaster – applied for an ERG grant on June 27. It was awarded a $38.4 million grant for the project in 2017, but the project has met continual delays since then.
The EDA has so far taken the controversial step of slowing down tax break payments for 130 companies while they more thoroughly vet data those businesses submit on job creation, to make sure those companies are actually following the rules.
In September, the EDA released $52.7 million in payments to 31 companies whose awards will total $533 million over their decade-long lifetime. Only 10 projects spanning $11.6 million under Grow NJ were paid last month, and 21 projects spanning $41.2 million ERG dollars.
Tim Sullivan, head of the EDA, which oversees Grow NJ and ERG, maintained that the new process has been in response to increasing questions over whether the agency conducted thorough oversight of the multibillion-dollar incentive program if any at all in some cases.
