The Murphy administration is touting the announced relocation of financial technology giant Fiserv into the Garden State as a prime example of the kind of business the state’s new, sprawling economic incentive package is meant to attract.
New Jersey is awarding a $109 million NJ Emerge tax break to Fiserv to renovate and open a 428,000-square-foot, four-story office site in Berkeley Heights, a Union County suburb along the Interstate 78 corridor.
It marks one of the largest incentives awarded under the Murphy administration, after the fintech giant was offered a $93 million tax break by Georgia.
Gov. Phil Murphy signs small business relief legislation and holds a discussion on the impact of COVID-19 on small businesses with Senate Majority Leader Loretta Weinberg, Assemblyman Gordon Johnson, Simply Vietnamese Owner K.T. Tran, and Ma Mi Eatery Owner Joseph Diovisalvo in Tenafly on July 21, 2021. – OIT / NJ GOVERNOR’S OFFICE
“If there is one day we’ve been working for with regard to creating an innovation-based economy, I think we should mark this one on the calendar,” Gov. Phil Murphy said during a Sept. 30 press conference outside the to-be office site in Berkeley Heights.
The company will create 1,927 new jobs, and said 1,063 jobs would have left the state had it gone elsewhere.
It marks the third business win for Murphy in September, the others being the attraction of Princeton-based SOSV’s $50 million HAX accelerator to Newark, planned for next year; and a $9.9 million tax break for Party City to consolidate several regional offices into one space in Woodcliff Lake.
All three come less than two months before voters head to the polls to decide whether to reelect Murphy or side with his Republican challenger, former state Assemblyman Jack Ciattarelli.
Murphy denied that the election timeline was at all related.
“These are companies with shareholders, they make decisions based on their own timeline,” Murphy told reporters after the Thursday event. “We said it would take six to nine months to get the rules promulgated.”
Tim Sullivan, head of the New Jersey Economic Development Authority, which oversees NJ Emerge and the state’s other incentive programs, said the jobs will be “a lot of heavy technology” to support e-commerce, and therefore coding, programming and electrical engineering, for example.
Growing NJ
Those workers would start reporting to Fiserv’s new office starting in the first or second quarter next year, Sullivan continued.
The company has three years to certify for its tax credits, Sullivan said, and six months to hash out a community benefits agreement with the township and Union County.
“We will work closely with the Berkeley Heights community to build programs … and do the things that make us a good community member,” Fiserv Chief Executive Officer Frank Bisignano said at the Thursday event.
That means coordination directly with the local schools, the establishment of a fintech lab at the nearby Rutgers Newark campus, and “programs where those students come here and learn,” he added.
“That just makes good business sense for these guys,” Sullivan said. “Newark’s 10 miles away. That’s a talent pipeline for them and an opportunity to help do some training for Rutgers-Newark, so it’s a win-win.”
Fiserv will generate a 313% economic impact over the seven years – three times the award amount – Murphy’s office said.
In January, Murphy signed the massive, $14.5 billion tax break package, which includes the seven-year NJ Emerge tax break program, capped at $1.1 billion a year.
The process largely mirrors that of Grow New Jersey, the predecessor to NJ Emerge, which required companies considering a move out of the state – or ones looking at setting up shop here – to show how New Jersey is the more expensive option in order to qualify for subsidies.
“This couldn’t be more different than the prior program,” Murphy said after the event. “The prior program … the only tool in our tool box were incentives.”
The $14.5 billion package – called the New Jersey Economic Recovery Act of 2020 – encompasses “huge investment in talent, location, quality of life,” Murphy said.
And it has a lower price per retained or new job: $6,650 per year for each of the seven years of the tax break award, and $3,325 for each of the 839 retained jobs, totaling $12.8 million and $2.8 million, respectively, for each year.
For comparison, the larger Grow NJ tax break – $260 million for Holtec International to move to Camden – awarded $658,228 per job.
