Gov. Phil Murphy’s pick to head the board of the embattled Economic Development Authority signaled his support for a set of economic incentives which could ultimately replace the controversial, multi-billion dollar Grow New Jersey tax breaks that the agency is charged with overseeing.
Kevin Quinn, a former Goldman Sachs executive (like Murphy) and now chair of the EDA’s board of directors, in a phone interview with NJBIZ suggested his partiality toward “what’s more consistent with what the governor has stated about the focus on how we create an innovation economy, which almost by definition will focus on small to medium-sized businesses.”
“If they are the largest employers in the state, how do we increase the probability of those businesses being successful? And so that gets me really excited,” added Quinn.
Murphy wants his proposed economic incentives – five separate programs capped at $400 million a year – to replace Grow NJ, much to the opposition of ardent supporters such as Senate President Stephen Sweeney, D-3rd District, a political rival of Murphy.
The governor said those five new incentives will make New Jersey the “State of Innovation.” They include a heavily reigned in version of Grow NJ called NJ Forward – capped at $200 million a year – and a so-called Innovation Evergreen Fund, where the state and private venture capital funds would finance start-ups eyeing a move to the state and split the investments 50/50.
The exact programs the state adopts, and which the EDA administers, would not be up to Quinn and the agency — they would instead have to be hashed out and determined by Murphy and the Legislature, and before Grow NJ expires on July 1.
Quinn has been on the job less than three weeks following his appointment by Murphy in late April. The governor had attempted to clean house of four other board members, all Christie appointees, but backed off following their resistance.
Sweeney criticized those removal attempts and told NJBIZ in April that he plans to renominate three of the board members when their terms expire this year.
The governor appointed Quinn, 54 and the founder of investment firm Genki Advisory, as the board chair soon after securing the resignation of the prior chair Laurence Downes, chief executive officer of New Jersey Resources, parent company of New Jersey Natural Gas.
Quinn admitted that the EDA had never been under this kind of public scrutiny — extensive press coverage, heightened focus by lawmakers, multiple task forces and strong condemnation from activists statewide.
“My impression is, nobody brought to my attention, like ‘oh yeah, this is just like in 2012, or this was what it was like in 2004’, and there’s a lot of old-timers, people who have been with the EDA for 10, 20 or 30 years,” Quinn said.
Murphy unveiled a task force in January to scrutinize how Grow NJ was crafted and how corporations applied for and received tax breaks, created on the heels of an audit from the state comptroller which found lax oversight by the EDA of Grow NJ, including in how it awarded the tax breaks and monitored compliance.
“We have kind of concentric circles of things that I can influence. The thing that I could most immediately influence is the board of the EDA,” Quinn said. “The next concentric circle that I can influence is the staff of the EDA.”
Addressing the lax oversight highlighted in the audit – that the state could not certify recipients of billions of dollars of tax breaks created the agreed-upon jobs and economic activity – would start with him and EDA CEO Tim Sullivan.
An April WNYC report shed light on a now-settled whistleblower suit filed in 2015 by former EDA staffer Veyis “David” Sucsuz, who alleged he was fired for resisting pressure from the Christie administration to falsify data from tax break applicants so that they would be eligible for the credits, as part of several legally questionable efforts to churn out approvals for tax breaks.
“This is not a year-long consulting, this is stuff that’s going to have to happen relatively quickly,” Quinn said.
The task force, in early May, honed in on how corporations, businesses and lobbying firms with strong ties to insurance executive and South Jersey powerbroker George Norcross crafted the Grow NJ program to benefit themselves, or unethically won the lion’s share of the tax breaks for moving to Camden.
Many statewide activists from groups across the state, as well as Camden residents and community advocates, filled the EDA board room at the Tuesday morning meeting, and over the course of nearly two hours of public comment demanded greater transparency in how tax break applications are reviewed, scrutinized and awarded.
City activists lamented how the tax breaks helped fill the coffers of massive, Norcross-linked corporations while providing no benefit to the city, be it lack of tax revenue or of any improvements to infrastructure and local services, failure to hire city residents, and lagging improvement to the city’s schools.
For them, the city has been no different than before any of the redevelopment and new corporate headquarters, despite assurances from proponents of Grow NJ that the program has led to an economic boom in the city. Several activists said they would organize a bus tour of the neighborhoods of Camden away from the redeveloped waterfront, to highlight communities that they feel reflect the reality of the city.
Quinn, when asked at the meeting Tuesday, said he would be willing to take part in the bus tour, which activists envision happening in early June.
“I absolutely want to go, how can I not want to go to Camden, after hearing what people had to say today,” Quinn later told NJBIZ.