Panasonic Corp.‘s decision this spring to keep its North American headquarters in New Jersey has faced criticism about whether the millions of dollars in state incentives given to the electronics giant were too generous to keep the company in-state.
So as Lt. Gov. Kim Guadagno stood before company representatives and local government leaders Tuesday morning, she tackled those criticisms head on, saying the credits don’t amount to a corporate giveaway.
“It is not a blank check from the state of New Jersey to Panasonic,” Guadagno said. “You in fact were going to go someplace else had we not all gotten together.”
Panasonic currently has its North American headquarters in Secaucus. In April, the company announced it would stay in New Jersey and move its headquarters to a yet-to-be-constructed office tower overlooking the Passaic River, in Newark. State officials helped solidify that decision by granting the company up to $102.4 million from the New Jersey Economic Development Authority’s Urban Transit Hub tax credit program.
Guadagno said the company won’t get the money unless it follows through on its plan to move 800 employees to the new facility in 2013, and she said the move comes with the promise to create 200 additional jobs in the future. The net economic benefit to the state, she said, is $222.8 million over 11 years.
Joseph Taylor, chairman and CEO of Panasonic’s North American operations, said the company did look out of state, and had many attractive offers.
But Taylor said he was impressed by Gov. Chris Christie and Mayor Cory Booker, and it was their vision to revitalize Newark that helped win him over.
“It wasn’t the money, believe me,” he said Tuesday.
That’s not to say the incentives weren’t important to the company’s calculations, he said.
“Without the incentive, it was totally unviable. Totally unviable,” he said. “But even with the money, it wasn’t the most attractive opportunity we had, by far.”
Taylor said initially, employees were worried about losing their jobs if the company moved out of state. After the Newark relocation was announced, he said, some employees needed convincing that the Brick City was really a good place to work.
“So we want to prove to them that we had a reason for choosing Newark, and it’s not the Newark you thought it was,” Taylor said. “It’s a completely different Newark, and we’re going to be part of the effort making it better.”
Lyneir Richardson, CEO of Brick City Development Corp., said he hopes Panasonic will be a catalyst to draw other companies to Newark. In addition to the 410,000-square-foot structure that will house Panasonic, Richardson said there are seven sites in the city that are suitable for high-rise office buildings. An office tower represents a $100 million construction investment and 1,000 construction jobs, he said.
Richardson said Newark officials are fanning out across the country to talk up the city, because he said most people don’t realize Newark’s central business district has five nearby colleges, a performing arts center and a train station that’s just a short ride from Manhattan.
“The one thing that Joe Taylor did which was significant is he actually walked the central business district,” Richardson said. “So we’re trying to get more real estate decision makers and executives to just come and spend half a day here.”
Christie said the Panasonic deal is an example of bipartisan cooperation, and part of an ongoing effort to improve the business climate in a state that for years was considered unfriendly to businesses.
“The fact that not only are they (Panasonic) keeping all of their employees here and moving them to Newark, but also adding employees over the next number of years is a great boon not only to New Jersey’s bottom line,” he said, “but more importantly to New Jersey’s psyche.”