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Why they’re staying yes, staying in N.J. – Some high-profile successes offer hope to state

For UPS, there was much to like about Georgia when it came to finding a new home for the IT professionals scattered across North Jersey.After all, it’s the home state of the shipping giant’s global headquarters — and the company’s chief information officer already works there. Not to mention the buildable, vacant land the company owned near its existing data center in the city of Alpharetta.

There was just one important consideration.

“We could have easily put something up on property that we were holding at the time,” Stephen Parziale, controller of UPS Inc., said during a recent panel discussion. “(The) problem for us — and it was a big one — was the quality of the workforce.”

“We have IT people (in New Jersey) that are the highest quality. We did not feel that we could replace them. A lot of them are baby boomers and probably would not have made the transition down to Georgia. So retention for us was a big deal.”

It was a major factor in leading UPS to build its new IT hub in Parsippany, along with a promised $40 million tax credit from the state. For business leaders, it was a success story about a high-profile company that stayed — keeping some 900 employees here — after a four-year stretch that saw the likes of Roche, Hertz, Sealed Air and Mercedes-Benz announce they would leave New Jersey.

And it’s one of several stories that may be helping them change the conversation: Rather than trying to explain why companies have left, they can now relish in answering, “Why did they stay?”

It was the focus of an event hosted early this month by the Newark Regional Business Partnership, which featured Parziale and executives from other large employers that picked New Jersey over competing states. In some cases, the Garden State’s workforce and proximity to a huge population was a critical factor; in others, it was the state’s recently revamped incentives.

“(The Lehigh Valley) was at the top of our list for a while,” said Joe Schinco, associate director of the meal kit company HelloFresh. “In particular, their workforce there was very skilled, very experienced in our type of pick-and-pack warehouse operations.”

But a 10-year, $25.1 million Grow New Jersey tax credit helped compel the company, which has outgrown its facility in Linden, to locate new distribution and call centers in Newark. The company has signed leases for the facilities and is in the midst of the permitting process.

The promise of tax credits doled out by the state’s Economic Development Authority has long been a source of controversy, even as other businesses have fled the state. But like HelloFresh, many recipients have started to move forward with their plans — and some are now collecting their tax credits as they fulfill the job commitments they offered in return.

For example, in Camden, both Cooper Health System and the internet marketing firm Webimax have finished facilities and retained a total of more than 400 jobs, according to the EDA. Together, they have created an additional 52 jobs in return for Grow New Jersey awards of nearly $40 million and about $6 million, respectively.

Such tax breaks have become increasingly important, following an overhaul of the state’s incentive programs in 2013. But experts say they are just one of the factors that keeps New Jersey in the game, with competition becoming as fierce as ever.

“In the world in which we live, with telecommunications as it is and with technology advancements accelerating at an ever-quickening pace, companies truly are portable,” said Ted Zangari, a real estate attorney with Sills Cummis & Gross P.C. “And they’re portable to not only stay in New Jersey or not, but they’re portable to the degree that they don’t need to stay in the region or even the country.

“They could be half a world away and it wouldn’t matter very much to their bottom line day in and day out.”

And for anyone who thinks dollars and tax breaks are king, former EDA executive Margie Piliere pointed to the recent news that General Electric was moving its headquarters from Connecticut to Boston.

“Boston is expensive — it’s more expensive than Connecticut — so, in the end, cost mattered, but skilled workforce and proximity to that workforce mattered the most,” said Piliere, now chief economic development officer for Choose New Jersey. “I think that’s what we see every day.”

New Jersey’s competitive workforce is one thing that keeps it in contention. It’s also one reason the state has been able to answer another question: “Why did they come?”

Richard Goldman, president of the jewelry manufacturer Frederick Goldman Inc., is moving ahead with plans to bring 214 jobs from Manhattan to a 60,000-square-foot facility in Secaucus. In considering where to relocate his business, Goldman placed a premium on being able to attract young professionals such as those with a tech background.

“We think we can get those digital people … all out in New Jersey and from the areas of Hoboken because that’s where the kids are,” he said. “We also think there’s a hip factor in Jersey City that’s going on, so we think we’re going to be able to attract those young professionals.

“I am not as worried about attracting accountants who are 40 years and up and have a family. They’re plentiful in New Jersey.”

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

Joshua Burd

NJBIZ Business Events