BUSINESS IN SOUTH JERSEY IS ON the upswing since the passage of the New Jersey Economic Opportunity Act (EOA) of 2013, buoyed by heightened commercial activity in Camden and Atlantic City, and promising growth in manufacturing and the food industry. That is the assessment of leaders at the New Jersey Economic Development Authority (NJEDA) and Choose New Jersey, a not-for-profit that markets the state to companies throughout the nation and around the world.
According to NJEDA CEO Melissa Orsen, from December 2013, when the first EOA approvals were granted, through March 2017, 79 projects in South Jersey have been approved under GrowNJ—the state’s primary tax incentive program for job creation and retention under the EOA—and via the Economic Redevelopment and Growth (ERG) incentive program for developers. Awards totaling $1.9 billion have been approved, associated with private investment of $2.37 billion. Orsen estimates that 5,600 jobs have been created in South Jersey, more than 6,500 at-risk jobs have been retained and more than 10,000 construction jobs have been created during this span.
The tax-credit program allows for an award equaling the amount of capital investment by the company locating or expanding in New Jersey, assuming certain job creation and retention requirements are met. Once those conditions are satisfied, the company becomes certified to receive the subsidies prorated over a 10-year period. Bonuses up to $5,000 per job, per year, are awarded for specific industries and for qualified incentive categories, such as Garden State Growth Zone, urban transit hub and distressed municipality.
Manufacturing Leads the Way. Of the 100-plus projects the NJEDA and Choose New Jersey have tracked in South Jersey since 2010, 40 percent are in the manufacturing sector—a targeted industry for per-job bonuses. Of those projects, fully one-third are in the food industry. Junior’s cheesecakes, for example, relocated from New York City to Burlington in 2015 to take advantage of much greater storage capacity and cheaper rent, among other benefits.
“By moving its operations from New York to Burlington County, Junior’s discovered that they could get a larger space at a lower cost of doing business,” explains Choose New Jersey CEO Michele Brown. “South Jersey has all kinds of assets that make it really attractive for food companies looking to serve the New York-New Jersey-Pennsylvania area.”
South Jersey Assets. The list of South Jersey assets includes access to a consumer base of 22 million people within a two-hour drive; infrastructure improvements such as the New Jersey Turnpike project that has virtually eliminated the routine bottlenecks south of Exit 8A and enticed logistics and distribution companies such as Amazon, which has opened several facilities in South Jersey; and a labor pool well-trained in customer service and shift work from experience in the casino industry. The Atlantic City Contact Center, a call center opened in October 2015 that received $33 million in EOA tax credits, made full use of that labor pool. “That was a good ‘win’ for Atlantic City,” says Brown. “It was driven by both the workforce they had that was ready, willing and able to go to work immediately, as well as the power of the [tax] incentive program.”
Camden: Holtec and American Water. Camden and Atlantic City are the two South Jersey cities among five in the state designated as a Garden State Growth Zone, a qualified incentive area under the EOA. One-third of all approved projects administered by the NJEDA since 2010 have been in Camden County.
One of the major companies in Camden benefiting from the tax subsidy program is Holtec International, an energy technology company that is the largest provider of storage and transport systems for spent nuclear fuel in North America. Holtec was approved in 2014 for $260 million in tax credits, completed construction of its 400,000-square-foot fabrication facilities in January and has begun moving in employees.
The project calls for hiring 235 new workers, retaining 160 employees and creating more than 1,100 construction jobs. The facility is located on the site of a former naval shipyard on the Camden waterfront. Holtec President and CEO Dr. Kris Singh has stated the tax credits were instrumental in the company’s decision to make a capital investment and choose Camden, New Jersey, over Charleston, South Carolina. He has said he expects the company’s employment base to reach 400 by December 2017, and 1,000 by 2020.
Another high-profile project along the Camden waterfront is American Water Company’s five-story, 220,000square-foot headquarters, which broke ground in late February and is scheduled for completion in late 2018. GrowNJ’s incentive of $164 million in tax credits helped dissuade American Water from relocating to Philadelphia. The company, currently headquartered in Voorhees, expects to hire 100 new employees and retain almost 600. Its new headquarters is part of a 20-acre, $1 billion waterfront development project encompassing office space, retail, residential units, a hotel and an 800-space, high-rise parking garage.
Atlantic City: Stockton University Island Campus. The new branch campus of Stockton University in Atlantic City has generated “momentum” for further business development in the city, EDA’s Orsen said. The complex, consisting of a seven-story, 332,500-square-foot dorm and academic space, 886-space parking garage with ground-floor retail and relocation of South Jersey Industries (South Jersey Gas) to a new 72,000 square foot headquarters, will inject more than $209 million in private investment into Atlantic City’s economy, create 167 permanent jobs and add 570 construction jobs, according to Orsen. Further, the influx of Stockton University students to Atlantic City’s Chelsea neighborhood and the presence of South Jersey Gas and its employees will spur ancillary economic activity for retailers and restaurants and increase tax ratables, Orsen explains.
Fostering Economic Growth in South Jersey. Under the previous incentive program before enactment of the EOA, companies in South Jersey counties were “at a disadvantage” to the northern counties because, on average, the projects were smaller, capital investment and the number of employees per company were lower, and thus awards were smaller for those companies, explains Choose New Jersey’s Brown. In response to this disparity, reductions were made in the amount of capital investment and the number of employees required to allow companies in South Jersey to take full advantage of the incentive program. The program modifications have been especially beneficial to business growth in Camden, she says.
“When Camden was first designated as a Garden State Growth Zone, businesses were not ready to jump in and make an immediate commitment to the city,” explains Brown. “But companies such as Campbell Soup, Subaru and Lockheed Martin were willing to make major capital investments in the city,” and others followed.