New Jersey Pays $102 Million to Move Electronics Firm Down the Road
The tab was $102 million dollars.
That's how much New Jersey taxpayers just ponied up to move one well-known electronics company 9 miles down the road.
Panasonic signed a 15-year lease to move to Two Riverfront Center in downtown Newark from Secaucus, N.J., after being in the market and fielding offers for a new corporate home from states including Georgia, California and New York.
CEO Joseph Taylor said at a press conference following the lease signing that the incentives are what enabled business giant Panasonic to remain in the Garden State.
"Like some other major electronic companies, Panasonic faces the same demanding economics that led those companies to leave the state of New Jersey and move across the country," Taylor said. "We're keeping 1,000 jobs in New Jersey; we're keeping our employees here."
The funding falls under a tax credit program called the "Urban Transit Hub Tax Credit," which is intended to develop blighted areas accessible to public transit by giving corporations that employ at least 250 full-time workers incentive to build or rent office space in or near nine designated urban transit communities, one of which is Newark.
Secaucus is not covered under the program. The town of Secaucus and the company's current landlord sued the state this year, saying the incentives were given out improperly. The state contends it simply could not afford to lose the Panasonic jobs.
Some policy groups in New Jersey argue that the transfer is a misuse of the tax credit program. Bill Holland, Coordinator for Better Choices for New Jersey, said the money is better spent on other critical services in the state.
"We think that at a time where the state is cutting funds for teachers, for firefighters, for police,resulting in dramatic decreases in public safety, and we're watching transit fares increase by 25 percent last year, that giving $100 million to a corporation to move their headquarters one train station down just doesn't make any sense."
Deborah Howlett, director of New Jersey Policy Perspectives, adds that Panasonic received just one in a string of tax breaks doled out by Gov. Chris Christie.
"Along with the grant to Panasonic, the state has given away $822 million in tax breaks over the next 10, 12, 15 years to corporations. That's a huge expense by the state. We believe that there were better choices that could have been made with what to do with that money, including funding education," Howlett said.
Christie defended the decision at a press conference at the Meadowlands Sports Complex in East Rutherford last month, saying tax breaks like the one offered Panasonic are necessary to keep high paying, white-collar jobs in New Jersey and "stay competitive with other states."
After listing other corporate recipients of tax incentives in his state, including Bayer, Honeywell, and Revel Casinos, Christie stated that there will be many others to come.
Christie describes his administration's aggressive efforts to create and retain jobs through corporate tax breaks as "leading to a renaissance in terms of (New Jersey's) private-sector job growth."
"We've got private-sector job growth going very well in this state, we need to get it going even better, and so Panasonic is just another one of those pieces that we've been working on," he said.
Panasonic officials said that commercial real estate developers SJP Properties and Matrix Development Group will begin construction on a new 280,000 square foot sustainable high-rise facility this summer. The company also expects to move from Secaucus to what will be known as Two Riverfront Center before April 2013.