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NJ E conomic I ncentives By Lee Winter, WRE Consulting Why have more companies not capitalized on NJEDA economic incentives?
J
ust over three years ago, New Jersey’s Economic Development Authority (NJEDA)
occupy space in a modern, class A office building on the Jersey waterfront rent free
subject to this tax. Key Issues: At-Risk: A company must
the incentives are approved. Timing: Incentives are complex – allow time for assembling and compiling the submission as well as for the NJEDA’s due dili- gence. Companies should start the incentives process 4-6 months prior to the time it expects to sign a lease or purchase contract. Minimum Jobs: Quali- fying job thresholds range from a low of 10 new jobs for manufacturers to 50 jobs for an existing NJ office user. Capex Thresholds: 1. Thresholds for capital ex-
penditures are now on a psf basis. Office thresholds are $40 psf for renovation to $120 for new construction and industrial thresholds are $20 for renovation to $60 for new construction. There are many more de- tails and considerations to know. Additional informa- tion and program details are available at our website. Lee Winter is a princi- pal at WRE Consulting. He has been in the economic incentives field for over 20 years in both the public and private sector. n
completely r e v amp e d its economic incentives. The goal was to not only create sim- pler incen- tives, but to
“Economic incentives can be worth as much as the rent yet many companies do not take advantage - incorrectly assuming that they will not qualify”
for 10 years! Tax Credit - Incentives are tax credits taken against the NJ corporate tax. Im- portantly, credits can also be sold if a company is not
demonstrate that the proj- ect is “at risk” of not going forward “but for the incen- tives” and may not make any commitments, for example signing a lease, until after
Lee Winter
also make NJ more competi- tive with neighboring states. Ultimately, the legislation grew to 82 pages. Simple? No. Powerful? Absolutely. The mo s t impo r t an t change is that smaller com- panies can now get the same incentives as the larger ones because the qualify- ing thresholds have been lowered. New Jersey now has the most powerful in- centives in the country and WRE Consulting has helped many companies to obtain these complicated but game changing incentives. The economic incentives can be worth as much as the rent yet many companies do not take advantage - incor- rectly assuming that they will not qualify. These in- centives truly are available for all companies large and small, already in New Jersey or new to the state. We have even obtained incentives for a 10-person company! Over 200 companies have been ap- proved for economic incentives valued at over $4 billion but the question is why have more companies not capitalized on this great opportunity? The answer may be that there is still a great deal of skepti- cism to overcome because in the past, incentives were only awarded to large corporations. For example, when WRE Consulting was mentioned in a Wall Street Journal article about a client who moved 100 employees to NJ in return for $15 million in economic incen- tives, our phones and email were buzzing from people who read the article and the com- ment most often heard was “I didn’t know a company our size could qualify.” Value Per Job - Incen- tives vary tremendously but typically range from $30,000 to $90,000 per job over 10 years. For office users, in- centives are typically worth $40 psf. Factoring in the incentives, a company could
We specialize in obtaining economic incentives on behalf of companies
December 2016
June 2016
October 2016
$2.5 million
$18 million Grow NJ Incentives, Low cost financing
$3 million
NY Excelsior grants
Grow NJ Incentives
July 2014
December 2015
August 2014
$15 million Grow NJ Incentives Tax exempt financing
$50 million
$12 million
NY Excelsior grants Real estate tax abatements
Grow NJ Incentives
Sales tax exemptions Reduced cost energy
• Tax Credits • Sales Tax Exemptions
• Financing • Grants
• Real Property Tax Abatements • Energy Cost Savings Programs
422 Morris Ave. • Summit, NJ 07901 • 27 Whitehall St., New York, NY 10037 • 212-535-5574 • Lee.winter@wreconsulting.com
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