Partnering with Municipalities
For Economic Development
State Resources
May 3, 2012
Margie Piliere
Director-Finance & Development
EDA
&
New Jersey Partnership for Action
2
Partnership for Action
State, County
and Local
Partners
Lt. Governor
Kim Guadagno
New Jersey
Business
Action Center
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EDA
New Jersey’s “Bank for Business”
• Small Business Assistance
• Incentives to Retain and Grow Jobs
• Incentives to Redevelop Communities
• Clean Energy Financing
• Assistance to Bio/Tech Firms
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Results
YTD 2011*
YTD 2010
Total Projects Approved
90
63
Total Amount Approved
$223.1 million
$76.9 million
Capital Investment
$707.2 million
$308.4 million
17,215
6,131
Est. New and Retained Jobs
*Total Business Incentives Activity through December 13, 2011 EDA
Board meeting (BEIP/BRRAG/STX).
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Choose NJ
Mission:
CNJ is an independently funded and operated 501(c)(3) nonprofit
corporation created to encourage and nurture economic growth throughout
New Jersey, including a focus on making the state’s most distressed cities
engines for growth and opportunity.
Leadership and Funding
• 16-person Board of Directors oversees program;
• Leaders of a broad range of NJ organizations, Fortune 500
companies and privately-held enterprises;
• Board has pledged nearly $7 million over three years to launch effort.
CNJ is attracting business to NJ by:
• Positioning NJ as a world-class leader in the competitive global market;
• Championing the State’s economic development initiatives;
• Creating a surge of awareness that NJ is a state that “means business”
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Business Action Center
A “One-Stop-Shop” for Business
• A business advocate focusing on retention and attraction;
• Identifies and matches State programs and resources to
business’ needs;
• Provides site selection services;
• Maintains databank of available properties;
• Assists with permitting and regulatory issues;
• Advances global competitiveness of New Jersey Companies;
• Provides trade assistance and support.
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Making New Jersey a Home for Growth
Governor Chris Christie’s Economic Development Initiatives
Tax Environment
•Vetoed income tax rate hike;
•Allowed corporate business
tax surcharge to sunset;
•Signed 2% property tax cap;
•Enacted a single-sales-factor
formula and provided for
loss carry-forwards;
•Reduced minimum business
tax paid by Subchapter S
Corporations 25%.
•Increased R&D tax credit to
100 percent.
Regulatory and
Legislative Climate
Aggressive
Outreach
•Established Red Tape Review
Commission;
•Created the Office of
Economic Growth and Green
Energy at DEP;
•Signed BRRAG measure;
•Signed measure to enhance
ERG and HUB;
•Advanced new State
Strategic Plan.
•Unveiled the Partnership for
Action;
•Launched Proactive Business
Calling Plan;
•Lt. Governor Embarked on
Statewide “100 Business
Tour;”
•Launched the Talent
Network Initiative through
the Department of Labor.
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Financing
Small, Mid-Sized Businesses and Not-For-Profit Organizations
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State Small Business Credit Initiative (SSBCI)
• In October 2011, Governor Christie and Lt. Governor Guadagno announced
that New Jersey was allocated $33.8 million in funding through the SSBCI,
part of the Federal Small Business Jobs Act of 2010.
• The intent of the program is to create jobs and strengthen state lending
programs, which mirrors New Jersey’s recent efforts to enhance its support of
the state’s small business community.
• The funds will be received by the New Jersey Department of Treasury in three
tranches over two years, based upon at least an 80% commitment of the first
and second distributions.
• Through an MOU, the EDA will use the funds to deploy loans, credit
guarantees and loan participations through its existing lending programs.
Funds will be targeted to small businesses, small manufacturers, and women
and minority-owned enterprises, with a particular focus on businesses that are
located in underserved communities throughout New Jersey.
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Citibank Affinity Program*
IF YOU ARE: A New Jersey-based business with annual sales of approximately $5$50 million that is either looking to or currently engage(d) in international trade, can
commit to job creation/retention in New Jersey (One job per $50,000 of Authority
exposure), and have been in business for at least two years
AVAILABLE ASSISTANCE: $50 million in low interest Citibank loan financing with
$10 million EDA guarantee.
TO BE USED FOR: Equipment loans and Real Estate.
MAXIMUM AMOUNTS:
EDA will guarantee up to 50% of the Citibank loan, not to exceed $1.5 million.
EDA will guarantee up to 50% of Citibank line of credit, not to exceed $500,000.
Maximum EDA exposure per borrower/related entities is $2 million.
*This program is scheduled to launch in March 2012.
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Statewide Loan Pool
IF YOU ARE: A New Jersey-based business that creates or maintains jobs, located
in a financially targeted municipality, or representing an industry which the EDA has
targeted for assistance, including manufacturing, industrial, high-tech and more.
AVAILABLE ASSISTANCE: Your financial institution can request a participation
and/or guarantee through the EDA.
TO BE USED FOR: Fixed assets and permanent working capital.
MAXIMUM AMOUNTS:
EDA can participate in or guarantee up to 50% of a bank loan. The maximum EDA
exposure is:
Fixed Assets
Loan: $1.25 million
Guarantee: $1.5 million
Total Exposure: $2.75 million
Working Capital
Loan: $750,000
Working Capital Guarantee: $1.5 million
Total Exposure: $2.25 million
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Main Street Assistance Program
This program provides financial support to commercial banks in New Jersey
to provide financial assistance to small and mid-sized businesses and notfor-profit organizations with projects in the State.
IF YOU ARE: A small or mid-sized business or not-for-profit organization in
operation in New Jersey for at least two years and need financing.
AVAILABLE ASSISTANCE:
Direct loans/Loan participations up to 25% of the total financing (not to exceed $1
million for fixed assets and $750,000 for working capital).
Loan guarantees up to 50% of a bank loan (not to exceed $2 million for fixed assets
and $1.5 million for working capital).
Line of credit guarantees up to 50% of the line of credit amount (not to exceed
$500,000).
TO BE USED FOR: Fixed assets, refinancing, working capital
*Total EDA exposure under the Main Street program not to exceed 50% up to a maximum of $2 million.
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Small Business Fund
An expedited approval process helps the Small Business Fund program provide
below-market rate financing to applicable businesses through direct loans or
guarantees, with the choice of a variable or fixed interest rate.
IF YOU ARE: A creditworthy small, minority-owned or women-owned
business in New Jersey in operation for at least one year or not-for-profit
corporation in operation for at least three full years,
YOU MAY QUALIFY FOR:
• Small Businesses - Up to $300,000 for credit scores greater than or
equal to 700; Up to $125,000 for credit scores greater than or equal to
650.
• Not-for-Profits - Up to $300,000 with 1.10 debt service coverage ratio.
TO BE USED FOR: Fixed assets and working capital
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Bond Financing
IF YOU ARE: A creditworthy manufacturing company, a 501(c)(3) not-forprofit organization, or an exempt facility in New Jersey,
YOU CAN APPLY FOR: Long-term financing under the Bond Financing
Program.
IN THE AMOUNT OF:
• $500,000 to $10 million in tax-exempt bonds for for-profit companies, with
either a fixed or variable interest rate, and terms up to 20 years for real
estate and 10 years for equipment;
• $500,000 with no dollar limit in tax-exempt bonds for qualified not-for-profit
organizations.
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Bond Financing
Eligible Uses:
• Tax-exempt bonds for eligible for-profit companies can be used to finance
capital improvements and expansions, including real estate acquisitions,
new equipment, machinery, building construction, and renovations.
•Tax-exempt bonds for not-for-profit organizations seeking capital to
expand community services can be used to finance land and building
acquisitions, new construction and renovations, equipment purchases,
debt refinancing and working capital.
• Government tax-exempt bonds can be used for projects that are owned
and operated for the benefit of local, county and state government bodies.
• Taxable bonds may be used for working capital and debt refinancing, and
are permitted only under certain circumstances for tax-exempt financing
for not-for-profit borrowers.
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Edison Efficiency Revolving Loan Fund (EE RLF)
Program Summary
• New Jersey-based commercial, institutional or industrial entities
(including 501(c)(3) organizations) that have received an approved
Energy Reduction Plan under the BPU’s Pay for Performance program
may be eligible for supplemental financing through the EE RLF. Also
eligible are those entities participating in the BPU’s Large Energy Users
Pilot Program. Financing, in the form of low-interest loans, can be
used to support up to 80% of total eligible project costs, not to exceed
$2.5 million or 100% of total eligible project costs from all public
State funding sources.
Use of Funds
• Whole-building energy improvements.
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Clean Energy Manufacturing Fund (CEMF)
• Up to $3.3 million in grants and low-interest loans are available to
New Jersey clean technology manufacturers under two separate
components:
- Up to $300,000, not to exceed 10% of total CEMF project funds
requested, is available as a grant to assist with the manufacturing
site identification and procurement, design and permits. 20% of
the grant is available up front as seed funds at closing.
- Up to $3 million as a 10-year loan with repayments to start at the
beginning of the 4th year, to support site improvements,
equipment purchases, and facility construction and completion.
One-third of the loan may convert to a performance grant if milestones
are met during the first three years. No more than one-half of the funds
may be advanced prior to production on the manufacturing line.
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SEARCH Day Program
• Founded in 1971 by concerned parents and professionals, SEARCH was the
first not-for-profit State approved 12-month school in New Jersey specializing
in programming for individuals with autism.
• EDA issued tax-exempt bonds totaling $2.75 million to help SEARCH acquire
nine acres and 23,000 square feet of building space to further expand its
campus in Ocean. The bond was directly purchased by TD Bank.
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Provident Group – Montclair Properties
• Provident is developing 567,000 square feet of student housing in two
buildings at Montclair State University, a 25,000-square-foot student dining
facility to seat 600, and various student amenities such as multipurpose
space and outdoor courtyards.
• Bonds issued include:
-$211,390,000 Senior Series 2010A tax-exempt serial and term bonds
-$23,600,000 Subordinate Series 2010B tax-exempt term bonds
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Main Street Examples
• A $2.2 million Capital One Bank loan,
supplemented by a $700,000 EDA loan,
helped 866 Bayway Circle, LLC acquire a
former gas station in Elizabeth and develop
a new Laundromat and Capital One Bank
branch. 12 new jobs.
Laundry Warehouse, Bayway Circle
Steel processing and distribution
company in Camden received a $1.3
million Sun National Bank loan,
supplemented by a $500,000 EDA loan,
to support its working capital needs.
28 jobs maintained.
Paterson-based retailer of children’s
supplies and clothing received a
$500,000 working capital line of credit
from Sun National Bank with a 50%
EDA guarantee. 15 jobs maintained.
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Small Business Services
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EDA-UCEDC Partnership
• Strategic partnership to stimulate economic growth for small businesses
and expand the array of training and technical assistance services
available.
Training Workshops (available in English and Spanish)
•Business Basics Workshops
•Entrepreneurial Training Initiative
•ISO 9000:2001
Business Mentoring - One-on-one business counseling customized to meet
the specific needs of businesses.
Government Procurement - Helps businesses secure government contracts
and subcontracts through specialized trainings, daily electronic bid-match, and
one-on-one counseling throughout the bidding and proposal process.
Lending - Microloan program and business growth fund to address business
needs at every stage of growth.
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New Jersey Small Business Development Centers
• The New Jersey Small Business Development Centers (NJSBDC)
network, comprised of 11 centers across the state, provides
comprehensive services and programs for small business in New Jersey.
• NJSBDC staff and practicing business consultants help established small
business owners and aspiring entrepreneurs to develop business plans
and marketing strategies, learn accounting and financial analysis, find
capital financing, identify new markets, and expand their operations.
• NJSBDC provides one-to-one management consulting and counseling,
training, loan packaging services and specialized assistance in
procurement, technology commercialization, E-Business presence, and
international trade.
• NJSBDC leverages public and private funding sources, further maximizing
resources for the small business community.
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Expansion/Retention Incentives
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Business Employment Incentive Program (BEIP)
BEIP is a powerful incentive for encouraging businesses to locate and expand in
New Jersey. Approved businesses receive annual cash grants based on the number
of new jobs they have created in New Jersey.
IF YOU ARE: An economically viable expanding or relocating business that creates
jobs in New Jersey,
YOU CAN ELECT: To secure annual incentive grants via BEIP.
IN THE AMOUNT OF: Up to 80% of the total amount of state income taxes
withheld by the company during the calendar year from the new employees hired,
awarded for up to 10 years.
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Business Employment Incentive Program (BEIP)
Program Details:
• In order to qualify for a BEIP, businesses must create at least 25 new jobs
within a 2-year period; emerging high technology and biotech companies’
eligibility threshold is 10 new jobs. A business must also demonstrate that
the BEIP grant is a "material" factor in moving the job expansion or
relocation forward in New Jersey, that it is financially viable.
• The standard BEIP incentive is limited at 50% of the state income taxes
withheld on the newly created jobs. Companies that meet certain
Smart Growth objectives can have their grant boosted to 80%.
• Qualifying businesses may be eligible for up to 10 years worth of grants,
and must maintain the project and the jobs in New Jersey for at least 1.5
times the number of years the grant is in effect.
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Business Retention and Relocation Assistance Grant
(BRRAG)
If You Are: A business relocating operations within New Jersey and
retaining jobs, or a business maintaining jobs at a current location and
making a qualified capital investment…
You Can Apply For: Grants of corporate business tax credits through
the BRRAG program.
In The Amount Of: Up to $2,250 per year for up to six years, per job
retained in the State.
•Award amount is dependent on application of "bonus credits” that
may be available for the relocation of jobs to urban centers, and/or
for a capital investment at least twice that of the value of the
awarded credits.
•The number of times the yearly tax credit amount is awarded is
dependent on the number of retained jobs.
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BRRAG Eligibility Requirements
A company must:
• Retain a minimum of 50 full-time jobs.
• Commit to remain in NJ for the tax credit term and an additional five years.
• Offer its employees healthcare benefits.
• Demonstrate that the grant is a "material factor" in moving the relocation
project forward in NJ.
• Demonstrate that the capital investment and job retention resulting from a
proposed project would yield a net positive benefit to the State.
• Enter into any construction contracts associated with the project using
"prevailing wage" labor rates and affirmative action requirements.
• Have operated continuously in NJ in whole or in part, in its current form or
as a predecessor entity, for at least 10 years.
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BRRAG Program Details
• The total amount of credits that can be applied against a single
company's tax liability in a fiscal year may not exceed $10 million.
• Eligible jobs must be subject to New Jersey income tax withholdings
(Pennsylvania residents are not eligible).
• Applicants can designate different companies to receive the tax
credit; however, the recipients must be part of the applicant's
"controlled group“ approved by the EDA.
• BRRAG recipients with unused amounts of BRRAG tax credits may
sell the unused portion to affiliated or unaffiliated businesses under
the BRRAG Tax Credit Certificate Transfer Program.
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Sales and Use Tax Exemption Program (STX)
The STX is often used in conjunction with the BRRAG and encourages economic
development and the preservation of jobs that currently exist in New Jersey.
IF YOU ARE: A company with 1,000 or more employees that needs
to make purchases for construction and renovation of a new
business location.
YOU CAN APPLY FOR: A sales tax exemption certificate. Note:
Applies only to property purchased for installation in approved
project.
TO BE USED FOR: Purchase machinery, equipment, furniture and
furnishings, fixtures and building materials other than tools and
supplies for placement at the project location without the imposition
of sales and use tax until the new facility is functional.
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Church & Dwight Co., Inc.
• Church & Dwight Co., Inc. currently has its global headquarters and R&D
center in Princeton and a manufacturing plant in Lakewood. The company,
which is considering moving its Princeton operations to Pennsylvania, was
recently approved for a $6.57 million BRRAG to support the retention of its
974 New Jersey-based employees.
• The company was also approved for a $1.5 million BEIP to support the
creation of 105 new jobs in Princeton, as well as a $719,000 BEIP to
support the creation of 28 new jobs at its Lakewood location.
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Pinnacle Foods Group, LLC
• Pinnacle Foods invested $6 million to expand into an 85,000-square-foot facility
in Cherry Hill, which will ultimately house approximately 270 employees.
• The maker of brands including Vlasic and Duncan Hines moved to its new
location in September with the help of a nearly $920,000 BEIP grant for the
creation of 90 new jobs and a $182,600 BRRAG benefit for the retention of 133
jobs in New Jersey.
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Redevelopment
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Economic Redevelopment and Growth (ERG) Grant
If You Are: A developer with a project in Planning Area 1 (Metropolitan),
Planning Area 2 (Suburban), a center designated under the State
Development and Redevelopment Plan, a pinelands regional growth area,
pinelands town management area, a pinelands village, or a federal
installation area established pursuant to the pinelands comprehensive
management plan; a transit village (local incentive grants only); federally
owned land approved for closure by the federal Base Realignment Closing
Commission; an area zoned for development pursuant to a master plan or
subject to a redevelopment plan adopted by the New Jersey Meadowlands
Commission; and, any land owned by the New Jersey Sports and
Exposition Authority within the boundaries of the Hackensack
Meadowlands District,
You Can Apply For: An incentive grant up to 75% of the annual
incremental State Tax and/or Local Tax revenue.
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Economic Redevelopment and Growth (ERG) Grant
To Be Eligible:
• The redevelopment project must be located in a qualifying area.
• The developer must not have began any construction at the site of the
proposed project prior to submitting an application, except:
o if the EDA determines that the project would not be completed otherwise; or,
o if the project is to be undertaken in phases, a developer may apply for phases
for which construction has not yet commenced.
• For any project consisting of newly-constructed residential units, then
developer is required to reserve at least 20% for occupancy by low or
moderate income households (as defined by statute).
• A project financing gap exists.
• The overall public assistance provided to the project will result in net
benefits to the municipality where the project is located or the State.
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Economic Redevelopment and Growth (ERG) Grant
Program Details
• The annual percentage amount of reimbursement will not exceed 75%
of the annual incremental State revenues.
• The term of each approved state and local redevelopment incentive
grant agreement may extend for up to 20 years; however, the combined
amount of reimbursements cannot exceed 20% of the total cost of the
project, exclusive of publically-owned infrastructure, and a developer
seeking an incentive grant is required to make an equity participation for
at least 20% of the project's total cost.
• The developer must submit satisfactory evidence of actual project costs,
as certified by a certified public accountant and evidence of a
permanent certificate of occupancy, prior to the first disbursement of
funds under the agreement.
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Urban Transit Hub Tax Credit Program
If You Are: A developer, owner, or tenant making a qualified capital
investment within a designated Urban Transit Hub…
You Can Apply For: Tax credits equal up to 100% of the qualified
capital investments made within an eight year period.
•Taxpayers may apply 10% of the total credit amount per year over
a ten year period against their corporate business tax, insurance
premiums tax or gross income tax liability.
•Tax credits may be sold under the tax credit certificate transfer
program of not less than 75% of the transferred credit amount.
•Total credits approved under this program are capped at $1.5
billion, with $150 million allocated towards residential projects
which may receive a 35% credit.
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Urban Transit Hub Tax Credit Program
To Be Eligible:
• Developers or owners must make a minimum $50 million capital investment in
a single business facility located in one of the designated hubs. In addition, at
least 250 employees must work full-time at that facility.
• Tenants must occupy space in the facility that represents at least $17.5 million
of the capital investment and employ at least 250 full-time employees in that
facility. Up to three tenants may aggregate to meet the 250 employee
requirement.
• Applicants must demonstrate that the state's financial support will yield a net
positive benefit to both the state and the eligible municipality.
• S corporations, limited liability corporations and partnerships are eligible;
however, tax credits cannot be applied against an individual's New Jersey gross
tax liability.
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Urban Transit Hub Tax Credit Program
Program Details
•Urban Transit Hubs are located within ½ mile of New Jersey Transit, PATH,
PATCO, or light rail stations in:
Camden
East Orange
Elizabeth
Hoboken
Jersey City
Newark
New Brunswick
Paterson
Trenton
•Eligibility is expanded to locations within these municipalities that have
active freight adjacent or connected to the proposed building, and utilized
by the occupant. Camden expanded to one mile.
•Businesses can apply for the tax credits within five years of the program’s
January 13, 2008 effective date and satisfy the capital investment and
employment conditions within eight years of that date.
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Grow New Jersey
IF YOU ARE: A business creating or retaining jobs in New Jersey and making a qualified
capital investment at a qualified business facility.
YOU CAN APPLY FOR: Grants of corporate business tax credits for job
creation/retention through the Grow NJ program.
IN THE AMOUNT OF: Up to $8,000* per each new or retained full time job per year up
to 10 years, not to exceed $40 million over the grant term/$4 million per fiscal year.
* Qualified eligible businesses may receive tax credits of $5,000 per year for a period of
ten years for each new or retained full-time job to be located at the qualified business
facility as long as the number of full-time jobs meets or exceeds the minimum
requirement. In addition, a bonus award of up to $3,000 per job per year for a period of
ten years may be awarded for each new or retained full-time job if the qualified eligible
business meets additional criteria.
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Grow New Jersey
To Be Eligible:
• Make capital investments of at least $20 million at a qualified business facility at
which it will employ at least 100 full-time employees in retained full-time jobs, or
create at least 100 new full-time jobs in an industry deemed by the EDA to have
significant impact on the State economy.
• Locate the project in a Qualified Incentive Area.
• Demonstrate that the award of the tax credit is a "material factor" in the
company's decision to create or retain the minimum number of full-time jobs.
• Demonstrate that the capital investment and the resultant creation of eligible
positions will yield a net positive benefit of at least 110 percent of the requested
tax credit amount.
• Enter into any construction contracts associated with the project using
"prevailing wage" labor rates and affirmative action requirements.
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Grow New Jersey
Qualified Incentive Areas:
• Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), and any urban,
regional, or town designated center locations under the State Development and
Redevelopment Plan;
• Former military bases closed under the federal Base Closure and
Realignment Act;
• Vacant commercial office, laboratory, or industrial properties having over
400,000 square feet for at least one year or impacted by Urban Transit Hub Tax
Credit Program approval; or
• Areas “targeted for development” in the New Jersey Meadowlands, Highlands,
and Pinelands, as specified in the acts establishing these areas.
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UEZ Energy Sales Tax Exemption
IF YOU ARE: A UEZ-certified manufacturer employing at least 250 full-time
workers, at least 50% of whom are involved in the manufacturing process.
YOU CAN APPLY FOR: An exemption from the sales and use tax for electricity
and natural gas utilities, both the commodity and its transmission, consumed at
the UEZ-certified location.
IN THE AMOUNT: The sales and use tax otherwise applied to the energy.
PROGRAM DETAILS:
•The business must be a manufacturer and must continue to employ at least 250
full-time workers, 50% of whom are involved in the manufacturing process.
•The business will file an annual application with the EDA and must receive tax
clearance and pass a site visit.
•The sales and use tax exemption applies to only electricity and natural gas
consumed at the UEZ-certified manufacturing locations and cannot be applied to
oil or other energy supplies.
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Revel Atlantic City
• Revel Atlantic City was approved for up to $261.3 million over 20 years
through the Economic Redevelopment and Growth (ERG) Program.
• The $2.8 billion project involves the creation of an entertainment resort on
20 acres of beachfront property in the South Inlet of Atlantic City.
• Expected to result in the creation of 5,400 construction jobs, 5,500 fulltime jobs and an estimated $3.2 billion in new tax revenue.
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Gateway Transit Village
• The Gateway Transit Village is a mixed-used development located adjacent
to the New Brunswick Train Station that will include a parking structure;
Class A office space; destination retail, and for-sale and rental units.
• The project was approved for up to $55.1 million through the Urban Transit
Hub Tax Credit program to support the $326 million redevelopment. The
project is expected to create over 450 permanent jobs and 3,000
construction jobs.
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Saker ShopRite
• A new, world class Shop Rite opened in Somerville in October with the help of $5
million through the Economic Redevelopment and Growth (ERG) program. This
marked the Borough’s first and only supermarket since Pathmark closed in 2007.
235 employees have been hired to date (will create 300 jobs in total); approximately
200 construction jobs were created as well.
• The $28.1 million store, which was built with the latest sustainable technologies,
represents the first element of the Borough’s West Main Street Redevelopment
project, and is expected to serve as the anchor for a future shopping and residential
complex.
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Contact the Partnership for Action:
Choose New Jersey
(609) 297-2200
www.choosenj.com
New Jersey Business Action Center
(866) 534-7789
www.NewJerseyBusiness.gov
New Jersey Economic Development Authority
(609) 858-6700
www.njeda.com
www.njeda.com
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