JERSEY CITY, NJ−JP Morgan Chase will get a Grow NJ tax incentive award totaling $224 million over ten years to expand its regional technology and operations hub in Jersey City.
JP Morgan Chase CEO Matt Zames said in a release Monday that the award “made it possible for our firm to purchase our Newport Operations Center in Jersey City.” Zames said the bank will invest $77 million in consolidating operations on two sites on Washington Boulevard in the Newport complex.
At a Friday board meeting, the Economic Development Authority approved the JP Morgan award and also $78 million in tax benefits over ten years to Canadian financial firm RBC, contingent on that company taking offices at the Goldman Sachs tower in Jersey City.
The EDA estimates the JP Morgan project will produce a net benefit to the state of $1.1 billion over 20 years and voted at its Trenton board meeting to forgo an annual $22.4 million in taxes for a decade to get the commitment from JP Morgan.
NJ Policy Perspective’s president Gordon MacInnes immediately reacted with skepticism. “At a time when the state is facing a fiscal crisis and discussing serious cuts to public services, one has to question the wisdom of giving up such a large amount of revenue over the next decade for a single project,” he said.
But Jersey City Mayor Steve Fulop was exultant. He said his city has become the “driving force leading New Jersey out of the recession.”
The multi-famiy market is exploding, with 10,000 units in the pipeline in Jersey City. And last week Salman Capital of New York City invested $31 million in acquisition of a century-old office tower in downtown Jersey City.
The EDA’s president, Timothy Lizura, said JP Morgan was considering sites in Delaware and Ohio for its new hub, but began to train attention on Jersey City – where it currently has an office on Washington Boulevard in the Newport center – because of the state’s aggressive incentive program. The extra-large carrots being offered now are available under the state’s Economic Opportunity Act that took effect at the end of last year.
JP Morgan currently has three office centers in New Jersey, including those in Whippany and Iselin. The new hub project would mean retention of 2,612 employees in the state and 1,000 new jobs, according to the EDA.
The EDA board also approved an annual $7.8 million over ten years under Grow NJ for RBC, if it chooses to renovate a 207,000-square-foot space in the Goldman Sachs building, instead of moving to a building in Minnesota.
RBC has leases due to expire at One Liberty Plaza and World Financial Center in Manhattan.
If it brings its 900 jobs to Jersey City, the EDA estimates the net benefit to the state would be $295.7 million over 20 years.