CHATHAM, NJ—Editor's Note: Raymond P. Trevisan is managing principal for Cassidy Turley in New Jersey. He joined the firm in April 2012. With 23 years of commercial real estate experience, Mr. Trevisan was previously principal at Normandy Real Estate Partners, and a first vice president at CBRE. Before this, he founded his own law firm, where he specialized in negotiating property acquisition and lease transactions. He holds a BS in Finance from Lehigh University, where he recently served on its Board of Directors, and a JD from the Seton Hall University School of Law. 

Q: What is NJEDA's thinking with the Grow NJ incentives? What do companies need to do to qualify for the program?

A: New Jersey is finding truth in the old adage; “it takes money to make money.” The New Jersey Economic Development Authority (NJEDA), which is responsible for administering Grow NJ, has awarded more than $1.4 billion in tax incentives to 71 companies in the past 12 months.

The NJEDA isn't just sprinkling the money around, hoping jobs will merely sprout up in the Garden State. To qualify for incentives, a company must be located in a qualified area; be in need of financial support; and demonstrate the award is crucial to the applicant's decision to remain in, or relocate to, New Jersey. The basis for awarding a grant is calculated on three primary points: jobs, capital investment and net benefit. Only if a company meets all three criteria, is it eligible for at least $3,000 in annual tax credits for each new job and $1,500 in annual tax credits for each retained job.

A correlation may be drawn between the distribution of tax incentives and the continued increase in employment throughout the state. Grow NJ may have played a significant role in the improving employment environment. In the third quarter of 2014, the unemployment rate decreased  to 6.3% with employment rising to 3.24 million compared to 3.19 million during the same quarter of 2013.

Q: Which industries are getting the most out of Grow NJ incentives?

A: The top five industries which benefitted most were financial services, manufacturing, consumer goods, energy and entertainment/media. These five industries accounted for 55% of all projects, but received 75% of all funds  awarded. The sixth largest industry was defense and aerospace with one award to Lockheed Martin for $107 million, the third largest single project award.

The financial services industry was by far the biggest winner with eight companies receiving a combined total of almost $334 million in tax incentives, an average of more than $40 million per project – the highest for an industry with more than one approved project. The NJEDA  awarded  banking giant, JP Morgan Chase, $224 million to relocate 3,500 jobs to the Hudson Waterfront in Jersey City.

Q: Where is the money going, geographically?

Hudson County had the largest concentration of Grow NJ projects awarded and is home to 19 projects with more than $500 million in awards from the NJEDA. So far however,  employment numbers in the county do not reflect these awards and have not translated into significant job growth yet, with unemployment hovering around 7%. There may be a lag  since the full impact of the incentives has not been realized  and is  not  reflected in reported job growth. The Hudson County Grow NJ investments promise to create or retain 8,000 jobs and the county's proposals received an average of $63,000 per job for both new and retained jobs.

Q: Camden County has been a big beneficiary, with several big companies getting incentives to relocate into the City of Camden, not far from their existing facilities.

A: Camden County is home to thirteen awards, including the single largest award, a $260 million dollar award to Marlton-based energy company Holtec International.  The energy company is proposing to build state-of-the-art manufacturing and research facilities on the Camden Waterfront. The project promises to relocate 160 jobs from Marlton and create more than 235 new jobs in Camden. Similar to Hudson County, the Camden County unemployment rate stands at 6.9% at the end of the third quarter in 2014.

Moreover, although Holtec was the only energy company to receive tax credits, the amount was significant enough to rank the entire energy industry in the top five alongside financial services, manufacturing, consumer goods and entertainment/media. Single awards that led the pack were Holtec and JP Morgan Chase followed by Lockheed Martin.

Q: What other areas are benefitting?

A: Bergen, Passaic and Middlesex Counties rounded out the top five counties for number of awards and value of the awards. Bergen and Middlesex Counties can boast the lowest unemployment rates at 5.3% and 5.6% respectively, as of the third quarter of this year. Passaic has the highest unemployment rate, even greater than Hudson or Camden Counties at 7.4% during the same timeframe. 

Q: Do you see an impact on the employment levels from these incentives?

A: One of the obvious goals of NJEDA and Grow NJ is to raise New Jersey's employment  up to the same level we are seeing on a national scale. Across the country, unemployment declined 90 basis points over the year to 6.1% as of the third quarter. This sustained decrease in unemployment reinforces the uptick in market conditions on a national basis. The hope is that Grow NJ provides just the right mix of light, sunshine and water on the Garden State's employment landscape and that local economies will experience the positive impact of job stimulus.