State Beefs Up BEIP Program

In the face of that criticism, McGreevey appointed a commission headed by Secretary of Commerce William Watley and attorney Ted Zangari of the Newark-based Sills Cummis Law Firm to find a way to preserve BEIP. On Tuesday afternoon, in a meeting with real estate developers and other business leaders, McGreevey signed the legislative results of that commission's recommendations into law. The signing took place at the new headquarters of publisher John Wiley & Sons here, lured across the Hudson River from Manhattan in part by a $7.3 million BEIP grant.

"BEIP has been immeasurably improved because of the business community, and particularly the real estate leadership," McGreevey tells GlobeSt.com in an exclusive interview. "BEIP is essential if we are to ensure New Jersey's competitiveness, particularly in the Northeast real estate market."

The key change is the program's funding. "BEIP, as part of the general revenue fund, was consistently jeopardized," McGreevey explains. "We now have it being financed, separately, independently, through the New Jersey Economic Development Authority, which will ensure consistency and predictability."

The way the new law works is that if no appropriation is authorized in the state budget for BEIP grants, a mechanism will kick in under which EDA will issue economic development bonds to provide the money instead.

There are several other changes, such as allowing all new jobs, including New Jersey jobs held by Pennsylvanians, to be factored into a BEIP grant. Previously, many companies couldn't take advantage of the program because of New Jersey's reciprocal payroll tax agreement with the Keystone State.

The revamped program will also allow larger grants within targeted industries, including high-tech, biotech, financial services, logistics and transportation. The job creation threshold has been lowered from the earlier 75 to just 25 new jobs across the board, and to just 10 new jobs in the high-tech and biotech industries.

Finally, while the program sets a maximum grant of 50% of state taxes withheld by a business during a calendar year, it allows for awards of up to 80% for companies utilizing so-called "smart growth principles." In other words, if a company creates and places those jobs in urban and other targeted growth areas, including brownfields, they stand to receive larger grants.

"I would ask the real estate community to do what does every day—namely market New Jersey," McGreevey tells GlobeSt.com. "Our concern is to provide them with the tools necessary to market the state, and that is the purpose of the BEIP program."

Asked if there are any more incentive programs on the way, "we're going to have some exciting initiatives in the state-of-the-state address—but that's in January," McGreevey responds. "It will be an aggressively pro-business, pro-economic development agenda."