New Jersey Economic Development Authority 2015 Annual Report New Jersey Economic Development Authority Mailing Address: PO Box 990, Trenton, NJ 08625-0990 Street Address: 36 West State Street, Trenton, NJ 08625 Phone: (609) 858-6700 E-mail: [email protected] 1 Message from EDA Board Chairman Al Koeppe As Chair of the Board of the New Jersey Economic Development Authority (EDA), I am proud to report on another successful year in 2015 as the Authority advanced its mission to drive job creation and attract investment to the State. In line with its reputation, the EDA has maintained its steadfast commitment to furthering its mission while adhering to the highest standards of due diligence and fiduciary oversight. Throughout the year, the EDA has tirelessly administered its portfolio of programs to support entrepreneurs, small businesses, large companies, developers and municipalities. The following pages document the results of those efforts, reporting on financial results and highlighting specific projects that embody the impact of EDA assistance and the spirit and determination of New Jersey’s business community. Of particular note in 2015 is the progress of projects approved under the Economic Opportunity Act. On the following pages, you will see this evidenced by companies marking milestones such as groundbreakings, construction, hiring of new employees, ribbon cuttings, and certifications that their obligations to qualify for tax credits have been met. The ripple effect of the Economic Opportunity Act is particularly evident in cities across the State, as commercial, residential, retail and academic projects begin to take hold. The EDA has helped to advance impactful projects over the last year and I am proud of the role the Board has played in these efforts. From supporting emerging technology companies through its mentorship and incubator programs, to helping municipalities complete storm recovery projects, and attracting large out-of-state companies to cities that have historically suffered from disinvestment, the EDA staff and Board have performed with enthusiasm and integrity. Congratulations to the Authority on another strong year, and many thanks to the Board for its unwavering support and exemplary service. Al Koeppe EDA Board Chair 2 Message from CEO Melissa Orsen and President & COO Tim Lizura From financing programs for small businesses and not-for-profits, to mentoring and investment resources for technology and life sciences start-ups, to job creation and private investment spurred by tax credits under the Economic Opportunity Act, the impact of programs administered by the Authority was evident in many facets of the State’s economy in 2015. In total, the EDA finalized more than $440 million in financing assistance through its lending programs in 2015, leveraging over $669 million in total public/private investment and the creation of an estimated 1,440 new permanent jobs and 1,890 construction jobs. In addition, 51 incentive projects executed agreements in 2015 and are pending certification. These projects, supported with up to $812.4 million in tax credits or reimbursements, involve over $1 billion of anticipated private investment, the expected creation of 6,859 new permanent jobs and more than 2,840 construction jobs, and the retention of nearly 6,140 jobs “at risk” of leaving the State. In keeping with the new tagline “EDA Was Here,” which is the cornerstone of our small business awareness program, EDA and its staff were here, every day, all year, serving as an important resource for the companies that make up New Jersey’s thriving economy. The EDA often partners with financial institutions, local organizations and other State agencies to help borrowers bridge financing gaps and increase their access to capital. This includes offering low- interest loans, bond financing, and support for micro-lenders to increase their lending capacity and the technical assistance and training services they offer. The EDA also continued its commitment to supporting the growth of New Jersey’s technology sector in 2015. Notably, we launched the Executives-in-Residence (EIR) program at our Commercialization Center for Innovative Technologies (CCIT) in North Brunswick. Developed and designed in partnership with BioNJ, the EIR program taps into the breadth and depth of knowledge of New Jersey's life sciences executives in transition, benefitting both executives and CCIT tenants. Our Sandy recovery team was hard at work throughout 2015, supporting nearly 500 small businesses and communities with over $69 million in assistance through our Stronger New Jersey programs, funded under New Jersey’s Community Development Block Grant – Disaster Recovery allocation. The Fort Monmouth Economic Revitalization Authority (FMERA) also had an unprecedented year, issuing 10 Requests for Offers to Purchase (RFOTPs) and advancing a combined 270 acres for redevelopment at the Fort. With tech industry leader CommVault placing its roots on the Fort and Staten Island-based Tetherview moving in soon, FMERA is achieving restoration of the Fort’s reputation for technology leadership in the Monmouth County region. Finally, the work of the Partnership for Action team coupled with the powerful Economic Opportunity Act has continued to keep us all busy. The enhanced Grow New Jersey and Economic Redevelopment and Growth programs have successfully increased interest from businesses and developers inside and outside the State. Together with legacy incentive projects coming to fruition, 3 we celebrated a host of grand openings and groundbreakings across New Jersey in 2015, including new headquarters for Subaru in Camden, Goya in Jersey City, and Prudential Financial in Newark. While EDA staff continued to display the high level of professionalism and competency they are well known for, we would also like to commend them for their ongoing commitment to the greater good. This was particularly evident during the holiday season, when staff executed the EDA’s first annual “Community Challenge.” Teams of employees engaged in projects that impacted more than ten not-for-profit organizations, including those serving victims of domestic violence, the elderly, foster children, abandoned and abused animals, and those suffering from poverty and/or homelessness and hunger. We are proud that the EDA’s Senior Leadership Team also took part in this effort, joining with Habitat for Humanity of Burlington County to help construct a home in Willingboro for a family of five, as pictured above. As we move forward in 2016, we remain committed to growing New Jersey’s economy, helping to create quality jobs and stronger communities. Melissa J. Orsen Timothy J. Lizura EDA CEO EDA President & COO 4 2015 Activity *Net Benefit related to $737.1 million of EDA assistance approved under the Grow New Jersey and Economic Redevelopment and Growth (ERG) programs. EDA Mission The New Jersey Economic Development Authority (EDA) is an independent State agency that finances small and mid-sized businesses, administers tax incentives to retain and grow jobs, revitalizes communities through redevelopment initiatives, and supports entrepreneurial development by providing access to training and mentoring programs. 5 Encouraging Job Creation and Community Investment “This has truly been a team effort involving the state, as well as the county and city…we are thrilled to be coming back and look forward to creating new jobs in the City of Passaic.” - Michael Ostroff, CEO, Patella Woodworking With the continued collaboration of the Partnership for Action (PFA) and tax incentives through the New Jersey Economic Opportunity Act (EOA) adding to the State’s inherent strengths as a business location, small and large companies in industry sectors targeted for growth are choosing to locate and grow across New Jersey, with particular interest in the State’s cities. In the financial services industry, companies such as Brown Brothers Harriman & Co., RBC Capital Markets and First Data Corporation have decided to expand operations in New Jersey. In August, JPMorgan Chase & Co. announced that it will be moving 2,150 jobs from Manhattan, bringing its total headcount in Jersey City to approximately 7,000. The company also expects to invest more than $68 million to expand its regional technology and operations hub. This PFA-supported project was approved for Grow NJ tax credits of up to $187 million over ten years to encourage the company to expand in New Jersey instead of locations in Delaware and Ohio. In addition to its job and capital investment commitments, JPMorgan Chase & Co. also invested $1 million to provide skill-based job training for local residents over the next two years. Companies in the manufacturing sector are also locating and growing in New Jersey. Patella Woodworking recently moved back to the State after relocating to New York in 2012. The company moved to a new 89,000-square-foot headquarters and manufacturing facility on the former site of the Hercules Chemical Company in the City of Passaic. Approved for Grow NJ tax credits of up to $10.3 million, the manufacturer relocated from Orangeburg, New York and expects to create 70 new jobs. In addition to Grow NJ, the EDA also supported the company through the Premier Lender Program. Valley National Bank provided $7.2 million in loans that were backed by a 50-percent EDA guarantee. 6 “As this development and other projects underway in Trenton move forward, we foresee this City becoming an increasingly vibrant destination and sought after place to live and work.” - W. David Henderson, Principal, HHG The EDA administers the legislatively-created Grow NJ program in strict accordance with the EOA statute. Applications must satisfy statutorily-established job and capital investment requirements, as well as undergo a material factor review to verify that the tax credits are material to the project advancing in New Jersey. Applications are also subject to a net benefit analysis to verify that the anticipated revenue resulting from the proposed project will be greater than the incentive amount. Passaic City is one of five Garden State Growth Zones (GSGZ) established under the EOA. This designation affords cities most in need of investment with lower eligibility thresholds and higher incentive levels. Along with Passaic, projects located in Paterson, Trenton, Camden and Atlantic City also benefit from the enhanced incentives. Increased interest in these cities illustrates how key policy objectives outlined in the EOA are effectively being achieved. Trenton’s designation as a GSGZ is helping to attract new investment and development to the State’s capital city. Roebling Lofts, a mixed-use development being advanced by HHG Development Associates, will transform the old Roebling Steel building into rental lofts and apartments. Closed since the mid- 1950’s, the structure represents the first of four John A. Roebling’s Sons buildings planned for rehabilitation by HHG. The project will include multi-family lofts, two-bedroom lofts, and one- bedroom units, all featuring high ceilings and large industrial windows. Future plans for the complex include an additional building housing loft-style units and restaurant/retail space to be built from the ground up. The $42 million project was approved for up to $16.1 million in tax credits over 10 years through the residential Economic Redevelopment and Growth (ERG) program. As New Jersey's key developer incentive program, ERG prioritizes development in smart growth locations with infrastructure in place, particularly in urban areas and those near train stations. 7 “Subaru’s decision, coupled with the long-standing commitment by Campbell, provides an excellent platform for further economic development and job creation in the city of Camden.” - Gerard H. Sweeney, President & CEO, Brandywine Realty Trust The City of Camden, also a GSGZ, continued its renaissance in 2015, with companies such as Subaru of America and Holtec International breaking ground last year. In December, Subaru commenced construction of its new state-of-the-art headquarters and training/service center, located adjacent to Campbell Soup Company’s world headquarters. The Subaru campus will be the first new corporate headquarters in Knights Crossing, a new development by Brandywine Realty Trust. Subaru was approved for Grow NJ tax credits of up to $117.8 million related to the retention of 500 jobs and the expected creation of 100 new jobs. Holtec International broke ground in July, paving the way for its new 600,000-square-foot manufacturing and technology center on the waterfront. Holtec was approved for up to $260 million in Grow NJ tax credits and expects to create thousands of new jobs. "We will work with the State of New Jersey and the City of Camden to leverage our plant to serve as a training academy to help young men and women, especially unemployed Camden residents and veterans, to acquire skills that yield well-paying jobs.” - Dr. Kris Singh, Holtec's founder, president and CEO 8 "Partnering with RBH, Goldman Sachs, Prudential, NJEDA, the City of Newark, and the ICC allows us to bring our global headquarters and the world's largest indoor vertical farm close to where the consumer is, while also creating jobs." - David Rosenberg, CEO, AeroFarms In addition to GSGZs, the EOA targets investment in “distressed” areas of the State. Projects locating in these communities are also eligible for increased incentive levels. To date, over 90 percent of awards approved under the Grow NJ and ERG programs are for projects located in a targeted community. In Newark, local officials helped to break ground in July on Aerofarms’ new headquarters and R&D center. The company aims to create the world’s largest aeroponic farm in a renovated warehouse in the Ironbound community. The project, which was approved for a commercial ERG of up to $2.2 million and Grow NJ tax credits of up to $6.5 million, is expected to create more than 69 new jobs and leverage private investment totaling more than $42.5 million. Also in Newark, grand openings were celebrated in 2015 for two projects supported under the legacy Urban Transit Hub Tax Credit Program. In late September, Prudential Financial celebrated its new $444-million, 20-story office tower on Broad Street. The company, which plans to house approximately 3,000 employees at the new facility, is also leading efforts to revitalize nearby Military Park. The 740,000-square-foot facility was built partially with the support of up to a $211 million Urban Transit Hub tax credit approved by the EDA in 2012. Also in September, officials marked the opening of 494 Broad Street, where Urban Transit Hub tax credits of up to $37.4 million approved in 2012 helped to support the expansion of an office building that contains a Cablevision call center and several retail establishments. The project was expected to create 150 new jobs. During the term of the Hub award, 500 jobs must be located at the project site in order for the project to be in compliance. 9 “We believe the tax credits will translate into a significant economic boost to the region. Both Hackensack University Health Network and Seton Hall University look forward to building a world-class institution that will prepare future healthcare professionals to provide the best quality care and ultimately innovate the way healthcare is delivered in New Jersey.” - Robert C. Garrett, President and CEO, Hackensack University Health Network, and Dr. A. Gabriel Esteban, President, Seton Hall University Southern New Jersey also experienced a flurry of economic activity in 2015. At a job fair held in Pennsauken in September, the impact of the EOA was on full display as hundreds of new employees were sought from companies supported through the Grow NJ program. This includes lighting manufacturer Princeton Tec, expected to create 156 jobs at its new headquarters and assembly facility in Pennsauken. In Atlantic County, Barrette Outdoor announced in October that it had moved into its new manufacturing facility in Galloway and was seeking to hire more than 250 people to fill the new positions that were material to their Grow NJ approval. Barrette was approved for tax credits of up to $29.8 million to encourage the leading vinyl, wood and aluminum manufacturer to relocate to Galloway instead of consolidating its operations in Tennessee. The company’s new facilities are housed in the former Lenox plant, a 415,000-square-foot building that was vacant for more than a decade. In addition to business attraction and retention, the EOA has also helped to advance projects that highlight the State’s commitment to higher education. The future Seton Hall-Hackensack School of Medicine, which will be the only private medical school in New Jersey, will be housed on the vacant former Roche corporate campus in Nutley and Clifton. The $75 million project was approved in November for up to $16.9 million in Grow NJ tax credits, and is expected to create more than 270 new jobs. With the goal of bringing in the first class for fall 2017, the campus will hold roughly 500 medical students and faculty, in addition to an estimated 1,500 students and faculty associated with the nursing and health and medical sciences schools. The four-year medical school would serve as an anchor to the 119-acre site, drawing research and industry to the campus through collaborative partnership. 10