The New Jersey Economic Development Authority approved the first award under a huge government economic incentive program, NJ Emerge.
Under the agreement, approved by NJEDA at their board meeting on September 22nd, the $ 9.9 million tax break will go to Party City, which plans to create 357 new jobs and increase its 338 full-time positions in the state keep is located in Rockaway.
Party City plans to spend $ 32 million to rent a 208,911 square foot office building in Woodcliff Lake and make a number of improvements and updates, the NJEDA said in a statement Wednesday.
Under the agreement, Rockway Jobs and hundreds of others in Elmsford, NY would be based out of this new office.
According to agency documents, it could accommodate up to 800 workers and would include amenities such as “open space, huddle rooms, conference rooms with whiteboards, offices, studio rooms for photo sessions for products and exhibits”.
The incentive is awarded over a period of seven years. State officials estimate it could generate $ 35.7 million in ROI over the life of the award.
Party City has reportedly been offered a $ 15.7 million 10-year incentive out of New York to settle in White Plains north of the border instead, agency documents say. The more lucrative tax breaks and lower business costs would have proven White Plains to be a cheaper alternative, according to the state agency.
Party City is required to enter into a community service agreement with Woodcliff Lake which, according to state regulations, could include something like a local hiring obligation. You have six months to work out such an agreement.
“The project approved today shows the potential of this program to bring hundreds of good jobs to New Jersey,” said Tim Sullivan, chief executive officer of NJEDA, on Wednesday afternoon.
A separate motion for an undisclosed amount to Wisconsin-based financial services company Fiserv Solutions was removed from the board of directors’ agenda on Wednesday.
NJ Emerge is part of the much larger $ 14.5 billion incentive program that Governor Phil Murphy signed in January to represent the state’s recovery from the COVID-19 recession. It provides incentives for businesses moving to New Jersey or looking to leave the state by offsetting the taxes they owe.
Murphy said the Party City tax break was “just the kind of award we wanted” – one that would “bring good, high-paying jobs to New Jersey for a reasonable investment.”
State lawmakers passed a cleanup bill for NJ Emerge in June before the program had even pushed ahead and accepted proposals.
A key aspect of the cleanup was reducing the number of jobs a company had to maintain to qualify for government subsidies from the 1,000 full-time jobs or 500 in some of the poorest communities in the state. That has been reduced to at least 150 full-time positions, meaning Party City would not have qualified for the incentives under this earlier standard.
Regardless, Party City will not receive incentives for these retained jobs, only for the new jobs, the NJEDA said in its announcement.
The question of retaining jobs in exchange for tax credits was examined in depth in 2019 by a task force put together by Murphy. The task force touched on several companies in Camden that they said would be leaving New Jersey and taking hundreds of jobs with them, though not planned – essentially abuse of the incentive program.
The higher job retention thresholds were set in part in response to the results of the task force, but companies complained that many companies were excluded from the new incentive program as a result.
A sister program is called NJ Aspire, which also costs $ 1.1 billion per year and provides developers with gap funding for projects so they can raise the money they need when the funds are not yet available to pay for the entire project.
Editor’s Note: This story was updated on September 22, 2021 at 2:12 p.m. EST to include additional details on Party City’s NJ Emerge Award and information about the program’s job requirements.