Attention all New Jersey residents: Governor Phil Murphy recently announced the approval of the first-ever approval through the state’s Emerge Program. This NJ program created for new job incentives is a key component of the state’s Economic Recovery Act of 2020, commonly referred to with the acronym of ERA. Let’s take a quick look at what this legislation is all about.
The Emerge Program
New Jersey’s emerge Program is designed to stimulate economy activity in the Garden State. The hope is that this tool for development catalyzes job creation as well as economic growth throughout the state. This unique program recently approved a project that will bring hundreds of living wage jobs to New Jersey.
The first-ever award for the program was recently approved by the New Jersey Economic Development Authority. The approved project is for Party City Holdings. Party City is a Fortune 100 specialty manufacturing, retail and wholesale business. If everything goes as planned, the company will add more than 350 jobs to the Garden State. However, these are not any old jobs. Rather, they are positions that pay a living wage, setting the stage for employees to provide for their family. The jobs will pay more than the county’s median salary, ensuring economic activity is catalyzed throughout the area.
This job growth and expansion program aligns with the Governor’s plan for a more fair and economically robust state. As the Governor has stated, the aim of the program is to create a modern economy that works for everyone who contributes their time and energy to work rather than the few at the top of the economic pyramid.
Why the Project is so Important
Though the 350+ jobs created through the project will not propel the local economy to new heights, it will certainly help reinforce the area’s economic stability. The project will also help retain nearly 340 full-time positions that otherwise might have been outsourced to nations that pay low wages or other states with comparably low minimum wages.
Anyone who dares criticize the program should be aware that the Party City positions will be corporate roles that pay salaries as opposed to hourly wages. All in all, the project will invest in excess of $30 million to lease a Woodcliff Lake office building that spans more than 208,000 square feet.
If everything goes according to plan, Party City Holdings will consolidate its Elmsford, NY and Rockaway, NJ buildings into a single unified headquarters. The company is ranked in the top 900 of the Fortune 1,000. In fact, Party City is the largest party good retailer in the entirety of North America.
Specifics of the Tax Credit Award
The NJEDA Board has approved a tax credit of just under $10 million for Party City. The money will be provided across a period of seven years. The figure’s discounted present value is slightly more than $7,400,000. However, it is important to note Party City will not be provided with financial incentives for the nearly 340 jobs considered to e at-risk.
The NJEDA calculations state the resulting economic benefit for the state of New Jersey will be a net positive of more than $35,700,000. In terms of percentages, this figure equates to a nearly 500% net positive financial benefit. The bare minimum net positive percentage for such a project is 400%. Critics of the program should be aware that Party City is also required to sign a community benefits agreement with Bergen County/Woodcliff Lake.
Additional Program Details
The Emerge Program is a component of the suite of programs developed as a part of the overarching New Jersey Economic Recovery Act of 2020. This program empowers large businesses, small businesses and non-profits to apply for tax credits that support projects that adhere to the minimum requirements for job creation and capital investment.
The Emerge Program implements specific reforms that zero in on the state’s shortfalls resulting from prior tax incentive programs. These reforms include protections for laborers, environmental protections, higher minimum requirements for net economic benefits and more.
It is important to note companies will not receive any of the Emerge Program tax credits right away. Rather, the tax credits are provided after the project is complete. NJEDA certifies the project costs and also verifies job creation and job maintenance. The failure to adhere to the requirements of the project results in the business being subjected to payment reduction, recapture or even forfeiture.