Saturday, October 17, 2015

Two firms get $14.4 million in tax breaks under Grow New Jersey

Allison Steele, Inquirer Staff Writer

The state Economic Development Authority on Thursday approved $9.4 million in tax credits to the Winslow branch of the Eggo Co., a subsidiary of Kellogg, for an expansion, as well as $5 million for a laundry company to move from Bellmawr to Camden.

The authority also approved $5 million in tax breaks for public housing in Camden's Centerville neighborhood and signed off on transferring the rights of a 16-acre parcel of Camden's waterfront to Liberty Property Trust, the powerhouse developer that last month announced plans to build offices, homes, and a hotel on the land.

The Eggo and Clean Green Textile Service projects are the latest to be approved under the Grow New Jersey program, which provides incentives for employers who remain in the state or who invest in struggling cities as part of the 2013 Economic Opportunity Act. That law, which U.S. Rep. Donald Norcross (D., N.J.) championed as a state senator, allows the broad use of tax incentives to lure employers to cities like Camden.

The EDA has since approved more than $1 billion worth of tax credits for companies that plan to move to Camden, including Subaru of America, Holtec, and Lockheed-Martin. To earn the incentives, companies must maintain a certain level of jobs and remain in Camden for set periods of time.

Critics say the deals mostly involve relocating jobs from elsewhere in South Jersey, and include no strategies for addressing Camden's high unemployment rate. Supporters say the moves will create new jobs and temporary construction work, although companies are not required to hire city residents.
The Clean Green Textile Service, a commercial laundry business with 59 full-time employees in nearby Bellmawr, will receive tax credits worth $5 million for moving to Camden instead of Pennsylvania - a relocation expected to have a net benefit to the state of about $73,000 over a period of 35 years, according to the EDA.

Since the agreement requires the company to stay in New Jersey for only 15 years, the company could move after that and still receive the full incentives that were awarded, said Jon Whiten of the liberal think tank New Jersey Policy Perspective.

"Even if the company stayed for 30 years, the state would still lose money on this deal," Whiten said. "No sensible lender would accept such a risk."

Eggo, a Kellogg subsidiary that makes such frozen breakfast food as waffles, is looking to double the size of its 100,000-square-foot manufacturing plant in Winslow and to add 118 jobs. Without securing tax breaks for the $85 million expansion, the company could move to Michigan, according to its EDA application.

The application to remake Camden's Branch Village housing complex, submitted by the city housing authority, sought tax breaks under the Economic Redevelopment and Growth (ERG) program, which provides grants for developers to fill funding gaps in building projects.

The $5 million in credits awarded by the EDA would offset the $16 million cost of building a 50-unit, three-story apartment complex in the city's Centerville section, a main focus of development efforts in recent years. The project would also involve demolishing three vacant buildings on the site.

The project, expected to break ground by the end of the year, will be spearheaded by the Michaels Organization, an affordable-housing company that has worked in Camden for years and will lease the site.

Michaels, based in Marlton, is also a backer of the major Camden waterfront-development plan announced last month. Michaels president John O'Donnell is a longtime friend of South Jersey Democratic power-broker George E. Norcross III, brother of Donald Norcross and head of Cooper University Hospital. George Norcross has said he lobbied longtime friend and Liberty Property Trust CEO William Hankowsky to take on the waterfront project.

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