NJEDA financing supports small business expansion in North Jersey

- PIXABAY

By: NJBIZ Staff / editorial@njbiz.com

The state’s Economic Development Authority says nearly 200 jobs are heading to Paterson and Newark.

On Friday, NJEDA announced small businesses JRL Imports and MTB AMG will expand in North Jersey with the Authority’s financial support.

After closing on a loan in July for $1.4 million from NJEDA Premier Lending Partner ConnectOne Bank – with a $410,000 participation from the Authority – specialized contracting company MTB AMG will relocate its headquarters, and 160 jobs, from Brooklyn, N.Y. to Newark.

“If you run a growing company, moving to New Jersey is the smart move,” MTB AMG owner Arthur Nelson said in a prepared statement. “You get access to the same markets and resources you have in New York, but with lower overhead cost. Add to that the deep talent pool and vibrant community in Newark, and it’s clear Jersey offers the whole package.”

Serving wholesale and retail online industries, fashion accessory company JRL Imports was approved for a $524,000 direct loan from NJEDA in July 2019. Together with a $655,000 loan from Cross River Bank, JRL will acquire a facility in Paterson which will maintain 21 jobs and create seven more following its move.

“As a company that relies on warehousing and solid logistics infrastructure, locating in Paterson was the obvious choice,” Joseph Lefkowitz, owner of JRL, said in a prepared statement. “New Jersey’s unparalleled connectivity to all the major Northeast markets as well as global connections through the airports in the region will allow us to expand our online business, and the state’s diverse, talented workforce will make it easy to grow.”

Through its Premier Lender Program, NJEDA partners with more than two dozen banks throughout the state to guarantee or participate in a portion of commercial loans or lines of credits; financing which can be used for fixed assets or term working capital. The Authority also offers financing via direct loans.

“Building a supportive environment where growing businesses have access to the resources they need is an important component of Gov. Murphy’s plan to build a stronger, fairer economy,” NJEDA Chief Executive Officer Tim Sullivan said in a prepared statement. “We are proud see growing businesses choose New Jersey as the site for their expansion and take advantage of NJEDA programs designed to support their immediate financing needs and put them on the road to long-term success in the Garden State.”

In addition to low cost financing, the NJEDA offers resources for growing businesses including the Small Business Lease Assistance Program, bond financing for manufacturers and not-for-profit organizations, technical support, and a number designed for technology and life sciences programs in all growth stages.

Gateway: Despite little progress, Murphy admin, state Congressional leaders remain optimistic

Rendering for the Portal North Bridge. - GATEWAY DEVELOPMENT CORP.

By Daniel J. Munoz / dmunoz@njbiz.com

The Murphy administration and New Jersey’s Congressional delegation are maintaining confidence that the trans-Hudson River Gateway Tunnel and Portal Bridge will garner federal funding and approval, despite little progress over the past year from the Trump White House, which has held the project up in what some argue is purely a political move.

“New Jersey is ready to get started on America’s next big infrastructure project, but we can’t do that until the Trump administration stops its delays and removes its artificial roadblocks," Murphy said Wednesday morning at a press conference at the New Jersey Transit Secaucus Junction station.

Gov. Phil Murphy speaks at the NJ Transit Secaucus Junction station
on Aug. 28, 2019.

The event largely mirrored a similar press conference from the year before where Gov. Phil Murphy said the Portal Bridge project was “shovel-ready” and simply needed a nod from the federal government and dollars to boot.

The 2018 press conference was held at park overlooking the Portal North Bridge, a swing drawbridge on the Northeast Corridor Line that frequently gets stuck and needs to manually be put back into place. Wednesday's press event was scheduled to be held at the same place, but moved due to inclement weather.

The Trump administration has been opposed to the projects, backtracking on a promise by the Obama administration to fund the plan 50/50 and arguing that whatever applications are submitted lack critical information to make them eligible for consideration.

A shutdown of either the bridge and tunnel - or reduced capacity to address critical repairs - could cripple the line which accommodates 200,000 New Jersey commuters daily, and upward of 800,000 who traverse the line to travel up and down the East Coast.

Proponents of the tunnel argue that progress among New York, New Jersey and Amtrak for the two projects, collectively called Gateway, with a $30 billion price tag has lurched forward.

An application for tunnel funding last week scaled down the price tag by $1.4 billion from $12.7 billion to $11.3 billion - half of which would be jointly funded by New Jersey and New York, which the parties said could likely make the application more attractive.

“We’ve done everything we have to do in terms of the regulatory approval process and providing the funding on the state level,” said U.S. Rep. Frank Pallone, D-6th District.

U.S. Rep. Tom Malinowski, D-7th District, said Wednesday that he has been involved in promising talks with the head of the Federal Transit Administration. “I spoke to the FTA just last week, and I heard for the very first time, 'no more excuses'. They acknowledged that we have taken every single step to get this thing off the ground,” he said.

Meanwhile, Democrats took control of the U.S. House of Representatives in the past year, which Malinowski said allowed for Congressional approval of money earmarked for the project. But the FTA denied funding for both projects in March, ranking them both as “medium-low” and ineligible for funding, despite the federal dollars from Congress.

U.S. Reps. Josh Gottheimer, Frank Pallone, 
Tom Malinowski, Albio Sires 
and Mikie Sherrill arrive in Secaucus 
on Aug. 28, 2019 - DANIEL J. MUNOZ

“None of the non-[Capital Investment Grants] funds are committed or budgeted. All of the funds are planned or uncertain,” the FTA wrote in its decision.

“No funding is currently available to cover unexpected CIG capital cost increases or funding shortfalls,” the statement continues. “[NJ Transit] did not demonstrate access to funds via additional debt capacity, cash reserves, or other committed funds to cover annual system wide operating expenses in excess of the current forecast."

Jerry Zaro, who heads the Gateway Development Corp., which would physical accept the state and federal dollars and oversee the project, said that the creation of the GDC is a major step for the project.

“We aren’t standing still,” Zaro added, pointing to, “construction on some of the things you don’t see… 11-12 projects underway, preparatory projects, because of the help from our Congressional delegation we now have the funding to pay for that.”

Drivers rest assured, NJ's gas tax will not go up this year

New Jersey's gas tax will not increase for the upcoming year. - PIXABAY

By Daniel J. Munoz / dmunoz@njbiz.com

New Jersey's gas tax will stay at 41.4 cents a gallon for the next year, the state treasury announced Wednesday following concerns that a recent decline in sales could lead to an increase to the surcharge.

Meanwhile, the state’s diesel fuel tax will stay at 48.4 cents per gallon, State Treasurer Elizabeth Maher Muoio said Wednesday morning.

Lawmakers and state officials had speculated that a gas tax increase could be announced in August, due to the heightened popularity of electric hybrid vehicles leading to a continuing decline in sales which would prompt the gas tax to continually increase.

That reasoning has led to some lawmakers, such as Assemblywoman Patricia Egan Jones, D-5th District, to push for a “road user fee” that would be levied against anyone who drives on New Jersey’s roads.

“We’ve heard from a lot of folks with electric vehicles, plus we have the hybrids who are reducing how much gallons people buy. We are definitely going to be addressing how they use the roads. And isn’t a gas tax a user fee?” Egan Jones, who services as vice-chair of the Assembly Transportation and Independent Authorities Committee, said at a Woodbridge event hosted by the Commerce and Industry Association of New Jersey in March.

Gas tax money goes into the state’s multi-billion dollar Transportation Trust Fund, which finances roads, railways and other infrastructure projects across the state. Over the TTF’s eight-year lifespan, the state will put $16 billion into the fund, or $2 billion a year.

Under state law, if gasoline revenue goes up, the tax rate decreases; if the gas consumption goes down, the tax must increase. The most recent increase was an addition of 4.3 cents in October.
The biggest increase was in 2016, when it shot up by 23 cents from among the lowest in the country.

State Supreme Court upholds assisted suicide law

- PIXABAY

By: Daniel J. Munoz / dmunoz@njbiz.com 

The state’s highest court on Tuesday upheld New Jersey’s physician-assisted suicide law, allowing the measure to go forward and doctors to prescribe life-ending medication to certain terminally ill patients.

The decision came hours after an appeals court overturned the lower court’s Aug. 14 ruling by Mercer County Judge Paul Innes blocking the law, arguing Innes’ court “abused its discretion” in issuing the freeze.

Attorney E. David Smith
speaks on Aug. 19, 2019. – DANIEL J. MUNOZ

Bergen County-based Dr. Yoseff Glassman, along with attorney E. David Smith of Smith & Associates, filed suit to have the law declared invalidated. 

The “Medical Aid in Dying for the Terminally Ill Act” was signed by Gov. Phil Murphy in April and took effect on Aug. 1. It allows terminally ill patients with no more than six months to live to acquire life-ending medication. Patients have to demonstrate that they are mentally sound and are not being coerced into making the decision.

A patient has to wait 15 days between when they request the medication and when a doctor can write a prescription. Innes’ ruling came just at the end of that first two-week waiting period.

A practicing Jew, Glassman argued the law violates his beliefs because even if he did not participate in end-of-life treatments, he would still be forced to take part by handing over medical records to a doctor who would actually issue the prescription.

Pharmacist Manish Pujara, a practicing Hindu, filed onto the suit on Monday, arguing that it also violated his religious beliefs because like Glassman, he would be forced to take part in the assisted-suicide law by turning over medical records to participating doctors and pharmacists.

“We respectfully disagree” with the appellate court’s ruling, Smith & Associates Senior Counsel Richard Grohman told NJBIZ before the Supreme Court decision.

The firm could not be reached for additional comment.

Murphy defends corporate tax break payment slowdowns

The Statehouse in Trenton. PHOTOS: AARON HOUSTON

By: Daniel J. Munoz / dmunoz@njbiz.com

Gov. Phil Murphy defended a recent, controversial practice by the administration of slowing down tax break payments as scrutiny of the incentive program and its participants has been increased.

In a sit-down editorial board meeting with NJBIZ on Tuesday, Murphy worked to quell the idea that lawmakers and business advocates are worried the new approach could sow confusion and anxiety among businesses dependent on annual tax credit payments.

“We are absolutely scrutinizing these payments given what’s unfolded over the past year. Who could blame us?” Murphy told NJBIZ.

Documents obtained by NJBIZ show the Economic Development Authority has yet to pay out tax break payments to 64 companies this year for taxes they paid in 2018.

Tax breaks are paid out to companies over a 10-year period, and annual payments are not made until those companies certify to the EDA that they met agreed-upon economic and job creation goals. The agency said it is taking extra time to comb through documents submitted by the companies to certify that they have met those goals.

Altogether, companies were paid $175.5 million in 2018 for taxes they paid in 2017—$151 million under the Grow New Jersey corporate tax breaks and $24.4 million under the legacy program.

Senate President Stephen Sweeney, D-3rd District, an often-times political foe of Murphy and ardent supporter of Grow NJ, widely condemned the practice as punishing businesses who played by the rules and acted in good faith.

Sen. Bob Smith, D-17th District, who is chair of a Senate tax incentive committee tasked with hashing out New Jersey’s new incentive programs, has also been critical of the practice.

“With all due respect, we’re going to make sure that if you promise to do X for my giving Y, that you actually did X,” the governor countered.

Sullivan gives testimony during a meeting of the 

Senate Select Committee on Economic Growth Strategies. 

EDA Chief Executive Officer Tim Sullivan has maintained that the slowdown of payments was in response to the state comptroller’s January audit, which found glaring holes in the EDA’s oversight of the program.

According to the audit, the EDA over-awarded tax breaks, or awarded incentives to companies which never should have received them in the first place. Moreover, the EDA failed to make sure companies were compliant with the tax break agreement.

A task force Murphy convened in January has presented allegations and evidence that businesses with close ties to South Jersey political powerbroker George Norcross presented bogus plans about where out of state they would move if they did not win the tax breaks – despite no such actual plans – with the advice of law firm Parker McCay, where George’s brother Philip is a partner.

EDA staff should have been able to easily root out the questionable information about the alternative locations, and because they did not the state over-awarded millions of dollars of tax breaks to Norcross-tied companies for moving to or staying in Camden, according to the task force.

“There’s an overwhelming desire on behalf of taxpayers all over the state, that they want to say ‘hey wait a minute, I want to make sure that I understand where my money went’,” Murphy added. “And we won’t apologize for helping them figure out the answer to that question.”