Competition among states is a decades-old practice when it comes to economic development. But stepped up efforts in recent years have helped New Jersey retain several of the firms in this year's NJBIZ list of the top privately held companies.
In many cases, the state's arsenal of incentive programs has prevented firms from fleeing the state, adding to a recipe that also includes a better business climate and a responsive state government. Just ask industry giants like Goya Foods and Realogy Corp., which were awarded incentive packages last year to stay in New Jersey.
"This administration has been very receptive, very business-like, and they've been supportive of our effort to stay in the state," said Realogy CEO Richard A. Smith. "So we're signed, sealed and delivered. And I think in part it's due to the governor's office and the governor's personal interest in retaining the company."
Realogy, which owns residential real estate brands like Century 21, had nearly moved to another state in early 2010 when the Chris Christie administration began to lobby for it to stay, Smith said. By April 2011, the Parsippany-based firm was awarded $10.7 million under the state's Business Retention and Relocation Assistance Grant program, along with a $1.4 million sales tax exemption. The firm now plans to move next year to a new 270,000-square-foot global headquarters in Madison.
Goya declined to release details about its new facility earlier this summer, but state officials have said the new 600,000-square-foot building, in Jersey City, would serve as a new headquarters and distribution center. The Secaucus-based food manufacturer also considered a site in Suffern, N.Y., the state Economic Development Authority said, but was awarded an $81.9 million tax credit under the powerful Urban Transit Hub program.
If the move is finalized, Goya would populate the Jersey City facility with more than 300 jobs from Secaucus and 66 jobs from Bethpage, N.Y., the EDA said.
Lt. Gov. Kim Guadagno, who leads the state's economic development efforts, said incentives have given the state an edge as it works to change the business climate here. Since 2010, she said, the state's recipe has included "having our fiscal house in order, enhancements to the incentive programs and streamlining the regulatory process," along with letting companies know they're wanted in New Jersey.
"Certainly the tax incentives allow us to be more competitive," Guadagno said. "Any one of those companies will tell you that they're being actively pursued by other states — other countries, even — to move their businesses out of New Jersey."
One of the state's newest incentives, the Grow New Jersey Assistance program, is quickly making its mark on the NJBIZ Top 100. In mid-June, the EDA awarded Burlington Coat Factory Warehouse Corp. a 10-year, $40 million tax credit to build a new headquarters in Florence. A week later, the 40-year-old company announced its plan to stay rather than move to Pennsylvania, retaining 626 jobs and adding 120 more.
The state also awarded East Windsor-based Conair Corp. a $26.7 million Grow New Jersey tax credit, which is tied to a plan to build a 450,000-square-foot warehouse and distribution center here. Conair also said it was considering Arizona as a location for the center; it had not announced a decision by press time.
Whether the companies are publicly traded or private, Guadagno said, companies "have to have the numbers" when deciding whether to stay, go or expand. The state's incentive programs serve that purpose, she said.
"They need to be able to turn to their shareholders if they're publicly traded, or their investors if they're private … and be able to explain objectively, by the numbers, why they should stay or grow in New Jersey," she said.
Interestingly, one of the companies that was highly touted by the Christie administration — Honeywell International — has reopened the possibility of leaving the state. The Christie team pushed to get the BRRAG incentive expanded to help Honeywell keep its headquarters in Morris Plains, but in May, it filed an application seeking Grow New Jersey credits in order to remain in New Jersey, instead of moving its base to Pennsylvania.
Several companies in this year's list have grown or shifted locations even without state incentives. In November, candy maker Promotion in Motion moved to Allendale from Closter. And the firm announced in June that it plans to add up to 100 jobs at its factory in the Somerset section of Franklin.
Smith said a better business climate and outreach from state leaders also can be important pieces of the puzzle. The state's interest more than two years ago allowed Realogy to keep some 950 jobs in New Jersey. The company has a total work force of 1,300 here, and plans to add an additional 200, he said.
"In a general economic climate that is starting to show signs of promise, if you have just a little incentive coming out of the state government, with some leadership along the lines of economic development, you're going to have a lot of growth," Smith said.