For the second time in six months, the New Jersey Economic Development Authority approved a 10-year, $40 million grant to entice Honeywell International Inc. to keep its headquarters in the Garden State.
The new Grow New Jersey grant approved today replaces an award approved in September, and would keep 1,016 existing jobs in the state.
In September, Honeywell was considering leaving its 1.1 million-square-foot headquarters in Morris Township, which the company said was roughly twice as much space as it needed. After considering out-of-state locations, Honeywell decided to consolidate into one building on its existing site and redevelop the rest into townhouses and expanded office space.
The redevelopment required zoning changes, which the township approved. But concerned residents in November filed a lawsuit seeking to overturn the zoning change. The resulting delay prompted Honeywell to change its plans, announcing last month that it would abandon the Morris Township site and instead move to a 475,000 square-foot facility in Morris Plains. The site is currently owned by Johnson & Johnson.
A judge threw out the zoning lawsuit last week.
Tim Lizura, EDA president and chief operating officer, said the new application supersedes the previous one, so it won't cost the state any additional money than was previously approved.
Lizura said EDA staff gave the second application the same review it gives a new application. He said the previous approval didn't help or hurt the company.
"I think we're agnostic to that," he said. "We look at this application as a brand-new application."
Honeywell told the EDA it also considered building a new 350,000 square-foot facility in Pennsylvania's Lehigh Valley, but prefers the Morris Plains site. Moving to Morris Plains will cost about $93 million, the company said, including about $51 million to renovate and fit out about 400,000 square feet of the new site.
Though the award is intended to keep jobs in the state, rather than bring new jobs, EDA estimates the project will yield a net benefit to the state of $336.4 million over 15 years.
The lone other incentive item on Thursday's agenda was for a Business Employment Incentive Program award of $190,000 over 10 years to Brooklyn, N.Y.-based American Stock Transfer and Trust Co. The company is considering consolidating its Philadelphia and Lyndhurst offices in Clifton, which would bring 30 new jobs to the state — more than doubling its current New Jersey employment base.
In other business, EDA also announced clarifications to the rules of its popular Technology Business Tax Certificate Transfer Program, commonly known as the net operating loss program. The program lets technology and biotech companies with fewer than 225 employees sell their net operating losses or research and development tax credits to other profitable companies, which can use the credits to offset their taxes. The program is designed to create a new source of much-needed capital for emerging tech companies.
However, agency CEO Michele Brown said some applicants were confused about a couple of requirements. For instance, the program requires applicants to have a minimum number of full-time employees, depending on how long they've been in business. But Brown said some applicants were unsure whether temporary employees qualified.
"With respect to the 'full-time employee' term, we want to make sure that companies understand that there's a certain permanence to our definition of a full-time employee, that it's not filled by a summer employee, or by an intern or by someone who's going back to college," she said. "You can't circumvent the rules by putting someone in who only expects to work for a couple of months."
The board also clarified what it means when it says applicants must own, have filed, or have license to use "protected proprietary intellectual property."
Under the clarified rules, if applicants are licensing the intellectual property, they must have exclusive control over it. Also, the intellectual property, whether owned or licensed, must be central to the applicant's primary business.