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Despite a long list of Economic Opportunity Act bonuses to spur development in Camden, one real estate insider said it's still a tough sell — and that might be understating it.
The problem: the requirement for prevailing wages during construction in projects that receive incentives, the person said. The source said in the struggling South Jersey city, "virtually the entire benefit of the tax credit is nullified by the fact that you have to be union."
"That makes a huge difference because you need a subsidy to make it work in Camden," the person said. "Up in Hudson County … it doesn't affect you that much because most of those big buildings are union. And the rents and the condo prices are high enough that you could still make a pretty good profit."
On the Gold Coast, "you're basically taking the incentive and handing it to the unions, and you make about the same money you would have made anyway," the source said. "In Camden, you really need the incentive."
The Economic Opportunity Act, which was signed into law about two weeks ago, at one point required prevailing wages for maintenance workers and other post-construction services. But Chris Christie nixed the provision before returning it to lawmakers in early September.
Getting around Super ban
With the state unlikely to get the federal ban on sports betting overturned ahead of February's Super Bowl, the talk is starting to turn to how New Jersey might instead get around it.
The idea, as one insider shares it, goes something like this: The Legislature repeals the related statutes to the sports betting ban and forms a private regulatory body consisting of the state's racetracks and casinos, which would be able to offer sports wagering.
Such a body, the insider said, "would not offend PASPA" — the federal ban — and if moved on quickly enough, could be ready in time for the big game on Feb. 2.
With voters having already given sports wagering their blessing, the Legislature going forward with such a plan shouldn't cause too much of a public stir, the insider said.
A federal appeals court earlier this month ruled 2-1 against New Jersey's bid to overturn a ban on sports betting. Christie has promised to take it to the U.S. Supreme Court.
Voters in 2011 approved a measure to legalize sports bets at the tracks and casinos.
Crowdfunding creates chaos
The initial stage of crowdfunding is here, and so far, it's been met by a mix of excitement and panic, according to an attorney who advises companies seeking such investment vehicles.
Crowdfunding went live — at least partly — Sept. 23, as the SEC lifted an 80-year-old ban preventing small, private companies from publicly advertising their investment needs. Such companies can now solicit through formats like social media or print publications.
An attorney said entrepreneurs are delighted to be operating under fewer restrictions. But institutional groups, like angel investors, are sweating a bit.
"Angel investors are concerned that crowdfunding is going to disrupt their business model," the source said. "Of course it is. It will disrupt their business model considerably. It seems likely to me that, as crowdfunding takes off, there are almost by definition going to be fewer deals available to existing institutional investors, because deals are going to be funded over the Internet, without intermediaries."
Crowdfunding became legal as part of the federal JOBS Act, but it's only one portion of that legislation. Full implementation of the law, designed to assist in growing business startups, is likely at least a year away.
Grapevine reports on the behind-the-scenes buzz in the business community. Contact Editor Tom Bergeron at email@example.com.