Posted: Apr 20, 2011, 1:37 PM
New Yorker for life
Join Date: Jul 2001
Location: Borough of Jersey
NEWARK, N.J. | 2 Riverfront Center | FT | (18) FLOORS
Mayor Cory Booker confirms Panasonic moving headquarters from Secaucus to Newark
Panasonic plans to move into a building on Raymond Boulevard in Newark set to be built in the lot pictured in the center of this January photo.
April 20, 2011
Global electronics giant Panasonic will be moving its North American headquarters from Secaucus to Newark, Mayor Cory Booker has confirmed, marking one of the biggest development coups of his administration.
"It’s historic. We’ve been seeing so much progress in the last four years," Booker said Tuesday. "This is heralding to the globe that Newark is one of the most significant players on the Eastern Seaboard."
The official announcement to relocate its 800 employees to Newark is expected to be made today at a news conference with Booker, Lt. Gov. Kim Guadagno, Panasonic North America CEO Joseph M. Taylor and other officials.
The move comes after a debate over whether state incentives were appropriate for a company that threatened to leave New Jersey but ultimately chose to stay. Panasonic had said it was eyeing space in Brooklyn, Atlanta, Chicago and California after its current lease expires in March 2013.
Panasonic qualifies for a $102.4 million Urban Transit Hub tax if it brings at least 250 jobs to Newark by 2016 and creates an additional 200 jobs within 10 years, according to an EDA memo. If no new jobs are created, Panasonic will only qualify for 80 percent of the tax credit. But the company has said the 800 jobs it has in Secaucus were "at risk" if Panasonic moved out of state. The authority concluded those jobs can be considered new jobs, the memo said.
Panasonic spokesman Jim Reilly has said the company needs to relocate "to meet its business objectives." Its headquarters include corporate and marketing offices, daily operations and some testing space.
As part of its application, Panasonic said it would sign a 15-year lease for nearly 250,000 square feet of a new office tower at a shovel-ready site at the intersection of Raymond Boulevard and McCarter Highway, which will become Two Riverfront Center. Matrix Development Group, based in Cranbury, and SJP Properties, from Parsippany, own the land, and the proposed 410,000-square-foot building will cost an estimated $190 million, according to the memo. Designs of the building in 2005 called for up to 18 stories.
The EDA estimated the project will bring approximately $222.8 million to Newark in taxes and one-time construction costs over 11.25 years, the memo said.
Newark is likely offering its own financial incentives, but Stefan Pryor, deputy mayor for economic development, would not offer specifics, citing today’s formal announcement.
The corporation’s current landlord, Hartz Mountain, is not letting its tenant leave without a fight. The company filed an appeal with the state Superior Court on March 31, arguing the EDA acted outside the scope of its authority and its decision "highlights significant deficiencies" in the approval process. Secaucus filed a similar appeal.
Last week, Panasonic asked the court to expedite the case and to provide a final decision on or before Sept. 30, according to court documents. Attorney General Paula Dow also filed a motion asking the court to consolidate and accelerate the appeal.
Secaucus Mayor Michael Gonnelli said Tuesday he is "saddened" by the news.
"We thought the intention of the legislation was to bring in new businesses to New Jersey, not to hurt one community to benefit another," he said. "It’s going to create a pretty big void once they decide to pick up and move."
Plus, the Panasonic case will encourage other corporations to seek lucrative incentives for intra-state moves, said Allen Magrini, senior vice president with Hartz Mountain.
"We compete for tenants all the time, and you win some, you lose some," Magrini said. "But to have the state subsidize another developer or to move a tenant within the state for $102 million, it’s unacceptable and creates an uneven playing field."
Ted Zangari, a corporate real estate attorney who helped write the Urban Transit Hub tax credit legislation, said the program was designed to benefit the whole state by promoting smart growth and getting ratables to nine of the state’s neediest cities.
"The ultimate competition is between New Jersey and our neighboring states," Zangari said. "If a business is considering a relocation or expansion in New Jersey, there are good policy reasons for the state to attempt to drive that location decision through super-sized incentives to a transit-friendly site within one of our financially-distressed cities."