Date post: | 19-Jan-2015 |
Category: |
News & Politics |
Upload: | new-jersey-future |
View: | 246 times |
Download: | 2 times |
New Jersey Future Redevelopment Forum
MARCH 1, 2013
Using Value Capture Tools to Spur Redevelopment
Partnership for Action
Lt. Governor Kim Guadagno
State, County and Local Partners
New Jersey Business
Action Center
New Jersey’s Bank
Financing small and mid-sized businesses
Administering State tax incentives to retain and grow jobs
Revitalizing communities through redevelopment initiatives
Supporting entrepreneurial development
Courtyard by Marriott Newark Downtown
In September 2012, Tucker Development’s $35 million Courtyard by Marriott became the first hotel in Newark’s downtown in over four decades.
Adjacent to the Prudential Center, the 150-room hotel includes 14,000 square feet of street-level retail; last November, it was announced that Joe’s Crab Shack would occupy nearly 5,400 square feet.
The development project generated an estimated 175 construction jobs and will create between 50-75 permanent jobs through the hotel and retail operations.
Courtyard by Marriott Newark Downtown
Economic Redevelopment & Growth Grant $6.58 million
Redevelopment Area Bonds $6.56 million
Recovery Zone Facilities Bonds (Essex County) $4.73 million
Equity* $10.0 million
First Mortgage $15.6 million
Financing Sources
*State Pension Fund
Courtyard by Marriott Newark Downtown
Without Incentives With ERG and Hub Market Range
Equity IRR 8.06% 11.10% 15%-20%
Cash-on-Cash Yield 6.18% 6.97% 8%-10%
Based on the expected generation of $28.5 million of incremental direct annual gross income, hotel occupancy and sales taxes over 20 years, and a 75% rebate of eligible taxes, there were deemed to be adequate funds to support the reimbursement of taxes to the project.
Present value of the Net Positive Benefit to the State totals $19.45 million.
Peapod and Imperial Bag & Paper Company
Grow NJ and Urban Transit Hub tax credits helped to nearly fill the 880,000-square- foot warehouse/distribution center that Prologis is building on the site of a former Jersey City landfill. Online grocery seller Peapod and Imperial Bag & Paper Co., which distributes food containers, cleaning and shipping room supplies, signed leases last December to essentially split 740,000 square feet of space at the new facility. In total, these projects represent more than $151 million of capital investment, the creation of 380 new jobs and over 630 construction jobs, and the retention of 450 jobs that were at risk of leaving the Gold Coast.
Peapod Approved for Urban Transit Hub tax credits of up to $34.5 million over 10 years; in any year it does not have 200 new jobs at the site, reduced to $27.6 million.
Eligible capital investment related to the development of Peapod’s space is $90.7 million, based on the net benefit analysis and qualifying cost breakdown.
Net Positive Benefit to New Jersey over 7.5 years is $28 million, using a 6% discount rate; this includes $5.6 million in additional benefits as a result of the 25% bonus factor tied to logistics/warehouse employees, and is based on 470 employees at the project site (90 “at risk”; 380 new).
Net preset value of the award ($25.4 million) is the value of the nominal 10 years of tax credits ($34.5 million), discounted at 6%, providing the 110% net benefits required.
Imperial Bag & Paper Company
Total award of $29.12 million over 10 years; $57.1 million eligible capital investment.
Expected to result in a net benefit to the State of $82.9 million over the 15 years that the company would be committed to keep the jobs in New Jersey.
Grant Calculation
Base Grant Per Employee $5,000
Bonus Increases ($1,000 per; $3,000 max)Industry, Public Transit, and High Salaries $3,000
Total Grant Per Employee $8,000
Eligible JobsNew Jobs:Retained Jobs:
0364
Annual Credit Amount ($4,000,000 max) $2,912,000