Partnering with Municipalities For Economic Development

1. Partnering with Municipalities For Economic Development State Resources May 3, 2012 Margie Piliere Director-Finance & Development

2. EDA & New Jersey Partnership for Action

3. Partnership for Action Lt. Governor Kim Guadagno 3

4. EDA • New Jersey’s “Bank for Business” • Small Business Assistance • Incentives to Retain and Grow Jobs • Incentives to Redevelop Communities • Clean Energy Financing • Assistance to Bio/Tech Firms

5. Results YTD 2011* YTD 2010 *Total Business Incentives Activity through December 13, 2011 EDA Board meeting (BEIP/BRRAG/STX).

6. Choose NJ Mission: CNJ is an independently funded and operated 501(c)(3) nonprofit corporation created to encourage and nurture economic growth throughout New Jersey, including a focus on making the state’s most distressed cities engines for growth and opportunity. • Leadership and Funding • 16-person Board of Directors oversees program; • Leaders of a broad range of NJ organizations, Fortune 500 • companies and privately-held enterprises; • Board has pledged nearly $7 million over three years to launch effort. • CNJ is attracting business to NJ by: • Positioning NJ as a world-class leader in the competitive global market; • Championing the State’s economic development initiatives; • Creating a surge of awareness that NJ is a state that “means business”

7. Business Action Center • A “One-Stop-Shop” for Business • A business advocate focusing on retention and attraction; • Identifies and matches State programs and resources to • business’ needs; • Provides site selection services; • Maintains databank of available properties; • Assists with permitting and regulatory issues; • Advances global competitiveness of New Jersey Companies; • Provides trade assistance and support.

8. Making New Jersey a Home for Growth Governor Chris Christie’s Economic Development Initiatives

9. Financing Small, Mid-Sized Businesses and Not-For-Profit Organizations

10. State Small Business Credit Initiative (SSBCI) • In October 2011, Governor Christie and Lt. Governor Guadagno announced • that New Jersey was allocated $33.8 million in funding through the SSBCI, • part of the Federal Small Business Jobs Act of 2010. • The intent of the program is to create jobs and strengthen state lending • programs, which mirrors New Jersey’s recent efforts to enhance its support of • the state’s small business community. • The funds will be received by the New Jersey Department of Treasury in three • tranches over two years, based upon at least an 80% commitment of the first • and second distributions. • Through an MOU, the EDA will use the funds to deploy loans, credit • guarantees and loan participations through its existing lending programs. • Funds will be targeted to small businesses, small manufacturers, and women • and minority-owned enterprises, with a particular focus on businesses that are • located in underserved communities throughout New Jersey.

11. Citibank Affinity Program* IF YOU ARE:A New Jersey-based business with annual sales of approximately $5-$50 million that is either looking to or currently engage(d) in international trade, can commit to job creation/retention in New Jersey (One job per $50,000 of Authority exposure), and have been in business for at least two years AVAILABLE ASSISTANCE: $50 million in low interest Citibank loan financing with $10 million EDA guarantee.  TO BE USED FOR:Equipment loans and Real Estate. MAXIMUM AMOUNTS: EDA will guarantee up to 50% of the Citibank loan, not to exceed $1.5 million. EDA will guarantee up to 50% of Citibank line of credit, not to exceed $500,000. Maximum EDA exposure per borrower/related entities is $2 million. *This program is scheduled to launch in March 2012.

12. Statewide Loan Pool IF YOU ARE:A New Jersey-based business that creates or maintains jobs, located in a financially targeted municipality, or representing an industry which the EDA has targeted for assistance, including manufacturing, industrial, high-tech and more. AVAILABLE ASSISTANCE: Your financial institution can request a participation and/or guarantee through the EDA.  TO BE USED FOR:Fixed assets and permanent working capital. MAXIMUM AMOUNTS: EDA can participate in or guarantee up to 50% of a bank loan. The maximum EDA exposure is: Fixed Assets Loan: $1.25 million   Guarantee: $1.5 million Total Exposure: $2.75 million Working Capital Loan: $750,000   Working Capital Guarantee: $1.5 million Total Exposure: $2.25 million 12

13. Main Street Assistance Program This program provides financial support to commercial banks in New Jersey to provide financial assistance to small and mid-sized businesses and not-for-profit organizations with projects in the State.  IF YOU ARE:A small or mid-sized business or not-for-profit organization in operation in New Jersey for at least two years and need financing. AVAILABLE ASSISTANCE: Direct loans/Loan participationsup to 25% of the total financing (not to exceed $1 million for fixed assets and $750,000 for working capital). Loan guaranteesup to 50% of a bank loan (not to exceed $2 million for fixed assets and $1.5 million for working capital). Line of credit guaranteesup to 50% of the line of credit amount (not to exceed $500,000). TO BE USED FOR: Fixed assets, refinancing, working capital *Total EDA exposure under the Main Street program not to exceed 50% up to a maximum of $2 million.

14. Small Business Fund • An expedited approval process helps the Small Business Fund program provide below-market rate financing to applicable businesses through direct loans or guarantees, with the choice of a variable or fixed interest rate. • IF YOU ARE: A creditworthy small, minority-owned or women-owned business in New Jersey in operation for at least one year or not-for-profit corporation in operation for at least three full years, • YOU MAY QUALIFY FOR: • Small Businesses - Up to $300,000 for credit scores greater than or • equal to 700; Up to $125,000 for credit scores greater than or equal to • 650.  • Not-for-Profits - Up to $300,000 with 1.10 debt service coverage ratio. • TO BE USED FOR:Fixed assets and working capital 14

15. Bond Financing • IF YOU ARE: A creditworthy manufacturing company, a 501(c)(3) not-for-profit organization, or an exempt facility in New Jersey, • YOU CAN APPLY FOR: Long-term financing under the Bond Financing Program. • IN THE AMOUNT OF: • $500,000 to $10 million in tax-exempt bonds for for-profit companies, with • either a fixed or variable interest rate, and terms up to 20 years for real • estate and 10 years for equipment;   • $500,000 with no dollar limit in tax-exempt bonds for qualified not-for-profit • organizations. 15

16. Bond Financing • Eligible Uses: • Tax-exempt bonds for eligible for-profit companies can be used to finance • capital improvements and expansions, including real estate acquisitions, • new equipment, machinery, building construction, and renovations. • Tax-exempt bonds for not-for-profit organizations seeking capital to • expand community services can be used to finance land and building • acquisitions, new construction and renovations, equipment purchases, • debt refinancing and working capital. • Government tax-exempt bonds can be used for projects that are owned • and operated for the benefit of local, county and state government bodies. • Taxable bonds may be used for working capital and debt refinancing, and • are permitted only under certain circumstances for tax-exempt financing • for not-for-profit borrowers. 16

17. Edison Efficiency Revolving Loan Fund (EE RLF) • Program Summary • New Jersey-based commercial, institutional or industrial entities • (including 501(c)(3) organizations) that have received an approved • Energy Reduction Plan under the BPU’s Pay for Performance program • may be eligible for supplemental financing through the EE RLF.  Also • eligible are those entities participating in the BPU’s Large Energy Users • Pilot Program.  Financing, in the form of low-interest loans, can be • used to support up to 80% of total eligible project costs, not to exceed • $2.5 million or 100% of total eligible project costs from all public • State funding sources. • Use of Funds • Whole-building energy improvements.

18. Clean Energy Manufacturing Fund (CEMF) • Up to $3.3 million in grants and low-interest loans are available to • New Jersey clean technology manufacturers under two separate • components: • - Up to $300,000, not to exceed 10% of total CEMF project funds • requested, is available as a grant to assist with the manufacturing • site identification and procurement, design and permits. 20% of • the grant is available up front as seed funds at closing. • - Up to $3 million as a 10-year loan with repayments to start at the • beginning of the 4th year, to support site improvements, • equipment purchases, and facility construction and completion. • One-third of the loan may convert to a performance grant if milestones • are met during the first three years. No more than one-half of the funds • may be advanced prior to production on the manufacturing line.

19. SEARCH Day Program • Founded in 1971 by concerned parents and professionals, SEARCH was the • first not-for-profit State approved 12-month school in New Jersey specializing • in programming for individuals with autism. • EDA issued tax-exempt bonds totaling $2.75 million to help SEARCH acquire • nine acres and 23,000 square feet of building space to further expand its • campus in Ocean. The bond was directly purchased by TD Bank.

20. Provident Group – Montclair Properties • Provident is developing 567,000 square feet of student housing in two • buildings at Montclair State University, a 25,000-square-foot student dining • facility to seat 600, and various student amenities such as multipurpose • space and outdoor courtyards. • Bonds issued include: • -$211,390,000 Senior Series 2010A tax-exempt serial and term bonds • -$23,600,000 Subordinate Series 2010B tax-exempt term bonds 20

21. Main Street Examples • A $2.2 million Capital One Bank loan, • supplemented by a $700,000 EDA loan, • helped 866 Bayway Circle, LLC acquire a • former gas station in Elizabeth and develop • a new Laundromat and Capital One Bank • branch. 12 new jobs. Laundry Warehouse, Bayway Circle Steel processing and distribution company in Camden received a $1.3 million Sun National Bank loan, supplemented by a $500,000 EDA loan, to support its working capital needs. 28 jobs maintained. Paterson-based retailer of children’s supplies and clothing received a $500,000 working capital line of credit from Sun National Bank with a 50% EDA guarantee. 15 jobs maintained. 21

22. Small Business Services

23. EDA-UCEDC Partnership • Strategic partnership to stimulate economic growth for small businesses • and expand the array of training and technical assistance services • available. • Training Workshops (available in English and Spanish) • Business Basics Workshops • Entrepreneurial Training Initiative • ISO 9000:2001 • Business Mentoring - One-on-one businesscounseling customized to meet the specific needs of businesses. • Government Procurement - Helps businesses secure government contracts and subcontracts through specialized trainings, daily electronic bid-match, and one-on-one counseling throughout the bidding and proposal process. • Lending - Microloan program and business growth fund to address business needs at every stage of growth.

24. New Jersey Small Business Development Centers • The New Jersey Small Business Development Centers (NJSBDC) • network, comprised of 11 centers across the state, provides • comprehensive services and programs for small business in New Jersey. • NJSBDC staff and practicing business consultants help established small • business owners and aspiring entrepreneurs to develop business plans • and marketing strategies, learn accounting and financial analysis, find • capital financing, identify new markets, and expand their operations. • NJSBDC provides one-to-one management consulting and counseling, • training, loan packaging services and specialized assistance in • procurement, technology commercialization, E-Business presence, and • international trade. • NJSBDC leverages public and private funding sources, further maximizing • resources for the small business community.

25. Expansion/Retention Incentives

26. Business Employment Incentive Program (BEIP) BEIP is a powerful incentive for encouraging businesses to locate and expand in New Jersey. Approved businesses receive annual cash grants based on the number of new jobs they have created in New Jersey.   IF YOU ARE:An economically viable expanding or relocating business that creates jobs in New Jersey, YOU CAN ELECT:To secure annual incentive grants via BEIP. IN THE AMOUNT OF:Up to 80% of the total amount of state income taxes withheld by the company during the calendar year from the new employees hired, awarded for up to 10 years.

27. Business Employment Incentive Program (BEIP) • Program Details: • In order to qualify for a BEIP, businesses must create at least 25 new jobs • within a 2-year period; emerging high technology and biotech companies’ • eligibility threshold is 10 new jobs. A business must also demonstrate that • the BEIP grant is a "material" factor in moving the job expansion or • relocation forward in New Jersey, that it is financially viable. • The standard BEIP incentive is limited at 50% of the state income taxes • withheld on the newly created jobs. Companies that meet certain • Smart Growth objectives can have their grant boosted to 80%. • Qualifying businesses may be eligible for up to 10 years worth of grants, • and must maintain the project and the jobs in New Jersey for at least 1.5 • times the number of years the grant is in effect. 27

28. Business Retention and Relocation Assistance Grant (BRRAG) • If You Are: A business relocating operations within New Jersey and retaining jobs, or a business maintaining jobs at a current location and making a qualified capital investment… • You Can Apply For: Grants of corporate business tax credits through the BRRAG program. • In The Amount Of: Up to $2,250 per year for up to six years, per job retained in the State. • Award amount is dependent on application of "bonus credits” that • may be available for the relocation of jobs to urban centers, and/or • for a capital investment at least twice that of the value of the • awarded credits. • The number of times the yearly tax credit amount is awarded is • dependent on the number of retained jobs.

29. BRRAG Eligibility Requirements • A company must: • Retain a minimum of 50 full-time jobs. • Commit to remain in NJ for the tax credit term and an additional five years.  • Offer its employees healthcare benefits. • Demonstrate that the grant is a "material factor" in moving the relocation • project forward in NJ.  • Demonstrate that the capital investment and job retention resulting from a • proposed project would yield a net positive benefit to the State. • Enter into any construction contracts associated with the project using • "prevailing wage" labor rates and affirmative action requirements. • Have operated continuously in NJ in whole or in part, in its current form or • as a predecessor entity, for at least 10 years.  29

30. BRRAG Program Details • The total amount of credits that can be applied against a single • company's tax liability in a fiscal year may not exceed $10 million. • Eligible jobs must be subject to New Jersey income tax withholdings • (Pennsylvania residents are not eligible). • Applicants can designate different companies to receive the tax • credit; however, the recipients must be part of the applicant's • "controlled group“ approved by the EDA.  • BRRAG recipients with unused amounts of BRRAG tax credits may • sell the unused portion to affiliated or unaffiliated businesses under • the BRRAG Tax Credit Certificate Transfer Program. 

31. Sales and Use Tax Exemption Program (STX) The STX is often used in conjunction with the BRRAG and encourages economic development and the preservation of jobs that currently exist in New Jersey. IF YOU ARE: A company with 1,000 or more employees that needs to make purchases for construction and renovation of a new business location. YOU CAN APPLY FOR: A sales tax exemption certificate. Note: Applies only to property purchased for installation in approved project. TO BE USED FOR: Purchase machinery, equipment, furniture and furnishings, fixtures and building materials other than tools and supplies for placement at the project location without the imposition of sales and use tax until the new facility is functional.

32. Church & Dwight Co., Inc. • Church & Dwight Co., Inc. currently has its global headquarters and R&D • center in Princeton and a manufacturing plant in Lakewood. The company, • which is considering moving its Princeton operations to Pennsylvania, was • recently approved for a $6.57 million BRRAG to support the retention of its • 974 New Jersey-based employees. • The company was also approved for a $1.5 million BEIP to support the • creation of 105 new jobs in Princeton, as well as a $719,000 BEIP to • support the creation of 28 new jobs at its Lakewood location.

33. Pinnacle Foods Group, LLC • Pinnacle Foods invested $6 million to expand into an 85,000-square-foot facility • in Cherry Hill, which will ultimately house approximately 270 employees. • The maker of brands including Vlasic and Duncan Hines moved to its new • location in September with the help of a nearly $920,000 BEIP grant for the • creation of 90 new jobs and a $182,600 BRRAG benefit for the retention of 133 • jobs in New Jersey.

34. Redevelopment

35. Economic Redevelopment and Growth (ERG) Grant If You Are: A developer with a project in Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), a center designated under the State Development and Redevelopment Plan, a pinelands regional growth area, pinelands town management area, a pinelands village, or a federal installation area established pursuant to the pinelands comprehensive management plan; a transit village (local incentive grants only); federally owned land approved for closure by the federal Base Realignment Closing Commission; an area zoned for development pursuant to a master plan or subject to a redevelopment plan adopted by the New Jersey Meadowlands Commission; and, any land owned by the New Jersey Sports and Exposition Authority within the boundaries of the Hackensack Meadowlands District, You Can Apply For: An incentive grant up to 75% of the annual incremental State Tax and/or Local Tax revenue.

36. Economic Redevelopment and Growth (ERG) Grant To Be Eligible: • The redevelopment project must be located in a qualifying area. • The developer must not have began any construction at the site of the • proposed project prior to submitting an application, except: • if the EDA determines that the project would not be completed otherwise; or, • if the project is to be undertaken in phases, a developer may apply for phases • for which construction has not yet commenced. • For any project consisting of newly-constructed residential units, then • developer is required to reserve at least 20% for occupancy by low or • moderate income households (as defined by statute). • A project financing gap exists. • The overall public assistance provided to the project will result in net • benefits to the municipality where the project is located or the State. 36

37. Economic Redevelopment and Growth (ERG) Grant Program Details • The annual percentage amount of reimbursement will not exceed 75% • of the annual incremental State revenues. • The term of each approved state and local redevelopment incentive • grant agreement may extend for up to 20 years; however, the combined • amount of reimbursements cannot exceed 20% of the total cost of the • project, exclusive of publically-owned infrastructure, and a developer • seeking an incentive grant is required to make an equity participation for • at least 20% of the project's total cost. • The developer must submit satisfactory evidence of actual project costs, • as certified by a certified public accountant and evidence of a • permanent certificate of occupancy, prior to the first disbursement of • funds under the agreement.

38. Urban Transit Hub Tax Credit Program • If You Are: A developer, owner, or tenant making a qualified capital investment within a designated Urban Transit Hub… • You Can Apply For: Tax credits equal up to 100% of the qualified capital investments made within an eight year period. • Taxpayers may apply 10% of the total credit amount per year over • a ten year period against their corporate business tax, insurance • premiums tax or gross income tax liability. • Tax credits may be sold under the tax credit certificate transfer • program of not less than 75% of the transferred credit amount.  • Total credits approved under this program are capped at $1.5 • billion, with $150 million allocated towards residential projects • which may receive a 35% credit.

39. Urban Transit Hub Tax Credit Program To Be Eligible: • Developers or owners must make a minimum $50 million capital investment in • a single business facility located in one of the designated hubs. In addition, at • least 250 employees must work full-time at that facility. • Tenants must occupy space in the facility that represents at least $17.5 million • of the capital investment and employ at least 250 full-time employees in that • facility. Up to three tenants may aggregate to meet the 250 employee • requirement. • Applicants must demonstrate that the state's financial support will yield a net • positive benefit to both the state and the eligible municipality. • S corporations, limited liability corporations and partnerships are eligible; • however, tax credits cannot be applied against an individual's New Jersey gross • tax liability.

40. Urban Transit Hub Tax Credit Program Program Details • Urban Transit Hubs are located within ½ mile of New Jersey Transit, PATH, • PATCO, or light rail stations in: • Eligibility is expanded to locations within these municipalities that have • active freight adjacent or connected to the proposed building, and utilized • by the occupant. Camden expanded to one mile. • Businesses can apply for the tax credits within five years of the program’s • January 13, 2008 effective date and satisfy the capital investment and • employment conditions within eight years of that date.

41. Grow New Jersey IF YOU ARE: A business creating or retaining jobs in New Jersey and making a qualified capital investment at a qualified business facility. YOU CAN APPLY FOR:  Grants of corporate business tax credits for job creation/retention through the Grow NJ program.IN THE AMOUNT OF:  Up to $8,000* per each new or retained full time job per year up to 10 years, not to exceed $40 million over the grant term/$4 million per fiscal year. * Qualified eligible businesses may receive tax credits of $5,000 per year for a period of ten years for each new or retained full-time job to be located at the qualified business facility as long as the number of full-time jobs meets or exceeds the minimum requirement.  In addition, a bonus award of up to $3,000 per job per year for a period of ten years may be awarded for each new or retained full-time job if the qualified eligible business meets additional criteria.

42. Grow New Jersey • To Be Eligible: • Make capital investments of at least $20 million at a qualified business facility at which it will employ at least 100 full-time employees in retained full-time jobs, or create at least 100 new full-time jobs in an industry deemed by the EDA to have significant impact on the State economy.  • Locate the project in a Qualified Incentive Area. • Demonstrate that the award of the tax credit is a "material factor" in the company's decision to create or retain the minimum number of full-time jobs. • Demonstrate that the capital investment and the resultant creation of eligible positions will yield a net positive benefit of at least 110 percent of the requested tax credit amount.  • Enter into any construction contracts associated with the project using "prevailing wage" labor rates and affirmative action requirements.

43. Grow New Jersey • Qualified Incentive Areas: • Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), and any urban, regional, or town designated center locations under the State Development and Redevelopment Plan; • Former military bases closed under the federal Base Closure and Realignment Act; • Vacant commercial office, laboratory, or industrial properties having over 400,000 square feet for at least one year or impacted by Urban Transit Hub Tax Credit Program approval; or • Areas “targeted for development” in the New Jersey Meadowlands, Highlands, and Pinelands, as specified in the acts establishing these areas.

44. UEZ Energy Sales Tax Exemption IF YOU ARE: A UEZ-certified manufacturer employing at least 250 full-time workers, at least 50% of whom are involved in the manufacturing process. YOU CAN APPLY FOR: An exemption from the sales and use tax for electricity and natural gas utilities, both the commodity and its transmission, consumed at the UEZ-certified location. IN THE AMOUNT: The sales and use tax otherwise applied to the energy. • PROGRAM DETAILS: • The business must be a manufacturer and must continue to employ at least 250 • full-time workers, 50% of whom are involved in the manufacturing process. • The business will file an annual application with the EDA and must receive tax • clearance and pass a site visit. • The sales and use tax exemption applies to only electricity and natural gas • consumed at the UEZ-certified manufacturing locations and cannot be applied to • oil or other energy supplies.

45. Revel Atlantic City • Revel Atlantic City was approved for up to $261.3 million over 20 years • through the Economic Redevelopment and Growth (ERG) Program. • The $2.8 billion project involves the creation of an entertainment resort on • 20 acres of beachfront property in the South Inlet of Atlantic City. • Expected to result in the creation of 5,400 construction jobs, 5,500 full- • time jobs and an estimated $3.2 billion in new tax revenue.

46. Gateway Transit Village • The Gateway Transit Village is a mixed-used development located adjacent • to the New Brunswick Train Station that will include a parking structure; • Class A office space; destination retail, and for-sale and rental units. • The project was approved for up to $55.1 million through the Urban Transit • Hub Tax Credit program to support the $326 million redevelopment. The • project is expected to create over 450 permanent jobs and 3,000 • construction jobs.

47. Saker ShopRite • A new, world class Shop Rite opened in Somerville in October with the help of $5 • million through the Economic Redevelopment and Growth (ERG) program. This • marked the Borough’s first and only supermarket since Pathmark closed in 2007. • 235 employees have been hired to date (will create 300 jobs in total); approximately • 200 construction jobs were created as well. • The $28.1 million store, which was built with the latest sustainable technologies, • represents the first element of the Borough’s West Main Street Redevelopment • project, and is expected to serve as the anchor for a future shopping and residential • complex. 47

48. Contact the Partnership for Action: • Choose New Jersey • (609) 297-2200www.choosenj.com • New Jersey Business Action Center • (866) 534-7789 • www.NewJerseyBusiness.gov • New Jersey Economic Development Authority • (609) 858-6700 • www.njeda.comwww.njeda.com