JPMorgan, RBC Win N.J. Tax Grants Valued at $300 MillionTerrence Dopp
New Jersey awarded JPMorgan Chase & Co. and RBC Capital Markets $300 million of tax credits over 10 years after the companies pledged to create 1,900 new jobs in Jersey City, across the Hudson River from Manhattan.
The Economic Development Authority approved annual grants of $22.5 million for JPMorgan and $7.9 million for RBC at a meeting today in Trenton. JPMorgan’s project would add 1,000 jobs and retain 2,612, while RBC’s would add 900 positions, according to their applications.
JPMorgan, in its application, said it has been evaluating the location of its expanding regional technology and operations hub. Its options included consolidating multiple New Jersey facilities into one in Jersey City or relocating most of those operations to lower-cost locations in Delaware and Ohio.
RBC leases space in five locations in Manhattan with about 2,700 employees. With leases expiring at One Liberty Plaza and the World Financial Center, it began evaluating options, including renovating and expanding space in Jersey City and in Minnesota. While the one-time cost of expanding would be greater in Minnesota, annual operating costs would be higher in New Jersey, according to its application.
“Financial services up in the Jersey City and Hoboken area has always been a sweet spot for us,” Lieutenant Governor Kim Guadagno, the state’s top economic-development official, said in an interview. “It’s a perfect story: As New York’s financial-services sector looks for other places to go, they want to look some place convenient to New York.”
The median salary of $120,000 for the covered positions at JPMorgan, listed on its application, is more than triple New Jersey’s median of $35,928, according to the Census Bureau. RBC listed the median salary at $126,000.
Financial positions have become increasingly coveted as states look to poach jobs from neighbors and even far-away locales. Texas Governor Rick Perry, a Republican, today said his state is actively recruiting New York companies to move there.
“This would not impact the location of our U.S. headquarters, which remains in lower Manhattan and will continue to house the majority of our employees,” RBC spokeswoman Elisa Barsotti said in a statement. “We are exploring an upgraded location to relocate our data center from our ancillary location at One Liberty Plaza and support function positions.”
The JPMorgan project is expected to bring a net benefit to the state of $1.1 billion over the life of the package and will enlarge the company’s space in Jersey City to more than 1 million square feet, officials said.
“We’ve invested in this community for nearly two centuries, and this agreement only deepens that commitment for the long term,” JPMorgan Chief Operating Officer Matt Zames said in a statement.
Guadagno, a Republican who serves as the state’s economic development chief, said New Jersey has aggressively courted financial-services jobs with a message to decision makers to keep their New York address and move support jobs to New Jersey.
Jersey City, a community of 254,000 one stop from Manhattan by train, has worked in the past decade to re-craft itself as Wall Street West. Mayor Steven Fulop, 37, worked at Citigroup Inc. and Goldman Sachs Group Inc., leaving after the 2001 World Trade Center attacks to join the U.S. Marine Corps and serve in Iraq.
“Jersey City is leading the state economy in terms of job creation and is the driving force in lifting New Jersey out of the recession,” he said in a statement.
New Jersey has struggled to shake off the lingering effects of the U.S. recession that ended in 2009. Governor Chris Christie’s administration said yesterday that the jobless rate slid to 6.9 percent in April, the first time it has dipped under 7 percent since November 2008. The national level was 6.3 percent.
The state has regained 125,700 jobs, or about half of those lost during the slump. Nancy Mantell, director of the Rutgers Economic Advisory Service, said this month that the state isn’t expected to recover all of them until 2018.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.