By Joshua Burd
A financial services firm has proposed leasing more than 215,000 square feet in Morris County with the help of a 10-year, $22.2 million tax credit under the state’s expiring incentive programs, as lawmakers gathered this week to consider an extension of the subsidies.
The state Economic Development Authority on Tuesday approved the incentive package for the company, CIT Bank N.A., in connection with a potential 215,418-square-foot lease at 340 Mount Kemble Ave. in Morris Township. Currently located in Livingston, the company is seeking a more modern space for more than 700 employees and a projected 137 new positions, but is also considering an alternate location in White Plains, New York.
The EDA noted in a board memorandum that the White Plains location offers favorable rent terms and New York State incentives, along with its proximity to the company’s New York City headquarters. New Jersey is the more expensive option, the authority added, estimating that keeping CIT Bank in the Garden State would have a net benefit to the state of $310 million over 20 years.
The proposed location, which is just outside Morristown, is part of a vacant, 400,000-square-foot former AT&T property that was acquired in 2017 by Onyx Equities LLC and PCCP LLC. The investment group planned to transform the property through sweeping exterior and interior renovations, seeking to attract office users that wanted state-of-the-art space.
CIT’s application was among several that were approved Tuesday under the Grow New Jersey program, which sunsets on July 1. The state’s incentives and the EDA have come under fire in recent months — with Gov. Phil Murphy among the most vocal critics — amid concerns about billions of dollars in tax credits that were approved under former Gov. Chris Christie and an alleged lack of oversight by the authority.
Murphy, who has proposed a package of new, scaled-down incentives, has also assembled a task force to investigate potential abuse by tax credit recipients and has installed a new board chairman at the authority. His criticism has led to clashes with fellow Democrats in the Legislature, who have championed the incentives and are against wholesale changes to the programs.
On Thursday, the Assembly Commerce and Economic Development Committee unanimously approved a bill that would extend Grow New Jersey and the Economic Redevelopment and Growth program, in hopes of buying time to negotiate a long-term solution with Murphy. The Assembly Appropriations Committee was slated to consider the bill this afternoon, although Murphy is expected to veto the legislation if it is approved by the full Legislature.
The measure, A5343, would extend the programs to July 1, 2020, although legislative leaders reportedly planned to amend the date to Jan. 31.
This week’s EDA meeting also included an approval for Zipdrug Inc., a four-year-old health care technology startup that has proposed moving to Jersey City from Manhattan. The company, which was awarded a 10-year, $6.3 million tax credit, has said it was considering an 11,552-square-foot lease at 30 Montgomery St., along with an alternate location in Purchase, New York.
EDA officials said Zipdrug has an immediate need for a sophisticated, large-scale back office operation as part of a planned second-quarter expansion, which would also serve as its new headquarters. New Jersey is the more expensive option, the EDA said, while noting that the move to Jersey City would have an estimated net benefit to the state of $3.5 million.
Murphy Partners LLP represented Zipdrug in its application to the EDA. The authority said the company, which uses technology to improve on how pharmacies and health insurance companies work together, is backed by investors in health care.
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