N.Y.C.’s loss of Amazon should be N.J.’s lesson: Bashing Big Business, incentives can cost you big businesses

When the state’s audit of the Economic Development Authority came out in January, some folks felt it was, at best, a contrived exercise to give Gov. Phil Murphy cover to change the state’s tax incentives — cover he didn’t need — and, at worst, stunningly inaccurate.

The $11 billion talking point, after all, has not held up to public or private scrutiny.

Years from now, it may be known as something else: the reason Amazon did not look to New Jersey after pulling out of New York City.

Why would a company that just left a location because public activists railed against an incentive package come to a state where companies taking incentives seemingly are being demonized — despite the fact that the state’s incredible $8 billion package for Amazon is still on the table?

Tom Bracken, who heads the New Jersey Chamber of Commerce, has repeatedly argued that anti-business rhetoric (and regulations) are hurting the state’s chances of landing big companies.

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Tom Bracken of the New Jersey Chamber of Commerce.

“We need to stop the unwarranted negative attacks on New Jersey’s business community,” he said in a recent Op-Ed for ROI-NJ.

“Businesses in our state must deal with one of the highest corporate tax rates in the country, absorb new costs of a higher minimum wage and expanded paid sick leave, the new so-called ‘rain tax’ for the creation of stormwater utilities and manage through a morass of outdated and burdensome mandates.”

We may soon find out if that’s true.

The race for Amazon is not over. Not by a long shot. The rules, however, have changed. And it’s important for everyone to realize that.

So said Jay Biggins, executive managing director of BLS Strategies, a highly regarded national relocation firm based in Princeton.

“I think we probably should take Amazon at its word that it is not looking to relocate this half of HQ to one of the other candidate cities,” he told ROI-NJ.

Instead, Biggins said, Newark should look to be part of the incremental growth that still is coming to the metro area.

“The recommendation wouldn’t be for Newark to try to pursue what Amazon said they’re not doing, but rather to pursue opportunities for growth occurring within the region as Amazon looks to diversify,” Biggins said.

File photo
Jay Biggins of Biggins Lacy Shapiro & Co.

“This is an important region for them, and they have a reason to be here. Then were very clear about that, and they intend to grow in the region. Newark has a reasonable shot at earning some of that growth.”

But it’s not the only city that can make that claim. Biggins said Jersey City is back in the game now, too.

“Don’t leave Jersey City out,” he said. “Newark was one of the finalists, but that game is gone. And all the rules of that game are over.

“Everything’s open. Jersey City absolutely has a reasonable prospect of obtaining some jobs from a share of the growth that they’re planning in the region.”

But neither city will have a chance unless the state changes its tune.

That’s what Jim Kirkos, the longtime head of the Meadowlands Chamber who is well versed in the New Jersey-New York battle over business, said after Amazon’s decision.

“The Amazon announcement is why business leaders constantly talk about policy-makers and communities needing to have an ‘Open for Business’ posture — one that creates and leverages opportunities while still making sure community concerns are met,” he said.

“New Jersey should learn from this devastating announcement in New York.”

Biggins agreed.

Meadowlands Regional Chamber
Jim Kirkos of the Meadowlands Regional Chamber.

“It’s important that the leadership of New Jersey get behind a positive message to recruit business,” he said. “The governor has already indicated his intent to have incentives going forward as part of that strategy. But the legislative leadership and the governor will need to get together around a consensus on how robust those incentives need to be in order for New Jersey to be successful.”

And there’s no time like the present.

“It’s important that they do that timely, so that we send a signal to the market that overcomes the negativity and projects unity behind a basic principle that is that New Jersey is competitive and intends to be successful in creating and retaining jobs,” Biggins said. “And that businesses will have a conducive environment for growth.”

Murphy attempted to do just that Thursday afternoon.

“After learning of the decision to pull out of their chosen HQ2 location, I contacted Amazon and city of Newark stakeholders directly, continuing a constant dialogue that predates my time as governor,” he said in a statement.

“New Jersey is open for business, and now more than ever, Newark is the clear choice as the next presence for Amazon corporate offices. Amazon now has the opportunity to join in Newark’s story of a city on the rise.”

Newark Mayor Ras Baraka made his pitch, too.

“Given the city and state’s assets — a strong talent pipeline, a diverse tech base, unmatched infrastructure and a highly accessible location — we are well poised to accommodate Amazon, should they want to relocate New York City’s portion of HQ2, in whole or part,” he said. “Legislation regarding the tax incentives has already been passed, our real estate options are still viable and the community has been — and will continue to be — engaged.

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Newark Mayor Ras Baraka.

“Newark is becoming a national model for what equitable development should look like across the country, and we welcome the opportunity to resume conversations with Amazon and provide them an opportunity to be a part of its renaissance.”

Corporate incentives have been around for more than 100 years. But they may never have been more important than today.

Amazon, one of the most significant companies in the world, received hundreds of generous offers just for putting out a Request for Proposals. It was then forced to back out of a deal after those incentives led to a backlash of opposition from local groups.

The opposition may not have been expressing the voice of the people — some estimates said 70 percent of New Yorkers favored giving incentives to Amazon. But they certainly were talking in the loudest voice.

And you can be sure CEOs of companies across the country heard them loud and clear.

Now is the time for New Jersey to speak up.

If it doesn’t, New York’s loss may be ours, too.

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