New Jersey officials have approved a tax credit of nearly $ 10 million to encourage Party City Holdings Inc. to lease more than 200,000 square feet of office space in Woodcliff Lake.
Members of the Board of Directors of the Economic Development Authority approved a proposed tax credit of $ 1.43 million per year over seven years, for a total of $ 9.99 million, at their monthly board meeting on Wednesday, according to recorded meeting minutes.
The incentive is the first of its kind awarded under the EDA Emerging Program, which is described by the agency as “a a vital economic development tool that will bring successful businesses to New Jersey, inspire them to create jobs for New Jersey residents and promote broader economic opportunities. “
State officials hope to get Party City to consolidate its existing offices in Rockaway, New Jersey and Elmsford, New York, and move operations to a new headquarters at 100 Tice Blvd. at Woodcliff Lake under a full 16 year building lease. The company plans to lease the entire 208,911 square foot space, which previously housed Eisai Inc. Pharmaceuticals, state officials said. The space, officials said, could be renovated to showcase products and accommodate suppliers and customers. The building will have a workspace that can accommodate around 800 employees, they said.
“The applicant’s objective for this real estate consolidation is to have a single head office which would allow the company to develop in a single establishment, to create synergy, to increase collaboration and to improve the cohesion of team among its employees, ”CEO Tim Sullivan said in a project note. to EDA members.
The project is not yet complete, as Party City is also considering an alternative site in White Plains, New York, as Brian Sabina, director of economic growth, noted at this week’s board meeting. . The competing incentive offer through New York State’s Excelsior tax credit program is $ 15.7 million over 10 years. Unlike the Emerge program, the New York State program does not charge a fee.
“It’s clearly a competitive situation,” Sabina said on Wednesday.
The public can only associate Party City with Halloween costumes, or assume after a wave of store closures that it is no longer a major player, but the company remains the largest party supplies retailer in the United States. United, Canada and Mexico, with approximately 825 companies. US owned and franchised stores only. Party City founder Steve Mandell started the business in 1986 in East Hanover.
If the company ultimately chooses to return to its Garden State roots and move to Woodcliff Lake, it would retain 338 full-time non-commercial jobs at risk of leaving the state and create 357 new full-time jobs in New Jersey, a declared Business. On Wednesday, development officer Ivan Mendez.
“These are well-paying corporate positions with a median salary well above the current Bergen County median salary,” Mendez added.
Following board approval on Wednesday, Party City has 12 months to submit a progress report indicating that the company has submitted site plan approval and three years to complete the project. Party City was previously approved for a Business Employment Incentive Program grant in 2004, however, this award was later withdrawn in 2008 due to non-responsiveness. Still, officials hope things will be different with Project Emerge.
The Emerge program was created under the New Jersey Economic Recovery Act of 2020 and offers tax credits per job in “priority sectors” of the state for up to seven years, provided the proposals meet criteria. predetermined upon request and during a commitment period. that’s 1.5 times the length of the award, according to the NJDA website.
A stipulation of the program is that the projects must have a positive net economic benefit to the state equivalent to 400% of the amount of the tax credit. In the case of Party City, the EDA calculates that the present value of the net profit to the state is approximately $ 35.7 million, or 481% of the reward. In other words, for every dollar of tax incentives, the state recovers $ 4.81, EDA officials determined.
“If Party City were to pick us, it would be a home run for our residents,” said Woodcliff Lake Mayor Carlos Rendo.
If the company goes ahead with a site in Woodcliff Lake, its expected eligible capital investment is $ 32.3 million, including owner and tenant improvements, design and construction. , furniture, fixtures and equipment.
“Everything is positive. We are delighted that this has been approved by the New Jersey Department of Economic Development, ”said Rendo.
Rendo said he had not been given a specific timeline for when Party City would make their decision, but he is “confident” that Woodcliff Lake “offers the best opportunity”.
Party City did not respond to a request for comment.
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Jackie Roman can be reached at [email protected].