Panasonic’s move to Newark would be zero sum game

New Jersey Newsroom
By Naomi Bressler

Newark 1, Secaucus 0. That’s the score card for people keeping track of the battle for Panasonic’s 800 jobs. If Panasonic decides to stay in New Jersey, a decision the company has said it still has not made, the company’s employees will find themselves commuting to Newark, not Secaucus, by 2013. The $102.4 million subsidy the New Jersey Economic Development Authority agreed to give Panasonic if it decides to make that move, is certainly a win for Newark and SJP Properties and Matrix Development Group, the developers of the yet-to-be-built Newark building. The Urban Transit Hub Tax Credit also leaves losers, namely Secaucus and the company’s current landlord, Hartz Mountain Industries.

Urban Transit Hub Tax Credits are offered to companies that move within half a mile of one of the state’s nine urban transit centers, which includes Newark but not Secaucus. The purpose of these grants is to bring new jobs to the state and locate them in transit-friendly areas. This morning, in justifying its decision to reward Panasonic for a 10-mile move, the EDA’s CEO said the current jobs were “at risk.” The company has threatened to move to either New York or one of three states where it already has facilities.

The problem here is that by moving 800 jobs and creating the demand for new office space in Newark, the EDA is taking 800 jobs from Secaucus and leaving vacant office space there. As a senior vice president for Hartz wrote in his memo to the EDA, “intra-state transfers of business facilities, from one New Jersey municipality to another, without the creation of new full-time positions is a zero sum game.” This is especially true when the facilities are as close to one another as Secaucus and Newark are. In this game, Newark, SJP Properties and Matrix Development Group win and Secaucus and Hartz Mountain lose. Yet perhaps the biggest losers are New Jersey taxpayers, who will subsidize Panasonic’s 10-mile move to the tune of $102 million.

This financial choice is bad but isn’t EDA’s only poor decision.

The process is also in question. This morning was the second time EDA has voted on this issue. It agreed to this second vote only after Hartz executives questioned whether the public was properly notified of its Jan. 11th meeting. But even on its second try, the EDA did not get it right.

Its decision was made after a 30-minute closed-door executive session. Without discussing the substance of the case other than to acknowledge Hartz’s written comments and comments about the amount of thought that went into the decision, board members voted. Public comment was accepted only after the vote, prompting Hartz’s representative to call any comments he would make “meaningless.” The company has also objected to what it says is the EDA’s failure to reply meaningfully to a formal request it made for information on how it made its earlier decision.

Using taxpayers’ money for an arms race between states for jobs is bad enough. But pitting one municipality against another, moving players without a net gain and failing to play fairly amounts to a foul.