Susan Karp, partner at Farer Fersko, spoke about the new prevailing wage law as it related to brownfield remediation as a current issue. Developers can get up to 75% of the remediation costs from the State, a program that has greatly sparked remediation. Applying prevailing wage laws, she said, jumps the labor cost of remediation by up to 25%, making remediation harder to pencil out. "It brings us to conflicting public policies," she said.
A new "Mansion Tax" puts a 1% tax on most properties over $1 million, including most commercial properties, said James Helmus, executive director of the Schonbraun McCann Group. Also, changes to the popular Urban Enterprise Zone procedure will make it harder for small businesses to utilize the zone's benefits.
Jay Biggins, executive managing director of Biggins Lacy Shapiro & Co., pointed out that New Jersey isn't competing with New York for tenants so much as the other surrounding markets. Connecticut's incentive savings, he said, makes its numbers more attractive than New Jersey, Pennsylvania or New York's outer boroughs for large tenants.
William Cariste, managing principal of Newmark Knight Frank, brought up the paradox of port development. The individual land parcels have much more lucrative uses for residential and retail development than as warehouses – such as the Jersey Gardens retail complex in Elizabeth. But New Jersey's port has comparatively less space than other American ports, and is developing new space at a slower rate as well. Furthermore, if warehouses aren't set up around the port, truck traffic will be just as bad, only they'll be driving through New Jersey rather than stopping at local warehouses.
The keynote speaker Gary Rose, chief of the New Jersey Office of Economic Growth, admitted that the government programs were not perfect. The BRRAG program, he said, requires companies to seek an out-of-state bid as part of the application process. Companies that weren't serious about moving out-of-state would go through the process, see a large dollar amount for potential savings, and come back to BRRAG wanting to be paid that large amount for staying.
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