Due to the proposed facility’s close proximity to New Jersey Transit, PATH and Amtrak, as well as a “net positive benefit” of the project to the city, according to the EDA application, members of the state’s EDA voted to approve Panasonic’s Urban Transit Hub Tax Credit program application in February. The EDA required the company to provide at least 250 employees in order to receive the full tax credit amount toward the new construction.

In calculating the net positive benefit to the state, the EDA considers a number of items, according to the Certification of EDA SVP of finance and development Timothy J. Lizura In Support of the Motion For an Accelerated Appeal. The EDA calculates the direct benefit of the construction project, including sales tax on purchases for the project and wage taxes for the workers on the project, according to the certification. The EDA also considers “spin-off” benefits, such as the tax revenues that surrounding local businesses generate as a result of the project.

Once construction is completed, the EDA estimates the corporate and business taxes that the ongoing business will pay, as well as an estimate of the wage taxes of employees at the site, according to the certification. It then calculates sales tax that the operation of the business will generate, and other taxes, such as local property taxes, that the entity will pay. If the total benefit exceeds the tax credit by at least 10%, the EDA considers the business will yield a positive benefit, according to the certification.

By the fourth-quarter of 2012, Panasonic aims to relocate approximately 800 full-time employees from its existing location in Secaucus to the project site, EDA documents show. In the application, the CEO of Panasonic certified that the lease in Secaucus expires in March 2013, and the company has the capacity to accommodate its Secaucus operations at other sites outside New Jersey, and that these jobs are “at risk” of leaving the state.

Currently, the EDA staff is involved in discussions with three companies that are considering applying for a hub tax credit to move facilities within New Jersey, according to the certification. The document shows that one company presently has 1,400 employees, all of whom could choose to relocate to other states. While the EDA provided the project application to GlobeSt.com, they declined to comment about the relocation and lease deal.

Hartz Mountain Industries Inc. currently manages Panasonic’s current one-million-square foot location in Secaucus. A spokesperson for Hartz says they have filed an appeal.

“It is $102 million to move five miles,” Hartz’s senior VP of land use and development Allen Magrini tells GlobeSt.com. “If you are coming into New Jersey from New York, the net is 100% positive,” Magrini says, describing that businesses looking to move short distances within the state--like Panasonic--is a “wash” financially. “You have to subtract all the people in Secaucus and all the taxes Secaucus collects, as well as the multiplier effects on local businesses. In order to avoid that, the EDA created this new ‘at risk’ category.”

In response to the lease deal, Newark Mayor Cory Booker commends “city and state” for interlocal and business collaboration on the project, while in a separate statement, Brooklyn Borough President Marty Markowitz expresses disappointment. “When the Nets move from Newark to Barclays Center in 2012, it's going to be a heck of a commute for those Panasonic employees,” Markowitz quips.

The estimated cost to develop the entire site is approximately $190 million, according to the EDA application. A spokesperson for Panasonic did not return a phone call to GlobeSt.com in time for deadline.