NEWARK-After a review of challenges brought by downtown Newark landlords and citizen taxpayer groups, the state Economic Development Authority has shaved $40 million from a $250.8 million tax credit promised to Prudential Financial if it builds a new tower bringing 400 more jobs to Newark.
However, EDA chief Caren Franzini made it plain the adjustment had little to do with the landlords’ contention that EDA computations of the project’s public costs askew, describing EDA’s number-crunching as “very conservative.”
At a Friday meeting of the EDA, Franzini told board members that updated federal data used to calculate the project’s economic impact accounted for most of the difference. Also, the executive review did find that tax revenue expected from the building's construction had ben overestimated, and so the tax-credit award was cut by $1.5 million for that reason.
The $210.8 million credit over ten years is still the largest in the history of the urban-hub tax credit program, established in 2008. Prudential plans a 650,000-square-foot building that would house more than 2,000 workers who will move from the Gateway Center, Prudential’s home base for several decades. The company’s lease at Gateway expires in 2014.
Under the terms of the tax credit award, Prudential would have to up its employment rolls by 400 by 2016, or forfeit part of the credit.
A group of three landlords from The Gateway had filed a formal protest of the credit award with the EDA last month. It also has a legal appeal pending before a state appellate court. Attorneys for the landlords have argued that Newark’s real estate office market would be devastated over a long period if the nearly one million square feet now occupied by Prudential at Gateway is suddenly thrown on the market.
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