This past Friday, the Economic Development Authority voted to approve two incentive packages for financial service firms that exceed $300m in total.
JP Morgan will receive a Grow NJ award of $224 million that will have a new benefit of $1.1 billion to the state over the next 20 years. This project includes the retention of 2,612 employees and the creation of 1,000 new jobs in Jersey City. According to the press release, they will invest $76 million and the quote from their Chief Operating Officer, Matt Zarnes, mentions the purchase of their Newport Operations Center.
When I spoke to someone at JP Morgan a few years ago, he mentioned to me that they were likely to shrink their footprint in New Jersey based on the high cost of labor. Absent this award, not only were the new jobs likely to go to Delaware or Ohio, the existing jobs were at risk as well.
Separately, RBC received $78 million for the creation of 900 new jobs also in Jersey City. They have a lease out, but not signed, at the Goldman Sachs building at 30 Hudson Street. The main competition for these jobs was Minnesota.
With the high cost of labor (and living) in New Jersey, firms will continue to look to lower cost regions for back office operations. However, under the leadership of Governor Christie, it is clear that New Jersey is open for business. With rising rents in Manhattan, we can anticipate additional firms to look at the Hudson Waterfront and Newark as lower cost alternatives to take advantage of the talented labor pool in our region.
While others may disagree, I believe that the state stepping up to keep these jobs and bridge the gap is a huge win for our local economy.