TRENTON, N.J. (August 16, 2006) – Fall Session classes for the popular Entrepreneurial Training Institute (ETI) are scheduled to begin next month at locations throughout New Jersey. The program helps new and aspiring small-business owners learn the basics of entrepreneurship and how to prepare a detailed business plan.

Fall ETI sessions will be offered in Newark and Wayne in northern New Jersey, Jackson, North Branch and Trenton in central New Jersey, and Voorhees and Woodstown in southern New Jersey. Specialized instruction will be available in Union City for Spanish-speaking students and in North Brunswick on earned income ventures for nonprofits. All classes will be held between 6 p.m. and 9 p.m., except the North Brunswick class, which will be held from 9 a.m. to 12:30 p.m.

The innovative ETI program supports state initiatives to foster the growth of small businesses, particularly woman-owned and minority-owned enterprises. It is sponsored by the New Jersey Economic Development Authority (EDA) and the New Jersey Development Authority for Small Businesses, Minorities’ and Women’s Enterprises (NJDA).

The ETI program is offered in two segments. In ETI I, “Get Set for Entrepreneurship,” students focus on small-business feasibility, examining their business ideas, evaluating skills and risks, and identifying the resources necessary to move forward. ETI II, “Business Planning,” includes four highly structured three-hour sessions that help students develop a formal business plan with feedback and coaching.

Instruction team members for each ETI class location are primarily associated with local banks and economic development organizations so students can learn from the same financing experts who might ultimately finance their business.

Prospective students should visit www.njeda.gov on the Internet to complete the ETI Self-Assessment Tool to determine their personal and financial readiness for starting and owning their own business. This tool will benefit anyone who is considering enrollment in the ETI program or thinking about starting or improving a business operation. Students enrolled in ETI I must complete the self-assessment and bring it to the first class.

To enroll in ETI II, students with startup businesses or businesses less than 1-year-old must complete the self-assessment, ETI I and a Business Readiness Roadmap. Students who have operated a business for more than one year need only submit a completed Business Readiness Roadmap.

Once ETI II classroom sessions are completed, students submit their business plan to a panel of banking, accounting, law, marketing and economic development professionals for a thorough review. A sound business plan is necessary when students seek financing.

ETI graduates can also utilize a Business Mentoring Program, which provides free post-graduate services through four business development organizations covering the state. The program, which is funded by the EDA, provides mentors to assist graduates in overcoming the obstacles they typically face as new business owners.

Primary sponsors of the ETI Program are Bank of America, Merrill Lynch, PNC Bank and the Wachovia Foundation. The EDA provides financing and technical support to encourage business and job growth in New Jersey. The NJDA offers financing, technical assistance, training and mentoring programs to small businesses, especially woman-owned and minority-owned enterprises.

TRENTON, N.J. (August 8, 2006) – To help spur film industry activity in the Garden State, the New Jersey Economic Development Authority (EDA) Board of Directors today approved ten film production projects to benefit from over $10.2 million in tax credits. Projects are approved in cooperation with the NJ Division of Taxation, following application review by the NJ Motion Picture & Television Commission.

“Filmmakers seeking a low-cost environment to produce their projects should look to New Jersey’s array of benefits and financing options,” said Caren S. Franzini, EDA Chief Executive Officer, noting that according to the Motion Picture & Television Commission, film production work in New Jersey contributed $85.5 million to our state’s economy in 2005. “In today’s competitive climate for film production, this new 20-percent tax credit puts New Jersey at the forefront of State’s competing for film projects that stimulate direct and indirect economic benefits.”

Under a new law enacted in early 2006, film production companies can receive a 20% tax credit for production costs on their NJ Corporate Business or Gross Income Taxes. The program is capped at $10 million annually. Projects receiving tax credit benefits are first reviewed by the Motion Picture& Film Commission, followed by a review by Division of Taxation and EDA to ensure eligibility requirements are met. To be eligible, 60-percent of the total production expenses, excluding post-production, must be spent in New Jersey, and principal photography must begin within 150 days of EDA Board approval. The eligible production expenses include wages and salaries, operations, photography, editing, rental facilities and equipment, and most other production costs incurred in New Jersey.

Film production projects approved by the EDA Board for FY2006 and FY2007 tax credits include:

• 4/10 of Mile Production, to produce the movie “The Grasslands,” to receive a $200,000 benefit;
  
  
  
• Both Feet Films, LLC, to produce the film “Pinch Me,” to receive a $712,976 benefit;
  
  
  
• Casting House, LLC, to produce the film “Foreign Xchange,” to receive a $176,540 benefit;
  
  
  
• The Gracie Movie, LLC, to produce the film “Gracie,” to receive a $614,590 FY2006 benefit and a $418,874 FY2007 benefit:
  
  
  
• Junkyard Productions, LLC, to produce the film “Be Kind, to receive a $2,020,662 benefit;
  
  
  
• Mod 3 Productions, LLC, which produced the cable television show “The Archi TECHS,” to receive a $35,000 tax benefit;
  
  
  
• Modern Girl Productions, LLC, to produce the film “The Girl Next,” to receive a $120,507 tax benefit;
  
  
  
• Northern Entertainment, Inc., which produces the television show “Law & Order: Special Victims Unit (SVU),” to receive a $4,464,874 tax benefit;
  
  
  
• Perfect Christmas Productions, LLC, to produce the film “A Perfect Christmas,” to receive a $1,204,370 benefit, and
  
  
  
• Soup Kitchen Films, for the production of the film “HoagieAlley, Philly PA,” slated to receive a $242,340 tax benefit.

(Note: All approved projects are for FY2006 tax benefits unless otherwise specified)

“With outstanding locations such as our beaches, mountains, urban centers and farmlands, along with our talent pool and our transportation network, New Jersey has proven to be a popular destination for producers,” said Franzini. “With the addition of these cost-saving initatives, New Jersey is becoming even more attractive to the film community.”

EDA not only assists film production by reducing cost through tax credits, it also increases borrowing opportunity through loan guarantees and other financing initiatives. Film production companies seeking more information about how EDA can financially assist projects in New Jersey should call 609-777-4898. Those seeking additional information on filming projects in New Jersey can call the New Jersey Motion Picture and Television Commission at 973-648-6279.

The EDA is an independent, self-sustaining state financing and development agency that works to promote economic growth, job creation and the revitalization of New Jersey’s communities with financing assistance, technical support and entrepreneurial training, and real estate development activities.

TRENTON, N.J. (August 1, 2006) – Free workshops on business planning and financing designed to familiarize new and aspiring small-business owners with the popular Entrepreneurial Training Institute (ETI) curriculum and what it takes to start, grow and operate a successful company have been scheduled during the late summer and early fall at eight New Jersey locations.

By attending one of the free workshops, interested individuals can decide if the ETI program is right for them before they register and pay a nonrefundable course fee. Lender representatives will also attend each workshop to present information about their technical assistance services and resources.

The workshops have been scheduled in Jackson, Newark, North Branch, Pittsgove, Trenton, Union City (Spanish-speaking only), Voorhees and Wayne. A special workshop focusing on earned income ventures for nonprofit organizations will be offered in Jackson. Those interested in reserving a seat at one of the workshops can call the ETI program at (609) 292-9279 or visit www.njeda.gov on the Internet.

The innovative ETI program supports state initiatives to foster the growth of small businesses, particularly woman-owned and minority-owned enterprises. It is sponsored by the New Jersey Economic Development Authority (EDA) and the New Jersey Development Authority for Small Businesses, Minorities’ and Women’s Enterprises (NJDA).

The ETI program is offered in two segments. In ETI I, “Get Set for Entrepreneurship,” students focus on small-business feasibility, examining their business ideas, evaluating skills and risks, and identifying the resources necessary to move forward. ETI II, “Business Planning,” includes four highly structured three-hour sessions that help students develop a formal business plan with feedback and coaching.

Fall ETI sessions will be offered in Newark and Wayne in northern New Jersey, Jackson, North Branch and Trenton in central New Jersey, and Voorhees and Woodstown in southern New Jersey. Specialized instruction will be available in North Brunswick on earned income ventures for nonprofits and in Union City for Spanish-speaking students. All classes will be held between 6 p.m. and 9 p.m., except the North Brunswick class, which will be held from 9 a.m. to 12:30 p.m.

The workshops will provide more detail about the program and focus on how the ETI program can provide the tools for a small-business owner to succeed. They will also explore the importance of having a detailed business plan, the broad range of resources available to help a business get off the ground, and the mentoring assistance offered to ETI graduates.

Primary sponsors of the ETI Program are Bank of America, Merrill Lynch, PNC Bank and the Wachovia Foundation. The EDA provides financing and technical support to encourage business and job growth in New Jersey. The NJDA offers financing, technical assistance, training and mentoring programs to small businesses, especially woman-owned and minority-owned enterprises.

The dates, locations and times for the workshops are:

TRENTON, N.J. (July 31, 2006) – A valuable resource available through the New Jersey Economic Development Authority (EDA) to stimulate investment and economic growth in low-income areas of the state achieved a major milestone this month with the closing of financing to move forward an important downtown Trenton redevelopment project.

The EDA, through its New Jersey Community Development Entity (NJCDE), finalized a $5.3-million loan to Matrix East Front Street Urban Renewal Associates, LLC, a unit of the Matrix Development Group. The loan was part of the permanent financing obtained by Matrix to purchase and complete a 66,500-square-foot building in downtown Trenton formerly known as Liberty Commons. It was the first financing to close resulting from a $125-million allocation to the EDA under the federal New Markets Tax Credits program.

“This tax credit program generates a significant amount of capital that is being made available to businesses and community development projects in distressed areas of New Jersey,” said EDA Chief Executive Officer Caren S. Franzini. “The loans are offered at a very attractive interest rate and terms and are a great addition to the full box of financing tools offered by the EDA to reinvigorate communities and encourage new urban investments.

“In this case, an important project that had stalled was put back on track with the help of the low-interest New Markets loan, which is great news for the City of Trenton,” she said. “It resulted in a major financial institution – Wachovia Bank – moving its southern New Jersey headquarters to the state capital and helped reinforce the commitments of Governor Corzine and Mayor Palmer to revitalize New Jersey’s downtown districts.”

New Markets loans, which can range up to $10 million, must be used for fixed-asset financing such as building construction, renovations, real estate acquisitions, and equipment purchases and may also include a working capital component. Developers, businesses and nonprofit organizations may apply for the financing for commercial, industrial or mixed-use projects.

Matrix acquired the property at 32 East Front St. in October 2005 from the Economic Development Corporation for Trenton. The EDA funds were used to replace existing public funding commitments made by the EDA, the Capital City Redevelopment Corporation and the New Jersey Redevelopment Authority to the building’s original developer. The loan was made for 10 years at a fixed interest rate of 3 percent, with interest-only payments due for the first seven years.

“The EDA’s commitment to stimulate economic development in downtown Trenton, and the drive and vision of Mayor Palmer, attracted my partners and me to pursue this investment opportunity,” said Matrix Development Group Executive Vice President and Chief Financial Officer Donald M. Epstein. “The use of the New Markets Tax Credits program gave us the ability to move quickly and consolidate various outstanding existing public funding obligations to the project into one comprehensive financing package that allowed us to meet Wachovia’s very tight occupancy needs.”

Wachovia has leased 43,500 square feet of office space on the top three floors of the five-story structure. In addition to the office space on the upper floors, the first floor offers up to 10,000 square feet of prime retail space with access from the street and within the building. It also features an adjacent parking garage. When fully leased, the building is expected to provide work space for 300 full-time jobs.

The New Markets Tax Credits program was enacted in December 2002 as part of the Community Renewal Tax Relief Act and is administered by the U.S. Department of Treasury through the Community Development Financial Institutions Fund. It offers a seven-year, 39-percent federal tax credit for investments made through community development entities, which use the capital derived from the tax credits to make loans to or investments in businesses and projects in low-income communities. There are eligible areas in more than 175 New Jersey municipalities located throughout the state’s 21 counties.

The EDA prepared its tax credit program application in partnership with the New Jersey Housing and Mortgage Finance Agency and the Casino Reinvestment Development Authority. NJCDE investors U.S. Bancorp Community Development Corporation and iCapital Finance, Inc. committed the investment capital that helped the NJCDE create its loan program.

Those interested in applying for funds should call (609) 777-4898. Applications are also available online at www.njeda.gov.

The EDA is an independent, self-sustaining state financing and development agency that works to promote economic growth, job creation and the revitalization of New Jersey’s communities with financing assistance, technical support and entrepreneurial training, and real estate development activities.

TRENTON, N.J. (July 25, 2006) – The first angel investment guarantees under the New Jersey Economic Development Authority’s (EDA’s) Techniuum Initiative have been finalized for investors in Knowtions, Inc., a workforce productivity software provider based in Paramus.

Guarantees totaling $69,300 have been provided to a group of four angels who are investing $210,000 in the emerging technology business, which was founded in 2005. The EDA is providing the guarantees to encourage the investment of pre-venture capital in young technology businesses.

“The angel guarantee is one of several resources the EDA offers under Techniuum to encourage the location and growth of technology and life sciences companies and related jobs in New Jersey and we worked closely with the Jumpstart New Jersey Angel Investor Network and the New Jersey Technology Council (NJTC) to develop and implement it,” said EDA Chief Executive Officer Caren S. Franzini. “Our guarantee will cover up to one-third of the investment that angel investors make in a qualified early-stage business.”

The angel guarantee is currently available as a pilot program to members of Jumpstart, a private, member-led group that invests in early-stage technology companies in the Mid-Atlantic region. The EDA and the NJTC are founding members of Jumpstart. Jumpstart angels are accredited investors who, as a group, invest between $200,000 and $1 million in emerging technology companies and have already invested a total of $4.6 million in nine New Jersey businesses.

“The EDA’s guarantee is a great tool to encourage more qualified investors to actively invest in new technology,” said Katherine O’Neill, Jumpstart’s executive director. “Knowtions is the first of several New Jersey companies that Jumpstart members will invest in that are backed by the EDA angel guarantee.”

Karl Rauch, chief executive officer of Knowtions, said the company will utilize its new capital to fund the continued development of its Coachware® product and build a leadership position in the corporate and government learning market. The innovative software is designed to help organizations operate more efficiently by increasing workforce productivity and accelerating user adoption of new business processes and technologies.

“Knowtions is pleased to have our Jumpstart angel investors participate in the EDA’s angel guarantee program,” Rauch said. “Angel investors are an increasingly important source of capital for early-stage technology companies and the EDA’s angel guarantee encourages a higher level of investment in companies like Knowtions. It also demonstrates New Jersey’s commitment to supporting the development of innovative technologies and growing employment opportunities within the state.”

Techniuum provides a continuum of customized, streamlined, long-term support to technology and life sciences companies as they advance through their life cycle of growth and expand their products and services. Through this innovative initiative, the EDA also can assist with financing, lease guarantees, access to venture capital and incentive tools as well as affordable office, laboratory and production facilities. For information and applications, visit or www.jumpstartnj.com or www.njedatechniuum.com.

The EDA is an independent, self-sustaining state financing and development agency that works to promote economic growth, job creation and the revitalization of New Jersey’s communities with financing assistance, technical support and entrepreneurial training, and real estate development activities.

North Brunswick, N.J. (November 2, 2005) – Advaxis, Inc., a tenant at the New Jersey Economic Development Authority’s (EDA’s) Commercialization Center for Innovative Technologies here that is utilizing genetically engineered bacteria to create vaccines for cancer and other diseases, has been awarded a New Jersey Technology Fellowship by the New Jersey Commission on Science and Technology.

The fellowship is designed to help move cutting-edge research from the laboratory to the marketplace by providing technology-based businesses in New Jersey with up to $55,000 to hire post-doctoral graduates from the state’s research universities. Advaxis was one of six companies selected for the second round of fellowships and is one of 14 firms chosen for the program overall since it was established earlier this year.

Advaxis has used the fellowship to employ Mariela Reyes-Reyes, who received her Ph.D. in biochemistry and molecular biology from the University of Medicine and Dentistry of New Jersey. Formed in 2002, Advaxis is poised to conduct clinical trials of a vaccine for late-stage cervical cancer patients and is pursuing toxicology studies for a breast cancer vaccine that may have applications for melanoma and pancreatic cancers. Other therapeutic vaccines are in the pipeline aimed at prostate, colon and brain cancers.

“We’re pleased that Advaxis has been selected to take part in this valuable program,” said EDA Chief Executive Officer Caren S. Franzini. “It’s another example of our state’s commitment to supporting both scientific discovery and the growth of emerging technology and biotechnology businesses.”

The New Jersey Technology Fellowship program fulfills several of the Commission’s goals: said Donald Drakeman, Commission chairman. “These fellowships will encourage collaborations between our research universities and our business community, provide needed talent to New Jersey’s entrepreneurial companies and help convert innovation into commercial products.”

The EDA’s Commercialization Center is located at the Technology Centre of New Jersey, which is now home to 20 growing early-stage and established businesses that occupy about 400,000 square feet of top-quality, customized, competitively priced laboratory, production and office space. More than $100 million has been invested in facilities and improvements at the 50-acre former Johnson & Johnson site located within the Greater New Brunswick Innovation Zone and along the Route 1 research and development corridor between Rutgers and Princeton universities.

The EDA is a self-supporting, independent state agency that works to stimulate business development, job creation and community revitalization throughout the state with financial assistance, technical assistance and real estate development programs.

For more information about the EDA’s Technology Centre of New Jersey, visit www.njtechcentre.com. To learn more about the Commission’s Technology Fellowship program, visit www.state.nj.us/scitech/postdoc.html.

North Branch , N.J. (October 24, 2005) – A free information workshop on business planning and financing designed to familiarize new and aspiring small-business owners with the training, counseling, funding and technical assistance resources available to them will be held on Wednesday, Nov. 2, between 6 p.m. and 8 p.m. at Raritan Valley Community College (RVCC), Grand Conference Room A, Route 28 and Lamington Road.

Attendees will learn about what it takes to start, grow and operate a successful company, the importance of having a detailed business plan, and the various tools that are available to help a young business succeed. They will also hear about the new and improved Entrepreneurial Training Institute (ETI) curriculum, which is offered at various locations around the state, including RVCC.

The innovative ETI program supports state initiatives to foster the growth of small businesses, particularly woman-owned and minority-owned enterprises. It is sponsored by the New Jersey Economic Development Authority (EDA) and the New Jersey Development Authority for Small Businesses, Minorities’ and Women’s Enterprises (NJDA).

Those interested in reserving a seat at one of the workshops can call the ETI program at (609) 292-9279 or visit www.njeda.gov/eti on the Internet.

Primary sponsors of the ETI program are Bank of America, Merrill Lynch, PNC Bank and the Wachovia Foundation. The EDA provides financing and technical support to encourage business and job growth in New Jersey. The NJDA offers financing, technical assistance, training and mentoring programs to small businesses, especially woman-owned and minority-owned enterprises.

Trenton, N.J. (October 21, 2005) – Investments made by the New Jersey Economic Development Authority (EDA) in the Garden State Life Sciences Venture Fund (“Venture Fund”) have leveraged nearly $91 million in co-investments in New Jersey companies to date, according to fund manager Quaker BioVentures.

“New Jersey’s strategic investments in economic growth initiatives like the Garden State Life Sciences Venture Fund are having a positive, dramatic impact on the economy by leveraging private resources,” said Acting Governor Richard J. Codey. “These figures demonstrate that our state’s ongoing commitment to supporting the life sciences has attracted significant interest and funding from the venture community in order to grow jobs and support innovation in New Jersey. “Combined with our pioneering efforts on stem cell research, our seed capital investments offer real promise for the development of medical breakthroughs right here in New Jersey.”

Caren Franzini, EDA Chief Executive Officer, said “Under the investment strategies of Quaker BioVentures, the Garden State Life Sciences Venture Fund is truly serving as a catalyst to spur other investors to support worthwhile New Jersey companies. Every dollar invested to date from the Venture Fund has attracted $22 in co-investment.”

To date, two companies- Amicus Therapeutics and Celator Pharmaceuticals – have benefited from the Venture Fund and its co-investments. Specifically, $4.1 million has been invested from EDA’s initial commitment of $10 million to the Venture Fund and $91 million has been invested from Quaker BioVentures’ main fund and other top venture capital firms, for a total of $95.1 million. The investments have also helped to create or maintain 50 jobs.

In 2004, the EDA entered into a 10-year limited partnership agreement with Quaker BioVentures to create and manage the Venture Fund to make investments in emerging life sciences companies in New Jersey. EDA’s $10 million commitment was capitalized through residual monies generated through the Business Employment Incentive Program (BEIP). The EDA is authorized to use residual monies from the program for investments in economic growth initiatives.

Treasurer John E. McCormac, who worked closely with the life sciences business community to establish the Venture Fund, said, “The Garden State Life Sciences Venture Fund ‘s leveraging success is yet another example of how New Jersey’s investments are growing our businesses and strengthening our economy. Earlier this week, an independent study on BEIP found that every State dollar invested in job creation generates about $4 in additional tax revenue annually to the State. The investment returns announced today were made possible by the enhancements we built into the BEIP program two years ago, and the dividends already exceed our expectations.”

Sherrill Neff of Quaker BioVentures notes that “behind our lead or co-lead investment, we have attracted many of the nation’s top tier life sciences venture funds as co-investors, which validates our central thesis that New Jersey and its surrounding region represents an extraordinary investment opportunity in life sciences. Focused venture capital leadership can and will catalyze a robust flow of capital into the region.”

In September 2005, Amicus Therapeutics, a biopharmaceutical company developing small-molecule, orally-active pharmacological chaperones for the treatment of human genetic diseases, closed a $55 million Series C financing, lead by Quaker BioVentures. Amicus intends to use the proceeds to advance its drug pipeline based on the company’s unique technology that has the potential to transform the treatment of human genetic diseases. Quaker BioVentures was joined by existing investors Canaan Partners, CHL Medical Partners, Frazier Healthcare Ventures, New Enterprise Associates, Prospect Venture Partners and Radius Ventures. Palo Alto Investors also joined the Garden State Life Sciences Venture Fund as a new investor.

In May 2005, Celator Pharmaceuticals, Inc., a privately held North American biopharmaceutical company, closed a $40 million (U.S.) round of private equity financing with participation from the Garden State Life Sciences Venture Fund. The financing will support Celator’s expanding research and product development efforts targeting new combination chemotherapies to treat different forms of cancer. The financing includes first-time investments from Quaker BioVentures main fund, Domain Associates and TL Ventures, as well as continuing support from previous investors Ventures West, Growthworks Capital, and the Business Development Bank of Canada.

Investment in venture funds is but one way the EDA supports the technology and life sciences industry. Through its newly-launched Techniuum initiative, the EDA encourages the location and growth of technology and life sciences companies and jobs in New Jersey by providing a continuum of customized, streamlined, long-term support as businesses advance through their life cycle of growth.

In addition to providing access to venture funding, Techniuum encompasses a variety of financing options, including angel guarantees, low-interest loans, tax incentives and grants for job creation. The initiative also includes technical assistance and mentoring services, as well as real estate opportunities throughout New Jersey that serve the needs of start-ups, emerging and established companies.

The EDA was established in 1974 to promote economic growth and create jobs. It has arranged more than $16 billion in financing since its inception. More information about all of EDA’s initiatives, including Techniuum, can be accessed at www.njeda.gov.

Trenton, N.J. (October 17, 2005) – Nearly $350 million in additional state tax revenue is generated each year and $8.4 billion is brought to New Jersey’s gross state product as a result of the Business Employment Incentive Program (BEIP), according to a study released today by the New Jersey Economic Development Authority (EDA). Conducted by the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, the study was commissioned by the EDA to estimate the impact of BEIP on New Jersey’s economy.

“We knew the program had been effective in directly supporting job creation, and now we have comprehensive data that reflects how immense an impact the program has on state tax revenue, and job creation,” said Caren S. Franzini, Chief Executive Officer of the EDA, the state agency that administers BEIP. “This report further supports the effectiveness of BEIP as a tool to attract businesses to New Jersey, encourage business expansion, and grow our economy.”

The study, presented by Rutgers researchers Dr. Joseph J. Seneca, Dr. James W. Hughes, and Will Irving, concludes that:

• Businesses assisted by BEIP generate nearly $350 million in additional state tax revenue annually, representing over a 3.7 to 1 return on investment
  
• To date, the 183 businesses that have received BEIP assistance have created nearly 52,000 new, permanent jobs. Economic activity generated by BEIP businesses also has led indirectly to the creation of another 58,000 jobs.
  
• Operations of the BEIP assisted businesses add approximately $8.4 billion to New Jersey’s gross state product. For every dollar spent on BEIP, New Jersey’s gross state product increases by $88.

State Treasurer John E. McCormac noted that the study further documents how the BEIP program strengthens the New Jersey economy and the State budget.

“The BEIP program is clearly keeping New Jersey’s economy on track and fueling a tax revenue base that sustains the State’s finances. With tools like BEIP, we are creating jobs, bolstering our tax base and making it possible to fund vital programs in our State budget,” he said. McCormac noted that while New Jersey returns a portion of tax revenue from newly created jobs back to businesses in the form of BEIP grants, those revenues are kept in their entirety and become permanent after the end of the BEIP 10-year contract period.

“Despite contentions to the contrary, BEIP works. There are literally thousands of New Jerseyans holding jobs today that otherwise would have migrated to other states and countries and we are proud to have been able to make that happen,” McCormac said.

Under the BEIP program, businesses that execute agreements with EDA and create jobs receive annual cash grants based on the number of new jobs they have created in the State. BEIP grants may be offered for up to 10 years and can equal 10% to 80% of the total amount of state income taxes generated by the grantees’ newly created jobs during the calendar year. To qualify, a business must demonstrate that the BEIP grant is a “material” factor for expanding or relocating jobs in New Jersey, that it is financially viable, and that it will create a minimum number of 25 new jobs, or 10 new jobs if the business is within the high tech or biotechnology industries.

“The BEIP grants are supporting exactly the high-paying, high productivity industries New Jersey needs to attract and retain in order to keep its economy growing in an ever more competitive global environment. Moreover, the BEIP awards, paid only when jobs are created, ensure that the use of state resources is both prudent and beneficial,” said Joseph J. Seneca and James W. Hughes.

“The report indicates what we’ve known for some time — that the BEIP program is a highly successful tool in terms of jobs creation and capital investment,” said Commerce Secretary Virginia Bauer. “The fact that BEIP generates a 3.7 to 1 return on investment demonstrates the effectiveness of the program.”

In addition to long-term economic benefits of the program generated by ongoing operation of the assisted business, BEIP also results in a number of one-time impacts generated by capital expenditures on construction, equipment and other items that accrue over the duration of the project, according to the study. One-time impacts include an additional 111,041 “job-years” (or one job lasting for one year); $6.6 billion in gross state product, and $233 million in state tax revenue.

Attached is a summary of the study’s findings. For a complete copy of the study, click here, or visit www.policy.rutgers.edu/beipbenefits.pdf

The Characteristics and Economic Benefits of the Business Employment Incentive Program
October 2005

Summary

This report is intended to serve as a comprehensive source of information about the awards that have been made since the inception of the Business Employment Incentive Program (BEIP) and to estimate the impact of the BEIP awards on New Jersey’s economy. The report finds that the BEIP program is of significant benefit to the state in terms of employment, economic activity (gross state product) and fiscal flows (state tax revenues).

The report focuses primarily on 183 BEIP awards made between June 1997 and February 2005, which created 51,665 jobs. It also examines potential impacts of the 88 BEIP awards approved in fiscal year 2005, and the effects of the inclusion of smart growth criteria in the BEIP award formula. The BEIP award characteristics and economic impacts addressed by the report include:

• Annual Economic Impact. Each year, the operations of the BEIP projects add approximately $8.4 billion to New Jersey’s gross state product. This equates to an annual increase of approximately $88 for each tax dollar spent to fund the program.
  
  
  
• Annual Fiscal Impact. The 183 BEIP projects generate approximately $349 million in additional state tax revenue each year. In other words, for each tax dollar spent on the BEIP program, the state receives approximately $3.70 in revenues.
  
  
  
• Annual Employment Impact. The 183 BEIP projects have created approximately 51,665 permanent jobs. In addition, the economic activity generated by the BEIP projects leads indirectly to the creation of another 58,089 jobs, for a total of 109,754 jobs.
  
  
  
• Tax Expenditures. The annual tax expenditures made on the BEIP program are approximately $95.1 million, or about $1,841 per job created by the BEIP projects. The financial activities sector had the highest tax expenditure per job created ($3,119), followed by the professional and business services sector ($1,661) and the manufacturing sector ($1,422).
  
  
  
• One-Time Impacts. In addition to the annual impacts generated by the ongoing operations of the BEIP projects, each project’s capital expenditures on construction, equipment and other items leads to significant one-time impacts that accrue over the duration of the project. The total capital investment leads to the creation of an additional 111,041 job-years (one job lasting for one year), $6.6 billion in gross state product, and $233 million in state tax revenue. If these latter two figures are annualized and added to the annual impacts noted above, the annual ratio of gross state product to tax expenditures rises from 88-to-1 to almost 95-to-1, and the ratio of state tax revenues to tax expenditures rises from 3.7-to-1 to 3.9-to-1.
  
  
  
• Characteristics of Fiscal Year 2005 Awards. The 88 BEIP projects approved in fiscal year 2005 are estimated to create approximately 12,318 jobs. Like the 183 approved and executed projects, the majority of the 88 projects are in the manufacturing (40.9%), professional and business services (20.5%), and financial activities (15.9%) sectors. The approved FY 2005 awards have gone primarily to projects creating fewer than 200 jobs (84%), while a large share of the estimated jobs to be created (42.7%) are expected to come from projects creating 500 jobs or more. Forty-eight of the FY 2005 projects are expansions and 40 are relocations, with both types estimated to create about the same number of jobs. The annual tax expenditures for the FY 2005 projects are estimated at $18 million, or $1,461 per job.
  
  
  
• Annual Impacts of Fiscal Year 2005 Awards. The BEIP projects approved in fiscal 2005 are estimated to generate an increase of $1.7 billion in gross state product on an annual basis, or approximately $96.80 for each tax dollar spent on the awards. They are also expected to generate state tax revenues of $84 million, or $4.70 for each dollar in tax expenditures. In addition to the 12,318 estimated jobs to be created by the projects, the economic activity they generate is estimated to result in the creation of an additional 10,391 jobs, for a total of 22,709 jobs.
  
  
  
• One-Time Impacts of Fiscal Year 2005 Awards. Over the period of the awards, the capital investments of the projects approved in fiscal year 2005 are estimated to result in the creation of an additional 13,008 job-years, and add $781.5 million in gross state product and $27.1 million in state tax revenues. If these figures are annualized and added to the projects’ estimated annual impacts, the ratio of gross state product to tax expenditures rises to 101.2 and the ratio of state tax revenue to tax expenditures rises to 4.8.
  
  
  
• Distribution by Business Sector. The BEIP awards and the jobs created by the 183 BEIP projects studied are distributed across a broad range of business sectors, but are most highly concentrated in the key manufacturing, financial activities, and professional and business services sectors.
  
  
  
• Distribution by Employment Size. The majority of BEIP awards examined (55.7%) have been extended to small to mid-sized projects creating fewer than 200 jobs each, while 49.3% of the jobs directly generated by the BEIP projects have come from those that created 500 jobs or more.
  
  
  
• Distribution by Project Type. Over 50% of the BEIP awards analyzed (100 out of 183) have been made to companies relocating their facilities from other states, with 42% (77 awards) going to companies expanding their existing operations in New Jersey and very few (6 awards) going to new businesses. The majority of the relocations (69%) have come from New York.
  
  
  
• Distribution by County. BEIP grants have been made to companies in almost every county in the state. The largest shares of the awards have gone to companies in Hudson (25.1%), Middlesex (12%) and Morris (9.8%) counties. The largest percentages of the total jobs created by BEIP projects have been in Hudson (34.7%), Somerset (11.6%) and Middlesex (7.6%) counties.
  
  
  
• Smart Growth Protocols. Analysis of the characteristics of BEIP awards before and after institution of the smart growth protocols demonstrates that the inclusion of these factors in the BEIP award formula has not influenced the spatial distribution of the awards or increased the average award level, but that it has had the effect of shifting the relative importance away from the economic development factors in determining the award level. Several recommendations are made to link the economic development criteria of the BEIP awards more directly with the smart growth function.