Despite a stagnant unemployment rate and poor national rankings, New Jersey businesses saw a second year of improved sales, profits, spending, and employment in 2011, moving the state one more step away from its recession low recorded in 2009, according to a New Jersey Business and Industry Association 2012 Business Outlook Survey. The state unemployment rate remained high in November at 9.1 percent, according to the Department of Labor. The Hudson County rate was 9.9 percent, while the national rate fell to 8.6 percent.
Still, Hudson County managed to attract major retail chains like Walmart (Bayonne) and Office Depot (Hoboken).
The county saw discussion over several big business stories and controversies this year.
For one, several of the county’s six hospitals were recently sold or will be sold to for-profit companies who may be able to run them more efficiently, but might not be in-network with most insurance carriers and may drop certain services needed by the community.
Also in the county, several businesses changed locations with the help of a controversial tax credit meant to keep them in New Jersey. However, the credit only applies to businesses moving to certain urban areas, which means that other local towns lose out.
1. Companies move, get controversial tax credits
Companies such as Goya Foods, Panasonic, and Pearson Education have benefited from the state’s Urban Transit Hub Tax Credit program, which was signed into law under former Gov. Jon Corzine’s administration in 2008 as a way to spur private capital investment, revitalize urban centers, and increase transit ridership.
Jersey City, Hoboken, and Newark, which have major transit stations, are among the nine cities classified as urban transit hubs, while Secaucus is not. This factor resulted in loss of business to the town. Developers hoping to receive the tax credit must invest at least $50 million in a business facility located within one-half mile of a major transit station and employ at least 250 individuals full-time in one of the designated urban hubs. Thus, the Panasonic company, which announced that it might leave the state, instead received $102.4 million to relocate from Secaucus to Newark and will move 806 jobs there. Secaucus officials were unhappy, saying the credit appeared to lure the company out of town.
In addition, this past year, Goya received $81.9 million from the state and additional tax incentives from Jersey City to move more than 350 jobs from Secaucus and Bethpage, N.Y. The Jersey City location is less than a mile from Secaucus. However, Goya will maintain a manufacturing facility in Secaucus.
Pearson Education received $82 million to move 700 jobs from the Bergen County suburb of Upper Saddle River to Hoboken in 2014.
2. Hospitals sold to for-profit companies
In less than two years, Hudson County residents have witnessed the sale of two local hospitals, Meadowlands Hospital Medical Center in Secaucus and Hoboken University Medical Center, to for-profit companies. Bayonne Medical Center was sold three years ago, and the owners of Christ Hospital in Jersey City are hoping to sell it to California-based Prime Healthcare Services. That would leave only Palisades Medical Center in North Bergen and Jersey City Medical Center as the county’s only not-for-profit hospitals.
These sales come just a few years after the closures of Greenville Hospital and St. Francis Hospital in Jersey City.
Hospitals face difficulties staying afloat when they are compelled to treat uninsured patients and compete with private facilities that perform MRIs and other specialized procedures. Private owners who have taken over non-profits have turned a profit by canceling contracts with insurance companies and renegotiating rates for various services. But that has sometimes put consumers in a difficult position. Bayonne and Hoboken’s hospitals, which have common ownership, are no longer in-network with many insurance plans, meaning patients don’t get the negotiated rates. The hospitals say they are negotiating to become in-network with more providers. All hospitals are required by state law to treat patients who come into the emergency room.
3. Big business districts see ups and downs
Bayonne welcomed the arrival of 300 new jobs with the opening of the massive retail chain Walmart in October. Hoboken saw a portion of the former Barnes and Noble retail space, which had been vacant since January 2010, leased by Office Depot.
Other businesses closed or are seeking new tenants, including the former Blockbuster Video store on Hoboken’s Washington Street, which is still vacant.
Many towns sought to improve their business district, particularly Secaucus, which isn’t known for having a main drag like Hoboken’s Washington Street. But the mayor and Town Council would like to change that by making the Plaza area a town center. They have added a new town clock and gazebo and hosted many events in the area this past year.
Other business developments
• Foodtown backed out of their commitment to open a supermarket at the Xchange development in Secaucus because they didn’t think they could generate enough sales. The town has been trying to draw a major supermarket for years, since the Acme closed in the center of town. The closest thing that residents have is the food section of the local Walmart.
• After a controversy between residents and business owners, Son Cubano restaurant in West New York near the waterfront will no longer stay open until 2 a.m. on Fridays and Saturdays. In response to complaints from resident of a nearby luxury development, the mayor and town commissioners voted in favor of an ordinance that will require any restaurant with a liquor license within 100 feet of any residence or condo within the “Controlled Waterfront Development District” to close by 11:30 p.m. Sunday through Thursday and midnight on weekends. The only restaurant this affects is Son Cubano.
• After receiving more than $9 million in incentives from the New Jersey Economic Development Agency, Brooklyn-based Damascus Bakery broke ground in October on a new 117,000 square foot facility in Newark rather than in Secaucus. The wholesale pita bread company had for years planned to expand its growing operations in Secaucus. But brothers and bakery owners David and Edward Mafoud were met with opposition from residents and officials in Secaucus who argued the business could be a safety hazard. The brothers had received approval to open in Secaucus from the New Jersey Meadowlands Commission (NJMC), a state agency that has zoning jurisdiction over 88 percent of the town. But town residents and officials were upset that they weren’t consulted. The bakery’s owners filed a lawsuit alleging they were subjected to “political maneuvering, stonewalling, and corruption” that held up the approval of their building permit. In August, 2010 a U.S. District Court judge threw out the Mafouds’ case and in February 2011 the court refused to reinstate it.
To read more of the 2011 Year in review click HERE.