State approves $22M for Deutsche Bank move

Originally appeared in the Star Ledger on Wednesday, August 09, 2006

BY DUNSTAN McNICHOL

A month after luring 1,200 Citigroup employees to Jersey City with the promise of a $37 million in centive grant, New Jersey yesterday offered Deutsche Bank almost $22 million to relocate 1,200 of its workers to the Jersey City waterfront.

The Business Employment In centive Program grant was the largest of nine grant offers approved by the state Economic Development Authority at yesterday's regular meeting.

The Deutsche Bank grant is designed to induce the German financial giant to move most of its operations support staff from New York City to the Harborside Financial Center on the Jersey City waterfront.

According to information presented to the authority yesterday, Deutsche Bank's workers would earn average salaries of $75,000. The bank would collect a total of $21.9 million over 10 years based on a grant formula that pays the company 80 percent of the state in come taxes collected from its new employees.

Five years ago, Deutsche Bank was awarded a smaller BEIP grant for locating 80 jobs in Jersey City. It has been paid $1.7 million under that deal so far, the material presented to the authority shows.

The latest offer to Deutsche Bank comes as another banking giant, Citigroup, revealed it has signed a lease to relocate 1,200 workers from New York City to the Newport Office Center in Jersey City.

"My understanding is that lease has been signed," said Shannon Bell, a Citigroup spokeswoman. "The move should start in the first quarter of next year."

Citigroup stands to collect up to $37 million for the move. That is in addition to a separate $57.2 million incentive grant Citigroup was awarded for moving 2,150 workers to a Warren Township development.

Supporters of the incentive program say the grants help New Jersey compete for high-end jobs that are valuable to the state.

"It's a great thing they're moving forward and relocating 1,200 jobs to Jersey City," said EDA spokeswoman Nicole Royle.

Critics, however, say the program steers benefits to companies that do not need the incentives at the expense of investments in roads, schools and other public projects.

"They're a huge, global company that probably doesn't need a penny of it," said Jon Shure, president of New Jersey Policy Perspective, a Trenton think tank that has authored a series of critical reviews of the BEIP program. "They've all gotten good at taking what they can get because they can get it."

EDA officials credit the program with helping land some 67,000 jobs since it was started in 1996. The state so far has paid out $298 million to companies enrolled in the program, and is scheduled to pay another $152 million this year.