New York

Incentive Overview: New York’s Excelsior Jobs Program Drives Investment and Job Growth

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The Excelsior Jobs Program is a powerful economic development incentive created to provide competitive financial incentives for businesses in New York. Designed to encourage businesses to expand in or relocate to New York, the Program applies to businesses that will create or retain jobs and make significant capital investments.

Generally, the be eligible under the Program, a business must create a specified number of net new jobs, defined as being new to the State, full-time or equivalent to full-time (requiring at least 35 hours per week), and filled for more than six months.

The following strategic businesses located in or planning to locate in New York are eligible under the Program:

  • Scientific Research and Development businesses creating at least 5 net new jobs

  • Software Development businesses creating at least 5 net new jobs

  • Financial services (customer service) back office operations creating at least 25 net new jobs

  • Agriculture businesses creating at least 5 net new jobs

  • Manufacturing businesses creating at least 5 net new jobs

  • Back office businesses creating at least 25 net new jobs

  • Distribution businesses creating at least 50 net new jobs

  • Music Production businesses creating at least 5 net new jobs

  • Entertainment Companies creating at least 100 net new jobs

  • Life Sciences Companies creating at least 5 net new jobs

  • Other businesses creating at least 150 net new jobs and investing at least $3 million

  • Businesses in strategic industries that make significant capital investment that have at least 25 employees; manufacturing firms who retain at least 5 employees are also eligible to apply for participation in the program.

Businesses deemed eligible under the Program may qualify for four fully refundable tax credits:

  1. Excelsior Jobs Tax Credit:  A credit of 6.85% of wages per net new job.

  2. Excelsior Investment Tax Credit:  Valued at 2% of qualified investments.

  3. Excelsior Research and Development Tax Credit:  A credit of 50% of the Federal Research and Development credit up to six percent of research expenditures in New York State.

  4. Excelsior Real Property Tax Credit: Available to firms locating in certain distressed areas and to firms in targeted industries that meet higher employment and investment thresholds (Regionally Significant Project).

The Excelsior Jobs Program has been wildly popular and incredibly successful. Since its implementation, over 1,870 applications have been submitted, with 548 projects receiving approval, totaling over $954 million in tax credits being committed. Eligible businesses under the Program have committed to capital investments of over $5.38 billion, research and development expenditures of another $2.84 billion and the creation of 56,826 jobs.  

If interested in learning more about the Excelsior Jobs Program or other economic development incentive programs, please do not hesitate to contact Chris Murphy, Esq. at (973) 723-7036 or cmurphy@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


Murphy Partners LLP Continues to Expand with Addition of New Partner

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Murphy Partners LLP is pleased to announce that John P. McDonough will be joining the firm as a partner in the firm’s Commercial Real Estate Group.

John is an experienced transactional real estate attorney. As a partner in the firm, John’s practice will focus on all aspects of commercial real estate transactions, including office and retail leasing, acquisitions, dispositions, and real estate finance, including restructuring and workouts. He will also advise clients in connection with business transactions, construction law, and other commercial matters.

Prior to joining the firm, John spent nearly a decade as an attorney at the Port Authority of New York and New Jersey, where he represented the bi-state agency in a diverse array of real estate, construction, and development matters. He also served as bond counsel for the agency and worked extensively on the development of the World Trade Center and Transit Hub.

Following his time at the Port Authority of New York and New Jersey, John served as Assistant Corporation Counsel for the City of Jersey City, where he regularly advised the City on commercial real estate and development matters.

“We are incredibly excited to have John join our growing team. He is a seasoned attorney, with experience handling complex commercial real estate transactions in both New Jersey and New York. His experience will be instrumental in our continued commitment to providing clients with effective legal solutions,” says Kellen F. Murphy, the firm’s managing partner.

“I’m thrilled to be joining the dynamic team at Murphy Partners and look forward to contributing to the firm’s future growth and success as a leader in the New Jersey and New York real estate legal market,” says John P. McDonough.

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

Incentive Alert: Federal Tax Law Creates Incentives for Investment in “Opportunity Zones”

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While corporate and individual tax relief took center stage in the debate over the passage of the new federal tax reform legislation, a less-discussed section of the new law may have a significant impact in driving investment into distressed areas throughout the country.

The new law establishes the Opportunity Zone Program, which creates preferential tax treatment for unrealized capital gains that are reinvested in to-be-determine qualified opportunity zones. The new law instructs governors in each state (and the Mayor of Washington, D.C.) to identify eligible census tracts from a pool of low-income, high-poverty census tracts (each state is limited to selecting up to 25% of the state’s census tracts that meet the eligibility requirements).

Importantly, the new law will allow corporations and partnerships to establish Opportunity Funds, created for the purpose of investing in qualified opportunity zone property (which includes any opportunity zone business stock, any opportunity zone partnership interest, and any opportunity zone business property).

As recently outlined by the Economic Innovation Group (www.eig.org), investments made in a qualified Opportunity Fund will receive preferential tax treatment, including:

  1. A temporary deferral of inclusion in taxable income for capital gains reinvested in an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.

  2. A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.

  3. A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.

To take advantage of the special tax treatment created under this program, taxpayers must roll over non-opportunity zone gains before Dec. 31, 2026.

If interested in learning more about this or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

Incentive Overview: New York’s Excelsior Jobs Program Drives Investment and Job Growth

NYC Skyline Empire State.jpg

The Excelsior Jobs Program is a powerful economic development incentive created to provide competitive financial incentives for businesses in New York. Designed to encourage businesses to expand in or relocate to New York, the Program applies to businesses that will create or retain jobs and make significant capital investments.

Generally, the be eligible under the Program, a business must create a specified number of net new jobs, defined as being new to the State, full-time or equivalent to full-time (requiring at least 35 hours per week), and filled for more than six months.

The following strategic businesses located in or planning to locate in New York are eligible under the Program:

  • Scientific Research and Development businesses creating at least 5 net new jobs

  • Software Development businesses creating at least 5 net new jobs

  • Financial services (customer service) back office operations creating at least 25 net new jobs

  • Agriculture businesses creating at least 5 net new jobs

  • Manufacturing businesses creating at least 5 net new jobs

  • Back office businesses creating at least 25 net new jobs

  • Distribution businesses creating at least 50 net new jobs

  • Music Production businesses creating at least 5 net new jobs

  • Entertainment Companies creating at least 100 net new jobs

  • Life Sciences Companies creating at least 5 net new jobs

  • Other businesses creating at least 150 net new jobs and investing at least $3 million

  • Businesses in strategic industries that make significant capital investment that have at least 25 employees; manufacturing firms who retain at least 5 employees are also eligible to apply for participation in the program.

Businesses deemed eligible under the Program may qualify for four fully refundable tax credits:

  1. Excelsior Jobs Tax Credit:  A credit of 6.85% of wages per net new job.

  2. Excelsior Investment Tax Credit:  Valued at 2% of qualified investments.

  3. Excelsior Research and Development Tax Credit:  A credit of 50% of the Federal Research and Development credit up to six percent of research expenditures in New York State.

  4. Excelsior Real Property Tax Credit: Available to firms locating in certain distressed areas and to firms in targeted industries that meet higher employment and investment thresholds (Regionally Significant Project).

The Excelsior Jobs Program has been wildly popular and incredibly successful. Since its implementation, over 1,870 applications have been submitted, with 548 projects receiving approval, totaling over $954 million in tax credits being committed. Eligible businesses under the Program have committed to capital investments of over $5.38 billion, research and development expenditures of another $2.84 billion and the creation of 56,826 jobs.  

If interested in learning more about the Excelsior Jobs Program or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 723-7036 or info@murphyllp.com. 

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in commercial real estate and economic incentive advisory.  The firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

NJBIZ Op-ed: The Importance of Business Incentive Programs in a Changing Economy

A recent op-ed in NJBIZ, written by Chris J. Murphy, on the importance of business incentive programs in a changing economy. 

http://www.njbiz.com/article/20170905/INDINSIGHTS/170909960/the-importance-of-business-incentive-programs-in-a-changing-economy

Murphy Partners LLP Featured in Real Estate NJ

New York Extends Tax Incentives for Businesses and Developers in Lower Manhattan

As New Jersey and New York City continue to compete for marquee corporate tenants, Governor Andrew Cuomo recently signed legislation to extend tax incentives aimed at attracting businesses and developers to Lower Manhattan. The legislation extends five programs, including the Commercial Revitalization Program (CRP), the Industrial and Commercial Abatement Program, the Sales Tax Exemption Program, the Lower Manhattan Relocation Employment Assistance Program (LM-REAP), and the Lower Manhattan Energy Program.

While each program is different in size and scope, the ultimate goal remains the same: to increase private capital investment and encourage job growth in an increasingly competitive environment. The legislation extends the following programs:

  • Commercial Revitalization Program (CRP) provides tax incentives to owners investing in building improvements in nonresidential or mixed-use buildings built before 1975.

  • Industrial and Commercial Abatement Program provides a property tax abatement for up to 25 years for building, modernizing, expanding, or otherwise physically improving industrial and commercial buildings.

  • Sales Tax Exemption Program provides an abatement for goods purchased for building out space in Lower Manhattan.

  • Lower Manhattan Relocation Employment Assistance Program (LM-REAP) provides an annual credit of $3,000 per job, per year for companies moving to lower Manhattan from outside of the city.

  • Lower Manhattan Energy Program provides property owners and commercial tenants in eligible buildings located in lower Manhattan up to 45% reduction in electricity transportation and delivery costs for up to twelve years.   

On the other side of the river, New Jersey still offers highly competitive tax incentives for businesses and developers, including the Grow New Jersey Assistance Program (Grow NJ) and the Economic Redevelopment and Growth (ERG) Program.

Created under the Economic Opportunity Act (“EOA”) of 2013, Grow NJ is the State’s main job creation and business retention incentive program. The program is designed to encourage economic development and job creation and to preserve jobs that currently exist in New Jersey but which are in danger of being relocated outside of the State. Businesses meeting certain requirements may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year.

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 233 projects have received awards, totaling over $4.4 billion in tax credits. Once certified, the 233 projects will drive over $3.9 billion in private capital investment, create over 29,000 new jobs, and retain over 28,000 jobs at risk of leaving the State.  

Also created under the EOA, the ERG Program is designed to help developers address revenue gaps in development projects (defined as having insufficient revenues to support the project debt service under a standard financing scenario). The Program can also apply to projects that have a below market development margin or rate of return.

In most cases, the base amount of the reimbursement cannot exceed 20 percent of the eligible cost of the project. Importantly, a developer seeking an incentive grant is required to make an equity participation for at least 20 percent of the project’s eligible costs. 

With limited exceptions, the annual percentage amount of reimbursement shall not exceed an average of 75% of the annual incremental state revenues directly realized from businesses operating on the redevelopment project premises. These revenues are then paid to the developer in the form of a grant derived from the realized revenues.

The ERG Program has also been incredibly successful. Under the commercial component of the program, the NJEDA has awarded grants to 11 applicants, totaling $305,508,906. The program has helped drive over $1.5 billion in private capital investment, and has led to thousands of construction jobs throughout the State.

As state and local governments continue to compete for new and existing business, policymakers will continue to leverage tax incentives in an effort to attract jobs and private capital investment. In order to remain effective, tax incentive programs must naturally evolve over time. While some have argued against using tax incentives as part of an overall economic development strategy, the idea that one state would unilaterally disarm in this highly competitive market is hard to imagine. Tax incentives will not always close the deal. However, for states to remain competitive, they must continue to be part of the conversation.  

If interesting in learning more about these and other programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate development and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

New York Extends Film Production Tax Credit

On April 10, 2017, New York Governor Andrew Cuomo signed into law the state budget for the 2018 fiscal year. Among many other things, the budget extends New York’s incentive program for the film industry for three years, to 2022. The program had been set to expire in 2019.

An important economic development tool, New York’s Film Production Tax Credit program (NYS Tax Law § 24) has been wildly successful in attracting film production to New York and creating film industry-related jobs throughout the State. The program provides certain tax incentives to companies that produce qualified feature films, television movies, and television series and pilots in New York State, and/or incur post-production costs in the State associated with the original creation of such productions. The 2018 budget continues to allocate $420 million per year for tax credits for the program (up to $25 million of which may be dedicated to encourage the growth of post-production industry in New York).    

Under the Film Production Tax Credit program, film production companies may be eligible to receive a tax credit of 30% on qualified production and/or post-production costs incurred in New York State. An additional 10% tax credit is available on qualified labor expenses incurred in certain upstate counties, and a 5% increase in the tax credit is available for post-production costs incurred in upstate New York. To qualify for the production tax credit, a production company must film a substantial portion of the project in New York. The post-production tax credit is available where the project was filmed predominantly outside of New York, but the film production company contracts for the post-production work to be undertaken by a company in New York.

On the other side of the Hudson, New Jersey’s film production tax credit program remains in limbo—at least for now. Following the program’s expiration a year earlier, in 2016, Governor Christie vetoed the Garden State Film and Digital Media Jobs Act, which would have reinstated and enhanced the tax credits available in New Jersey for qualified film and digital media content production expenses, and revised and expanded film and digital media tax credit eligibility requirements. The legislation would have also required the New Jersey Economic Development Authority to study the prospect of developing a film production studio in North Jersey. The Garden State Film and Digital Media Jobs Act (S1053/A2562) had been reintroduced in the State Legislature, where it currently remains pending.     

MURPHY PARTNERS LLP

If interested in learning more about these and other economic development incentive programs, please do not hesitate to reach out to us by telephone at (973) 877-6984 or by email at info@murphyllp.com. In the meantime, please take some time to explore the website. We look forward to hearing from you soon.

Murphy Partners LLP is a boutique law firm specializing in governmental affairs, economic incentive advisory, and land use and redevelopment law. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal and government affairs services to meet the distinctive needs of our clients. Through the development of comprehensive legal and government affairs strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.