Officials Hail Panasonic Move

The planned move by global electronics manufacturer Panasonic to Newark is being celebrated by local officials as one of  the city’s most significant steps forward made under the administration of two-term Mayor Cory A. Booker.

Panasonic officials say the move will bring jobs to the city, reduce the company’s carbon footprint, boost the use of Newark’s public transportation and make good use of the city’s downtown retail space.

It was a little under a month ago that a contingent led by Booker and Panasonic Corporation of North America Chairman and CEO Joseph M. Taylor signed a lease agreement that will bring the international firm and 1,000 employees to Newark by 2013.

Announced during a news conference in Newark, the firm would move its North America headquarters from its longtime digs in Secaucus to a brand new, $190 million, state of the art, sustainable high-rise office building to be constructed along the Passaic River and at the intersection Raymond Boulevard and McCarter Highway.

The company would lease a large portion of the planned 410,000-square-foot building that has been dubbed Two Riverfront Center, after its lease ends in 2012.

Panasonic's planned move from its 39-year North American headquarters in Secaucus was the end result of negotiations with the city and a move largely aided by a $102.4 million transit hub tax credit from the state’s Economic Development Authority (EDA), officials said.

"Panasonic's arrival demonstrates a confidence in our city — in our workforce, in our infrastructure, and in our future," said Booker in a prepared statement. "This is a monumental moment for Newark — a true milestone in our city's rebirth and revitalization. It is also a reaffirmation of Panasonic's corporate values, including its commitment to making a positive contribution to society."

Finalized by the stroke of a pen on April 20, the move was applauded by state and local officials including Lt. Gov. Kim Guadagno, the city municipal council and Newark Deputy Mayor for Economic and Housing Development Stefan Pryor.

Pryor said the tax break will extend for 10 years and also require the technology company to create about 200 jobs. He said a first source agreement will allow Newark residents to have the first opportunity to apply for 100 of the jobs expected to be created at Panasonic.

While hailed in Newark, the move has been openly panned and legally challenged by current landlord Hartz Mountain Industries, which has leased office space to the electronics company for almost 40 years.

Senior Vice President of Hartz Mountain Industries Allen Magrini said his firm is challenging the action that allows use of state EDA funds to provide the tax credit to a company already sited in New Jersey.

In two separate legal actions, Magrini  said Hartz Mountain is requesting documents through the Open Public Records Act that explain the EDA policy that allows the use of the grant for the relocation of an existing state company.

Hartz Mountain Industries is also filing an appeal of the EDA’s award of the $102.4 million credit in the appellate division of Superior Court in Trenton.

Magrini argues that the grant program funds are supposed to be used to attract firms from outside of New Jersey to locate to one of its nine hub communities. He said Hartz Mountain contends the Panasonic program constitutes a misuse of the state EDA program.

"The basis for our concern is the state subsidy should not be used to poach jobs from one town to another—they should use another program," said Magrini. "The problem is this program was supposed to target companies to one of the nine urban hubs. With this use nine towns can benefit and the other 557 can get hurt."

Peter Fannon, vice president of technology policy for Panasonic Corporation of North America, disagrees.

Fannon said the move to Newark comes at the end of months of negotiations that could have seen the electronics manufacturing giant leave for any number of places including: New York City, where it was located before Secaucus; Georgia, Southern California and Illinois, where it owns large tracts of land.

"We take the position that the Hartz challenge is without merit and that it will fail and it will be denied," Fannon told Patch.

He said the move to Newark was in accordance with the companies existing relationships and with its overall long-term business goals to become the "number one green innovations company in the electronics industry and in the world by 2018," which is the firm's centennial.

Fannon said the move to Newark and the planned Two Riverfront Center accomplishes a large part of these company goals. He said with the move Panasonic would cut its carbon footprint by first moving to a smaller, more efficient facility.

Panasonic currently runs its North American operations from a sprawling campus site with three buildings on 50 acres. The planned move to Newark would consolidate operations to a 250,000-square-foot space in the Newark office tower.

In addition, Fannon said the firm’s 1,000 employees would have easier access to the proposed site, which would be located less than a block from Newark Penn Station.

"This is a hub with a lot of connecting bus service and trains," said Fannon. "We'd be reducing our carbon footprint by half in large part by reducing the day-to-day commuter traffic that our employees use to get to the current site, which has limited public transit."

In addition, Fannon said Panasonic plans to work with project developers Matrix Development Group and SJP Properties to utilize its current innovations. He said one such innovation being considered is the use of cogeneration fuel cells for more efficient heating.

Already in use for a limited number of small businesses and homes, Fannon said the technology can drop heating costs by more than 30 percent and lessen the use of electrical grids.

"We're strongly invested in businesses that make and support environmental responsibility," said Fannon. "We want to be a bigger presence and our move to Newark is a greater example of how we can do that."

Deputy Mayor of Development Stefan Pryor, who is also executive director of the Brick City Development Corporation, said the Panasonic move and construction of Two Riverfront Center represents the first office tower built in the city in almost 20 years.

Pryor said attracting Panasonic also meets Newark's continuing goal to attract international companies. He said Panasonic now will join firms like Audible.com and Standard Charter Bank in recently moving to Newark.

"Newark sells itself these days and makes the sales very straight forward," said Pryor. "We are projecting a positive image worldwide, statewide and nationwide." Construction on the Two Riverfront Center building is slated to begin by year's end.

In addition, Newark has more than 25 active construction projects set to begin or already underway. He said construction spending in Newark will total about $600 million this year, creating a half million square feet of newly renovated space and roughly 2,200 jobs.

"Its importance (the Panasonic planned move) cannot be overstated; this transaction is a game changer," said Pryor. "This sets the stage and says Newark is a globally competitive city and that we can attract companies with a worldwide brand."