Officials in New Jersey have approved a nearly $10 million tax credit aimed at encouraging Party City Holdings Inc. to lease more than 200,000 square feet of office space in Woodcliff Lake.
Board members for the Economic Development Authority approved the proposed tax credit award of $1.43 million per year over seven years, totaling $9.99 million, at their monthly board meeting on Wednesday, according to recorded meeting minutes.
The incentive is the first of its kind awarded under the EDA’s Emerge Program, which is described by the agency as “a critical economic development tool that will bring successful businesses to New Jersey, incentivize them to create jobs for New Jersey residents, and promote expanded economic opportunities.”
State officials hope to entice Party City to consolidate its existing offices in Rockaway, New Jersey and Elmsford, New York, and move operations to a new headquarters at 100 Tice Blvd. in Woodcliff Lake under a full-building, 16-year lease. The company is considering leasing the entire 208,911-square-foot space, which formerly housed Eisai Inc. Pharmaceuticals, state officials said. The space, officials said, could be renovated to showcase products and host vendors and clients. The building will have workspace to accommodate approximately 800 employees, they said.
“The applicant’s goal for this real estate consolidation is to have a single headquarter presence that would allow the company to expand at one facility, creating synergy, increasing collaboration, and improving team building among its employees,” said CEO Tim Sullivan in a project memo to members of the EDA.
The project is not a done deal yet, as Party City is also considering an alternative site in White Plains, New York, as noted by Brian Sabina, Chief Economic Growth Officer, during this week’s board meeting. The competing incentive offer through New York State’s Excelsior Tax Credit Program is for up to $15.7 million over 10 years. Unlike the Emerge Program, the New York State program does not charge fees.
“It’s clearly a competitive situation,” Sabina said Wednesday.
The public may only associate Party City with Halloween costumes or assume after a spate of store closings that it’s no longer a major player, but the company remains the largest retailer of party goods in the United States, Canada and Mexico, with approximately 825 company-owned and franchise stores in the U.S alone. Party City’s founder, Steve Mandell, started the business in 1986 in East Hanover.
If the company ultimately chooses to return to its Garden State roots and move to Woodcliff Lake, it would retain 338 full-time, non-retail jobs at risk of leaving the state and bring 357 new full-time jobs to New Jersey, said Business Development Officer Ivan Mendez on Wednesday.
“These are high-paying corporate positions with a median salary well above the current Bergen County median salary,” Mendez added.
Following the board approval on Wednesday, Party City has 12 months to submit a progress report indicating that the business has a site plan approval submitted and three years to complete the project. Party City was previously approved for a Business Employment Incentive Program Grant in 2004, however, that award was subsequently withdrawn in 2008 due to non-responsiveness. Nevertheless, officials are hoping things will be different with the Emerge project.
The Emerge program was created under the New Jersey Economic Recovery Act of 2020 and offers per-job tax credits in “priority sectors” of the state for up to seven years, provided the proposals meet pre-determined criteria at application and during a commitment period that is 1.5 times the length of the award, according to the NJDA website.
One stipulation of the program is that projects must have a net positive economic benefit to the state equating to 400% of the tax credit amount. In Party City’s case, the EDA calculates that the present value of the net benefit to the state is about $35.7 million, or a 481% of the award. In other words, for every dollar in tax incentives, the state is getting back $4.81, EDA officials determined.
“If Party City should select us it would be a home run for our residents,” said Woodcliff Lake Mayor Carlos Rendo.
If the company moves forward with a site at Woodcliff Lake, its anticipated eligible capital investment there is $32.3 million, including landlord and tenant improvements, design and construction, furniture, fixtures and equipment.
“It’s all positive. We’re ecstatic that this was approved by the New Jersey Department of Economic Development,” Rendo said.
Rendo said he was not provided with an exact timeline for when Party City would make its decision, but he’s “confident” that Woodcliff Lake, “offers the best opportunity.”
In a statement sent to NJ Advance Media, a spokesperson for Party City said it was too early for the company to provide comment.
“While we are appreciative of the Emerge Tax Credit award from the State of New Jersey, we have not yet finalized our location or lease agreement. Therefore, it is premature to discuss plans for our future headquarters in greater detail at this time,” the representative said.
Editor’s note: This story was updated on Sept. 27 to reflect Party City’s response.
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Jackie Roman may be reached at jroman@njadvancemedia.com.
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