NJBIZ met Tim Sullivan, CEO of the New Jersey Economic Development Authority, a day after Gov. Phil Murphy unveiled his latest state spending plan, a $53.1 billion vision for building the next New Jersey. The NJEDA will play a crucial role in realizing this vision.
“This is about jobs for our kids,” Sullivan told NJBIZ. “This is about jobs for today. But it’s also about jobs for our kids and making sure New Jersey is a place where kids don’t have to graduate high school or college and drop out to find the right opportunity in a growing, thriving, and dynamic sector. “
“A New Jersey that attracts the world’s largest corporations and where small businesses can grow and thrive and, more importantly, find the vibrant workforce they need,” Murphy said in his speech.
“The governor’s budget proposal is incredibly strong. I thought it hit the right notes in terms of affordability and fiscal responsibility,” Sullivan said. “And the governor really got the connection between those two things and our overall economic and business development climate right.”
He emphasized that businesses and residents want a place that has great schools, is vibrant, affordable and has a decent wheelhouse.
“I couldn’t be more excited about all of the different things that we could potentially have at NJEDA. Of course, we’ll see what the legislator has to say about that. And I’m sure we’ll come up with more ideas,” Sullivan said.
“I couldn’t be more excited about all of the different things that we could possibly be up to at NJEDA,” said Tim Sullivan, CEO of the New Jersey Economic Development Authority, pictured September 2021. -EDWIN J. TORRES/OFFICE OF THE GOVERNOR OF NJ
Some toplines from NJEDA’s perspective are: a fourth consecutive budget with a $50 million allocation to Main Street programs; more than $50 million in new resources to expand the green economy, including a $40 million Green Fund capable of mobilizing both private and federal funds; an additional $50 million for the Strategic Innovation Centers program, which supports projects such as HAX’s global headquarters in Newark and HELIX in New Brunswick; the establishment of a city investment fund to work in parallel with current and proposed business incentive programs to support the arts and the creation of parks and gardens alongside other city infrastructure; and a $6 million allocation to support diversity through employee ownership to bridge the wealth gap between people of color and the rest of the state.
And, perhaps most importantly, Sullivan said the budget proposal will provide an opportunity to continue programs and initiatives that are already making a big impact and gain momentum as the administration works toward the Next New Jersey vision.
Alluding to Murphy’s statement that the Next New Jersey is here today, Sullivan echoed that sentiment, citing examples in sectors such as offshore wind, clean energy, film and television, cannabis, life sciences, innovation economies and more.
“It’s about things like investing in innovation and life sciences, things like HELIX in New Brunswick, things like HAX and what’s going to happen at the former Merck facility in Kenilworth,” Sullivan explained. “These are things that we think are really long-term bets that will pay off for the state, and for the next New Jersey when it’s fully there in five, 10, 15, 20 years.”
Speaking of HAX, Sullivan said the team there is knocking it out of the park while the Newark operation ramps up. HAX is a startup development program for pre-seed hard tech companies overseen by SOSV, a Princeton-based venture capital firm, with support and investment from NJEDA. In August, HAX in Newark signed a 10-year lease for the facility at 707 Broad St. to serve as the US headquarters for the startup accelerator.
“It was a great win for the state, for the governor, and for Newark when we got HAX to select Newark as part of a national contest,” Sullivan said. “That was a win in itself. But what we were hoping to see is exactly what we have seen, which is companies coming to Newark, getting funded and getting a foothold in Newark.”
Artist’s rendering of The Hub in New Brunswick, one of three main components of HELIX. – OFFICE OF GOVERNMENT. Phil Murphy
He said more than five funded companies are going through the scheme, which is gaining momentum. SOSV intends to guide 100 companies through the program over the next five years.
“And one of the things to keep in mind when we think about these early-stage companies is that 9 out of 10, 99 out of 100 of these companies are never going to hear from them. You will stay five or ten people. But if we can get one or two of them to be the next Tesla, the next big thing, the next Johnson & Johnson, the next Merck, we will get an extraordinary return on our investment,” Sullivan said.
He added that HAX and HELIX really aim to strengthen and make the innovation ecosystem more vibrant to make the ground more fertile for growing early-stage companies.
“If we get this going right, and we’re not quite there yet, the level of government involvement/government intervention will decrease over time because you have a healthier startup ecosystem,” Sullivan explained. “They have more founders. They get more funding from the private venture capital system.”
The ultimate goal of the administration is to have viable sources of innovation in locations across the state.
Aside from HAX and HELIX, some other notable early-stage investment/startup programs and initiatives for the NJEDA include: the Angel Investor Tax Credit, a $35 million annual cap program that provides corporate or gross income tax credits based on a qualifying Investing in an emerging technology company in New Jersey; the Net Operating Loss program, which has an annual cap of $75 million to help participants sell their NOL losses and unused R&D tax credits to companies to provide early-stage life science and technology companies with cash , without sacrificing equity; the New Jersey Innovation Evergreen Fund, an inaugural program under which the NJEDA Board of Directors approved eight companies in December to purchase $50 million in tax credits to create public-private partnerships to spur investment; and the New Jersey Innovation Fellows Program, a $10 million program due to launch in the spring that will provide income-replacement grants to budding entrepreneurs.
It was a very good year
2022 was a big year for NJEDA. Just look at the month of December:
Sullivan said these types of programs are well received in startup and early-stage investor circles, and that during meetings with companies on a recent trip to California with the governor, they received particularly positive feedback on their efforts.
“One of the things to give Gov. Murphy credit for is his willingness to champion early-stage investment and innovation, both politically and financially,” Sullivan said. “Because if that works, and I’m confident that it will, it doesn’t pay off in an election cycle. This pays off in the generation cycle.”
He reiterated that most of these early-stage companies are small and opaque.
“But these are corporations, if we get it right, two or three governors are going to cut the ribbon from now on,” Sullivan said. “And I think Phil Murphy has to be given a lot of credit for being so forward-thinking, investing so long-term.”
And as budget season officially begins, Sullivan said the NJEDA will continue to build on its momentum and efforts from 2022-2023 as the Legislature moves through its fiscal 2024 budget process, which he hopes will lead to a few more chips on the table that his office can use for economic development efforts.
“The good news is, if the governor’s budget proposal goes through, we’re going to stay incredibly busy,” Sullivan said. “The challenging news is that we will remain incredibly busy. If you see my colleagues looking grumpy or sleepy, it’s because we’re working like hell to boost the economy and follow the governor’s lead. If something like the governor’s budget is accepted, we’ll still have resources to put into ongoing and proven programs, as well as a handful of new things.”
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