Newark’s Mayor on Amazon, Infrastructure and Taxes
(Bloomberg) -- Just being on the list of finalists for Amazon.com Inc.’s second headquarters is spurring development and economic growth in New Jersey’s most populous city, Mayor Ras J. Baraka said in an interview.
Earlier this month, New Jersey’s largest city added as much as $1 billion in tax breaks to lure the sought-after retail giant after its city council voted to give payroll-tax exemptions to any company that creates 30,000 jobs and invests $3 billion over the next 20 years.
Economic development initiatives may also help the city’s finances. Moody’s Investors Service removed the risk that Newark would have its bonds cut to junk grade when it changed its outlook on Newark’s rating -- now the lowest investment grade -- to positive in January. It said that successful economic development initiatives that boost revenues may improve the city’s rating.
Baraka’s comments have been edited and condensed.
How can the city afford its proposed tax package for Amazon?
These tax breaks would be over a period of years and there’s nothing out of the ordinary. We give corporations tax abatements, which is what we’re talking to Amazon about, or payroll tax-abatements as well if they hire a certain percentage of Newarkans or they invest a certain amount of money into our economy.
What other kind of companies is Newark trying to attract?
Mostly tech companies and companies in logistics and transportation. We have a growing transportation and logistics market in the city.
Our tech industry is growing, we have 27 miles of fiber underground that the city actually owns that people are plugging into. So it is right on the money to get tech companies. We actually have an over $50 million tech incubator in the city. Lot of investors have put money into helping startups in the city.
What are the biggest infrastructure challenges facing your city?
Transportation. The fact that we have all these assets means that you have to keep these assets modernized and transportation is one of them. We have a trifecta: air, sea and rail. But you have to make sure those things are kept up and you need significant investment. I think there has been really no investment at all in the Northeast corridor.
The more you concentrate this community, the more you build the economy, not only do you need more trains but you need better trains, more efficient trains. I don’t think really, honestly, this country has invested in infrastructure and transportation the way that it should have comparable to other nations around the world.
What steps are you taking for a potential upgrade from Moody’s?
Newark was in a bad financial state for a long time -- we’re still not out of the woods -- that’s for sure. But part of it is just some fiscal responsibility things, trying to get our budget passed in a responsible way, quicker than we normally do. Do the things they ask you to do very specifically.
We have $4 billion worth of development happening in our city right now. That obviously adds to it. That’s been incredibly helpful for us to move our outlook to where it is now.
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