How To Profit From Lack of Profitability
Corrections or additions?
These articles by Bart Jackson and Kathleen McGinn Spring were prepared for the June 12, 2002 edition of
U.S. 1 Newspaper. All rights reserved.
Trenton Builds An Investor’s Dream
When did your leasing agent last offer to lower your
rent by $20,000? When did your client last hasten to adjust his needs
to your schedule and capacity? When were you absolutely guaranteed
incremental payment that arrived on time? Well, everyone from real
estate brokers to construction folk to retail and wholesale firms
of all sizes get ready. The city of Trenton is offering all these
in a massive, many-million-dollar rejuvenation sweep.
Individuals and businesses seeking a piece of this action will want
to attend “Business Opportunities in the New Trenton” on Wednesday,
June 19, at 7:30 a.m. the Nassau Club, sponsored by the Princeton
Chamber of Commerce. Cost: $24. Call 609-520-1776. Mercer County Executive
Bob Prunetti speaks on the major locations of renovation and
reconstruction, along with the benefits for building, investment,
and business relocation.
“The goal here is to recreate neighborhoods,” says Prunetti,
“to embellish, without dispossessing. Over the next three years,
it will create one of the most meaningful changes the city has seen.”
Prunetti knows about Trenton and change. Born and raised in the city,
he graduated from Trenton High and then from Trenton State, now the
College of New Jersey. Living now in Ewing, he has spent the last
seven years as Mercer’s top administrator.
Forty-one million dollars will go just for the construction of expanded
parking facilities in four different locales. The over 2,000-car capacity
will help clear the streets, laid out well before the invention of
the automobile, and afford access to the new light rail systems in
the city. In each of the four cases, the parking facilities are only
vertically expanding existent parking areas. New residences, restaurants,
businesses, and office spaces will be built in front of them and around
them. Also, old residences will be refurbished by individual contractors.
Planned neighborhoods will be rebuilt with a mix of residential and
commercial elements.
Targeted areas include:
The Furman Street parking lot. This lot is located oneblock away from the city sports arena where a new restaurant row isplanned in front of an expanded parking facility. Keating Constructionintends to break ground on the multi-story garage project this winter.The former metal plating factory on Hamilton Avenue. Thesite, across from Route 129, has been cleaned up. The new parkingfacility here will serve the adjacent light rail shelter. In addition,office space, commercial, and retail frontage is planned.South Broad Street Village. Located near the former siteof Apex Lumber, this area is slated to become a blended complex ofresidences, retail stores and office space. An innovative parkingstructure, as yet to be determined, will support the nearby lightrail service.Hudson and South Clinton Street. The existing RoeblingMarket and Kids’ Bridge Museum, along with the upcoming InventionFactory and a new school, are expected to transform this refurbishedneighborhood into a city-wide education center.”Opportunities, particularly for local firms, absolutely abound,”says Steve Dixon, head of the Mercer County Improvement Authority(MCIA). Dixon, a man whose Rutgers Ph.D. in urban planning launchedhim into a 20-year career of improving Central Jersey life, has meldeda multitude of programs to provide avenues for investors and participants:Business location. Distinct tax advantages will go toany firm planning to build or locate within the above areas, whichare designated as urban enterprise zones. Within these zones, retailshops charge only three percent sales tax, rather than the normalsix percent, on all goods. No sales tax is paid on any material usedin building or refurbishing your office and shop. A host of stateand county low and no-interest startup loans are available.Residential and commercial construction. Residential propertiesreceive the benefit of the Home-ownership and Neighborhood DevelopmentProgram (HAND.) Incentives include a $20,000 forgivable loan for currentresidents and for newcomers seeking to refurbish. For a property valuedat $80,000, HAND offers either the buyer — whether it is an individualor a construction firm — a low-interest $60,000 mortgage withthe remaining $20,000 provided a a grant. The note for the $20,000does not fall due until a profitable sale is made. MCIA will linkhomeowners with groups of contractors to handle refurbishing tasks.Venture capitalization. Investors purchasing individualresidences or vacant properties have a good chance of seeing theirproperties increase in value. MCIA will aid in redevelopment by linkinginvestors with contractors of equal means and capacity. Brokers canreceive a full, detailed list of available properties and new structures.Major investments. A consortium of banks has been enlistedby Mercer County to handle most of the major parking facility funds.Yet backers are still very much sought for all the other constructionfrom the museums to the sports bars. Dixon and his MCIA stand readyto facilitate loans, connecting investors with businesses of all sizes.What Trenton makes for the next three years will be a rejuvenationwith profitable participation for all kinds of business. Those interestedmay directly contact the Mercer County Improvement Authority at 609-278-8080.The MCIA has developed a CD detailing the scope and specifics of theplan.— Bart JacksonTop Of PageHow To Profit From Lack of ProfitabilityLast year nearly 40 high tech Princeton companies raisedcash by selling their tax losses to other businesses. They successfullyapplied to New Jersey’s Technology Business Tax Certificate TransferProgram, which made $40 million available to 118 businesses.Maybe your company is eligible to sell its tax credits too. The deadlineto apply is Friday, June 28.To be eligible, the company must have a new or expanding technologyor biotechnology and have no more than 225 employees. At least 75percent of the employees must work in New Jersey, and the companymust do a major part of its business in New Jersey. Companies cankeep on applying every year until they reach a lifetime cap of $10million.It’s as if a minimum wage earner who pays no income tax could sellher deductions to someone in a high tax bracket. Technology companiescan take research and development tax credits to offset the nine percentcorporate tax, but young companies are so poor they aren’t payingthat tax.Under the law passed four years ago, the young and poor firm can sellthe tax credit to the more profitable firm. The bigger company paysat least 75 percent of the value of the credit but gets to take 100percent off its state tax. The small company can use the proceedsmostly for fixed assets but also for salaries and working capital.Another potential deduction that can be sold is the one for net operatingloss (NOL). Companies can sell NOL carryforwards and unused researchand development tax credits to other New Jersey corporations for atleast 75 percent of their value.”Last year, a record 119 companies were approved to share the$40 million available annually through the program, says CarenS. Franzini, the New Jersey Economic Development Authority’s executivedirector. The NJEDA administers the program in conjunction with thestate taxation division and the Commission on Science and Technology.Among the major buyers for these credits have been the Bank of NewYork, PSE&G, Tiffany and Company, the New York Times Company, BNYCapital Markets Inc., Comcast Cablevision of New Jersey, and MerrillLynch Professional Clearing Corp. Approvals will be made in earlyfall.For a detailed guide to EDA programs, “The Power to Help New JerseyBusiness Grow,” call 609-292-1800 or write to NJEDA, Box 990,Trenton 08625, or go to www.njeda.com. At the website, lookfor the Resources/Applications/New Applicants Selling Business Application.The site also has a clickable map locating EDA projects by countyand a questionnaire that helps companies figure out what programsmight work in their business.Of last year’s successful applications, nearly 40 are from CentralJersey. Two have ceased operating (Princeton Teaching Associates SoftwareInc. and Ariel Corp., the digital signal processor company). Anotherof last year’s recipients, Anthra Pharmaceuticals, is downsizing itsoffices at the Carnegie Center. EchoCath, the medical device company,is down to a handful of people at 4326 Route 1 North.Last year’s pharmaceutical and biotech sellers included Xechem Inc./XechemInternational, a generic and proprietary drug company on Jersey Avenuein New Brunswick; Aesgen Inc. on Research Way, Gynetics Inc. on Route1 in Lawrenceville; Hymedix Inc., the hydrogel/drug deliverycompany in Dayton; and Morphochem/Small Molecule Therapeutics at PrincetonCorporate Plaza. Among the other R&D sellers of tax credits:Biotech R&DBiomira U.S.A. Inc., 1002 Eastpark Boulevard, Cranbury08512. 609-655-5300. Www.biomira.comResearch and development of immunotherapy products for treating cancer,formerly OncoTherapeutics Inc., owned by Alberta-based firm.Cytogen Corporation, 600 College Road East, CN5308, Princeton 08543-5308. 609-987-8200. Www.cytogen.comMarketing and development of products for targeted delivery of diagnosticand therapeutic substances directly to sites of disease.Delsys Pharmaceutical Corporation, 11 Deer ParkDrive, Monmouth Junction 08852. 732-329-3407. Www.delsyspharma.comPrivately-held developer of automated drug manufacturing and drugdelivery systems through electrostatic dry powder, with a total of54 employees.Integra LifeSciences Corporation, 105 Morgan Lane,Box 688, Plainsboro 08536. 609-275-0500. Home page: www.integra-ls.comTissue and organ replacements, including artificial skin, cartilage,and nerve conduits.Elan Pharmaceutical, 1 Research Way, Princeton08540. 609-452-7060. Www:elan.comDevelopment of advanced liposomal drugs for the treatment of cancerand infectious diseases, also at 600 College Road and 4 CorporateDrive at Exit 8A.Orchid BioSciences Inc., 303 College Road East,Princeton 08543. 609-750-2200. Www.orchid.comProduction services and technologies of single nucleotide polymorphism(SNP) scoring and genetic diversity analysis, with 300 employees overall.Palatin Technologies Inc., 103 Carnegie Center,Suite 200, Princeton 08540. 609-520-1911. Www.palatin.comProducts for sexual dysfunction and appendicitis detection.Senesco Technologies Inc., 303 George Street, Suite420, New Brunswick 08901. 732-296-8400. Home page: www.senesco.comAgrobiotechnology — developing gene technology to extend the shelf-lifeof produce.Chemical R&DBlackLight Power, 493 Edinburg Road, Cranbury 08512.609-490-1090. Home page: www.blacklightpower.comResearch and development of novel hydrogen chemistry with applicationsof novel compounds and alternative power sources.Electronic R&DPrinceton Lightwave Inc., 2601 Route 130 South,Cranbury 08512. 609-925-8100. Home page: www.princetonlightwave.comHigh performance optical components including high-power pump lasersand modules for advanced network applications.Also among the sellers last year were Fullcomm Inc.,a computer hardware company at the Straube Center; Digital Demographics,a New-Brunswick-based Internet advertising and marketing firm; Dotphoto.com,Glenn Paul’s online photo company in Ewing (www.dotphoto.com), andPanama Tech, an E-commerce company at 5 Independence Way.Princeton Video Image (PVI), which has innovative software and hardwarefor television advertising, also tried to help out its financial situationby selling the tax credits. Other sales were by Datamark Technologies,the developer of electronic customer loyalty programs that is nowpart of American List Counsel and Impower at the Dow Jones campus;Knowledge Window Inc., a distance learning software company at PrincetonService Center; Voxware Inc., voice-based solutions at Franklin CornerRoad.Also Envirogen, the bioremediation company on Quakerbridge Road; i-StatCorporation, the diagnostic blood analysis equipment manufacturingin East Windsor; Ocean Power Technologies on Reed Road; Quantem Corporation,a thermal sensing and control device company on Lower Ferry Road,Systech Solutions Inc., maker of automatic inspection systems in Cranbury;WorldWater Corp., the renewable energy company at Pennington BusinessPark: and Laser Energetics Inc., maker of laser processors on Quakerbridge Road.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
