Subaru of America's early December decision to move its corporate headquarters to Camden, N.J. is a credit positive for one of the nation's poorest cities, Moody's Investors Service said on Dec. 11.
The automaker's move to the Southern New Jersey city, which is expected to be completed by 2017, will bring 500 jobs and eventually increase property tax revenue after tax abatements roll off in 10 years, Moody's analyst David Strungis said in his report. The new 250,000 square-foot facility will be the first tenant in the Gateway District, a 45-acre office park adjacent to the headquarters of the Campbell Soup Company. The move from Subaru's current headquarters in Cherry Hill, N.J. will consolidate Subaru's roughly 500 employees from offices around Camden County.
Subaru's decision to set up shop in Camden, which is unrated by Moody's, was spurred by $118 million of tax incentives approved by the New Jersey Economic Development Authority (NJEDA). The NJEDA also recently approved $260 million in tax credits for the energy company Holtec International to construct a manufacturing facility in Camden. It also provided an $82 million grant to secure a new practice facility for the National Basketball Association's Philadelphia 76ers and approved a $40 million grant for an expansion at Camden's largest employer, Cooper University Hospital.
"While it is unclear how many of the added jobs will directly benefit current Camden residents, the addition of a potential 1,700 jobs is significant for a city with just over 77,000 residents and a September 2014 labor force of about 25,700, said Strungis. "Although Camden has one of the highest crime rates in America, violent crime had fallen 21% from its 2012 level as of December 2014, and the city's financial position has similarly improved over the past two years."
Camden ended the 2013 fiscal year with a fund balance of $24 million compared to just $3.2 million in 2011, according to Moody's. The city, which is located across the Delaware River from Philadelphia, operates under New Jersey's Municipal Rehabilitation and Economic Recovery Act with state aid comprising 63% of annual revenues compared to 12% for other cities in the Garden State.