RALEIGH, N.C. — Five years after getting a $40 million tax-incentive credit to stay in New Jersey for 15 years, industrial conglomerate Honeywell International Inc. is moving its headquarters from Morris Plains to Charlotte, North Carolina, the company announced Friday.
Honeywell makes core systems for military aircraft, space satellites and automated office buildings. Its extensive product line also includes fishing line, chemicals used in the oil industry and a process that turns vegetable oils into diesel fuel.
A longtime major employer in Morris County, the company agreed to remain in New Jersey in 2013 after then-Gov. Chris Christie brokered a $40 million tax-credit incentive for the company from the New Jersey Economic Development Authority’s Legacy Grow New Jersey Assistance program.
Those incentives originally were approved to support Honeywell’s proposal for a $100 million redevelopment of its Morris Township property, which included a townhome development on a portion of its 146-acre campus.
But when the company experienced delays in obtaining zoning approvals for its redevelopment, it opted out of Morris Township, announced it was moving to Morris Plains and subsequently obtained reapproval of the tax credits.
The tax credits were to be spread out over 10 years and required the company to stay for 15 years.
“We are in the 4th year of a 10-year GROWNJ agreement,” Honeywell spokeswoman Victoria Ann Streitfeld said. “Under the terms of this agreement, we can qualify for incentives each year based on how many people we employ in New Jersey. We are committed to the terms of GROWNJ and will continue to comply with the agreement.”
As part of the move, about 150 to 200 New Jersey-based senior management positions and about 100 South Carolina-based positions will relocate to Charlotte between now and September 2019.
Approximately 1,000 Honeywell employees will remain in New Jersey across the company’s six locations in the state, including about 800 employees at Honeywell’s offices in Morris Plains.
“There was no up-front GROWNJ payment to Honeywell,” Streitfeld said. “Awards are made based on employment each year. We have a longstanding presence here and we value our relationship with the state.”
NJEDA spokesperson Virginia Pellerin said Honeywell was approved up to $40 million in tax credits in March 2013 to remain in Morris Township and retain 1,061 jobs.
Created by statute in 2012, the GROWNJ program was available to businesses creating or retaining a minimum 100 jobs in New Jersey and making a qualified capital investment of at least $20 million at a qualified business facility.
Honeywell certified completion and received a total of $8 million in tax credits for jobs reported in 2015 and 2016, Pellerin said.
“As with all projects, the EDA will continue to monitor the company’s performance against their obligations under the program on an annual basis, she said. “The EDA will evaluate the impact of today’s news on the Grow award.”
Companies must maintain 80 percent of certified jobs at the program-qualified business facility and 80 percent of the company’s statewide workforce, Pellerin said. Annual credits are subject to forfeiture and recapture if the company defaults on the deal.
Honeywell envisions gradually adding about 500 corporate and SPS positions to the Charlotte location over the next five years, bringing total employment there to about 750 by the end of 2024.
“Today’s announcement reflects our commitment to locate our corporate headquarters close to our large centers in Charlotte alongside Safety and Productivity Solutions, and Atlanta, where our Honeywell Building Technologies and Honeywell Connected Enterprise businesses are located,” Honeywell Chairman and CEO Darius Adamczyk, said. “Charlotte is a top-10 destination city in the U.S. that will readily enable us to recruit and retain the world-class talent we will need over the long term to support Honeywell’s strategic focus on leading technology and software solutions within our end markets.”
“Our decision does not reflect any issues with the quality of our experience in New Jersey,” Adamczyk added. “We value the strong relationship that we have built with the state of New Jersey and with Governor Murphy. New Jersey will remain a substantial employment center for us.”
“As part of Honeywell’s global restructuring, the company has committed to keeping the vast majority of its existing New Jersey workforce in state,” Phil Murphy said. “Though we’re never happy when any jobs leave our state, we appreciate their continued commitment and confidence in New Jersey.”
“My community is losing at least 750 good jobs,” said Sen. Joseph Pennacchio (R-26), who represents Morris Plains in Trenton. “New Jersey has a location that is second to none. We have a highly-educated and eager workforce. What we lack is leadership in the executive branch. It’s time for the governor to stop taxing and regulating businesses out of state.”
“I put forward a strong economic plan that will put us ahead of the curve as present and future corporate decisions are planned, and I look forward to working with all stakeholders to see it implemented,” Murphy said.
“I would love to have all of them still here, but at least we have 800 jobs still here,” said Morris Plains Mayor Frank Druetzler, a longtime friend of Christie who helped lure Honeywell to the tiny borough of 5,500 people.
North Carolina lawmakers hurried through legislation this week that more than doubles the per-job annual cap on tax breaks to $16,000 in a move to attract corporations that move high-paying jobs to North Carolina.
Honeywell is No. 77 on the Fortune 500 list of the largest U.S.-based companies. Charlotte is already home to Bank of America, No. 24 on the Fortune list, and Duke Energy, No. 125.
The Associated Press contributed to this story.
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