Pennsylvania offering more than New Jersey in bid to lure Subaru HQ

Executives for Subaru hope to decide by the end of the year whether to expand their American headquarters in Cherry Hill or relocate to one of four selected sites in South Jersey or Philadelphia. Company officials say they’ve outgrown the building they’ve occupied since 1986 and, thanks to record growth over the past five years, desperately need a work environment that meets modern standards in technology, comfort, design and efficiency.

But while Subaru flirts with the idea of moving across the bridge to The Navy Yard, political leaders from Cherry Hill and Camden County are feverishly trying to keep them – and their 500 employees — from leaving the state.

New Jersey vs. Pennsylvania

“I think I’ve had a constant dialogue with executives since I’ve taken office, and we have a very good working relationship,” says Cherry Hill Mayor Chuck Cahn. “We’ve advocated to the state to make sure they’re doing everything possible to make sure Subaru stays in Cherry Hill.”

But while Subaru spokesperson Michael McHale says he and his supervisors would ideally like to stay in the township, local New Jersey officials acknowledge that Philadelphia and Pennsylvania offer incentives that New Jersey doesn’t. Most significantly, The Navy Yard is located in a Keystone Opportunity Improvement Zone, which qualifies companies for significant tax abatements for a period of several years.

South Jersey leaders are lobbying Trenton to pass existing legislation to implement similar zones, but in the meantime they say state incentives are limited to those that reward job growth. Subaru of America says it doesn’t foresee adding any more corporate jobs in the near future.

Local incentives considered

Camden County Freeholder Lou Cappelli, who’s held frequent meetings with Subaru representatives, said the county can offer assistance in making offsite infrastructure improvements for a new facility, and Mayor Cahn says the township would almost certainly consider extending tax abatements in the form of a Payment in Lieu of Taxes (PILOT). But Cappelli argues Pennsylvania should stop trying to poach business from New Jersey in the first place.

“This kind of wrangling where Pennsylvania’s actively trying to take companies from New Jersey does nothing for the region. It doesn’t benefit anybody,” he said.

Subaru’s future HQ will be bigger

Subaru currently spreads its American corporate workforce over several Camden and Burlington county sites; McHale says the company is seeking to consolidate the two properties it owns in Cherry Hill but has no plans to move  its operations center in Pennsauken or its regional office in Westhampton. Subaru is the second biggest private employer in Camden county, after Campbell Soup Company, and brings significant prestige, tax ratables and charity work to the township.

“They’ve been here for a very, very long time. They have a lot of employees who live here, they frequent our shops and restaurants, and besides being a very good tax payer, just having the name Subaru here – it’s a marquee name,” said Mayor Cahn.

In recent years, Subaru has provided volunteers and support for nature-trail cleanups, bought leaf-collection bags and donated money for a Cherry Hill police dog. The company maintains a home in Cherry Hill for its Japanese chairman to use during visits.

If it were to move it would be responsible for paying taxes on its properties until they were to get sold, but McHale said expanding the existing primary property doesn’t look to be very feasible because of logistical and space problems. All things being equal, he thinks his employees would like to stay local.

“We’re looking to stay here. We like the people here, it’s a good working environment, and everyone would like to carry on doing their jobs.”

Mayor Cahn points out another reason – this one less tangible but perhaps more powerful – that Subaru wants to and should remain in the township.

He says, “In Japanese the word ‘cherry blossom’ means strength. The Japanese executives have related to me that they love the connotation of Cherry Hill because to them it represents success.”