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Millennial hiring bumps up Camden jobs after years of huge tax breaks. Will it endure?

Camden's business community is hiring hundreds of new employees as the local economy picks up. But the surge is fueled by tax breaks and may not be sustainable.

January 14, 2017 — (L to R) Founders of Waterfront Ventures Johnathan Grzybowski and Khai Tran speak with attendee Zave Smith, co-founder of Xhilarate design firm in Philadelphia, during the Up Conference at Waterfront Ventures’ offices in Camden, NJ.  Avi Steinhardt / For the Philadelphia Inquirer
January 14, 2017 — (L to R) Founders of Waterfront Ventures Johnathan Grzybowski and Khai Tran speak with attendee Zave Smith, co-founder of Xhilarate design firm in Philadelphia, during the Up Conference at Waterfront Ventures’ offices in Camden, NJ. Avi Steinhardt / For the Philadelphia InquirerRead moreAri Steinberg

Camden's business community is hiring hundreds of young employees as the local economy picks up. The growth raises hopes and questions in about equal measure. Is the surge sustainable, and will millennials continue moving to and working in Camden on the hip of Philly?

Among the hopeful signs is Penji, which offers unlimited graphic design at a flat monthly rate. It is looking to hire at least 100 more Rutgers graduates by the end of 2019, and "is becoming more active in the Philly tech scene. The company is a model of how businesses can incorporate social impact and community consciousness into their business model," said Melissa Le, office manager for Waterfront Lab, a Camden coworking site that launched in April 2017.

The job increase in Camden has been years in the making, and was recently aided by the IRS, which included Camden among a list of federally designated Opportunity Zones, created by the Tax Cuts and Jobs Act to spur investment in low-income communities. That follows decades of state subsidies and massive tax breaks to get companies to relocate to the city.

Camden Mayor Francisco "Frank" Moran welcomes new firms while recommitting to the old ones: "Our foundational businesses such as Campbell Soup, Cooper University Hospital, Lourdes, and Camden Iron and Metal, to name a few, have never given up on Camden and we will never stop working with them," he said. Brandywine Realty Trust, Liberty Property Trust, the Philadelphia 76ers, Holtec, NFI Industries, and Benjamin Foods are among businesses large and small moving into Camden, thanks in part to hefty tax incentives. An estimated $2 billion has been invested in the city over the last five years, Moran added.

In addition, start-ups such as Penji are hiring students and younger residents, including Hopeworks 'N Camden graduate Sekinah Brodie and Rutgers Camden graduate Naciye Cakir. Brodie was introduced to Penji by Hopeworks, a nonprofit teaching Camden youth technology and professional skills.

"I'm so thankful to Hopeworks for helping me get my career started and introducing me to Penji. I love the team, culture, and the opportunity to explore a career as a creative in the heart of Camden," Brodie said.

"I never thought I would find an opportunity to do what I love every day right here in Camden," said Cakir. "As a Camden student, I am so fortunate to be a part of a wonderful team of creative people, who love giving back."

Penji cofounders and Rutgers Camden alums Khai Tran and Johnathan Grzybowski wanted to build a community-conscious business. Tran, who is also CEO of Waterfront Ventures, an economic development group attracting start-ups and businesses to Camden, said, "hiring in and from Camden is a top priority for us. We believe one of the best ways to revitalize the city is to keep talent in the city."

On the other hand, some traditional manufacturing businesses are having trouble hiring, training, and retraining young workers in Camden, particularly those aged 18 to 25, squarely in the millennial demographic.

Michael Amato, cofounder and CEO of Camden Yards Steel, employs 43 people at two locations, most of them in Camden. Amato estimates that out of 100 temporary employees who might cycle through his training program, four or five end up staying on as permanent hires, despite generous pay, 100 percent health care coverage, and retirement benefits.

He's mystified as to why it's so hard to attract and retain young hires. Camden Yards is a family-owned company, founded in 2001. The company produces hot and cold rolled carbon steel, coated steel products, and custom pre-painted coil and sheets, located within the South Jersey Port along the Delaware River, at 2500 Broadway in Camden.

"It is the most difficult part of my job. The idea of a day's work is different [from] when I was their age. They don't view their job as a necessity. That's probably the biggest difference. It's easy to go find other work or collect unemployment. It's very difficult to incent to respect their job. We pay very well here, and pay 100 percent health insurance. We have 401(k)s," Amato said.

Once Camden Yards hires a temporary worker, that person must work 450 hours before being moved onto payroll as a full-time employee.

"A lot of them don't make it to 450 hours. We call them 'shooting stars.' They come out of the gate and then at 21 days, they don't show up or they're late," Amato said. He'd like to hire more younger workers to be trained by his older employees, some of whom have been with Camden Yards for decades.

Other companies are seeking workers, too, such as Webimax (hiring 100 workers), American Water Works (an additional 100 workers), EMR (285 jobs), and Resintech (170 jobs), said spokesman Dan Keashen of the mayor's office. As a result of medical school students, recent undergraduates, and other millennials staying in Camden, Maria Yglesias, a local real estate developer, says the downtown is benefiting from the growth of nearby Philadelphia in much "the same way that Newark is profiting from New York City."

Yglesias, a partner in M&M Investments LLC, a developer in downtown Camden, said: "Younger families and a wave of medical school students want to purchase houses in the city. It's practical to have a place while they're in school, it's cheaper to own than to rent. At the same time, they started seeing it as an economic opportunity. Eventually, the house will be worth more money."

Camden's crop of start-ups and Rutgers-Camden enrollment are helping: The student body is estimated to grow from just more than 7,000 to 8,500 in the next two years.

But the question remains whether former Gov. Chris Christie's enormous tax breaks for established companies will produce sustainable job growth: Subaru headquarters' costs are offset by $118 million in state tax breaks, part of $1 billion-plus in incentives awarded to Camden projects by the state Economic Development Authority. Gov. Murphy has a bill ready for signature that would restore the ability to charge a lower sales tax  in "urban enterprise zones" including Camden, through 2023.

Stephen Danley, professor at Rutgers-Camden, and a Camden resident, points out that "it cost $80,000 in tax breaks to bring each of those jobs here. The Camden metro region leads the country in job growth. That's fantastic news, but in the context of regional and national growth, it may have come at the expense of significant tax revenue." Such are the trade-offs of the policies that have been pursued, he noted. "I'm skeptical it will continue over the long term."

Meanwhile, young people continue driving the hiring conversation in Camden, and not just white millennials, but those of color, who Danley pointed out "are returning to Camden and buying houses, building equity."

"Millennials are money-wise," developer Yglesias said. "Boomers, we were fools. We wanted to have it all right now, and bigger and better. And millennials aren't like that. They want quality of life, more time, and they don't want to work themselves into the grave. They don't need 7,000-square-foot homes. They have student loans. That shapes the way they look at the world."

In the real estate pipeline is 11 Cooper, a $48 million residential development of 156 rental homes, which just broke ground on the Camden waterfront. It's the first new construction market-rate apartment building on Camden's waterfront in 15 years. CP Residential, which owns 11 Cooper, is a partnership of the Michaels Organization, NFI, and Conner Strong & Buckelew, led by South Jersey political boss George Norcross. The three firms are moving their headquarters to the Camden Waterfront in an office tower that is under construction near the apartments.

But as Danley, 33, and a millennial himself, points out, much of the new corporate construction "includes two parking garages and an internal cafeteria. That doesn't speak to what millennials want. They don't drive, they want walkable, bikeable urban cities. And developers should be sponsoring restaurants and other small businesses in these new buildings rather than keeping their employees housed inside the corporate fence. Otherwise, it's a missed opportunity."