NJ EDA Initiatives Related to Governor Murphy’s Economic Plan
“The State of Innovation: Building a Stronger and Fairer Economy in New Jersey”
In early October 2018, Governor Murphy released his new economic plan entitled “The State of Innovation: Building a Stronger and Fairer Economy in New Jersey.” This plan looks to achieve five key goals by 2025:
- Driving faster job growth over this period than all Northeast peer states by fostering a better, more supportive business climate;
- Achieving faster median wage growth than all Northeast peer states;
- Creating the most diverse innovation ecosystem in the nation and doubling venture capital investment in the state;
- Closing the racial and gender wage and employment gaps; and
- Encouraging thriving and inclusive New Jersey urban centers and downtowns, with a focus on reducing poverty.
Achieving these goals will be accomplished by focusing on four strategic priorities:
- Investing in people to help all New Jersey residents prepare for and find work that supports and sustains families and investments in our future;
- Investing in communities to build world-class cities, towns, and infrastructure statewide;
- Making New Jersey the State of Innovation to harness the power of innovation to create more and better jobs across the state; and
- Making government work better to improve New Jersey’s competitiveness and business climate.
With these goals and priorities in mind, the Governor is working with the New Jersey Economic Development Authority (EDA) to put his plan into action. The following updates from the EDA Press Room reflect the activities in the works:
- Launched the 21st Century Redevelopment Program to help communities revive under- utilized properties. This program will provide planning grants for communities to develop solutions for repurposing local vacant or underutilized commercial and retail properties as part of the commitment to “Invest in Communities.” The 21st Century program will launch as a pilot round of up to $250,000 in funding available in the form of planning grants of up to $50,000 per recipient. Communities can apply for funding through the 21st Century Redevelopment Program to support ideas that focus on a number of elements including:
- Determining cost benefits of retrofitting, redeveloping or reengineering a property or properties;
- Driving economic growth for the facility and region;
- Creating greater social, economic and environmental sustainability
- Expanding affordable and multifamily housing;
- Attracting employers and a diverse, talented workforce;
- Expanding entrepreneurial opportunities and supporting local businesses;
- Promoting walkable neighborhoods and improving accessibility and mobility
- Connecting to public transportation; and
- Improving livability and healthy outcomes for local population.
- Through the Innovation Challenge, launched a second round of funding which will be made available for communities for the development of economic development plans to augment their local innovation ecosystems. This announcement supports “Investment in Communities” and “Making New Jersey the State of Innovation” – both pillars of Governor Murphy’s economic development plan. Through the second round of the Innovation Challenge, up to $500,000 will be available in the form of grants of up to $100,000 each for plans that may focus on several key areas including, but not limited to:
- Increasing opportunities to grow or expand clusters of dynamic companies;
- Encouraging the growth and expansion of incubators and other innovations-supportive real estate spaces;
- Providing STEM training and connections to careers; and
- Building a culture of entrepreneurship.
Applications for both the 21st Century Redevelopment Program and the second round of the Innovation Challenge are expected to be available beginning in November 2018.
The first round of the Innovation Challenge concluded this past summer granting $100,000 each to the City of Bridgeton, the City of New Brunswick, Passaic County, the City of Trenton, Atlantic County, the City of Atlantic City, Camden County, Township of Union and Monmouth County for their planning proposals.
- The proposal of the New Jersey Innovation Evergreen Fund (NJIEF), which proposes to invest a total of approximately $500 million in capital into promising startups with the potential to scale up and create jobs. The NJIEF would raise approximately $250 million in capital by competitively auctioning new state tax credits to New Jersey corporations who want to participate in the innovation economy. The Fund would then invest the auction proceeds, alongside at least $250 million in funds from venture capital firms, into qualifying startups. Details will be finalized through the legislative process.
- The approval of the Access Program, a new small business loan available through the EDA. This $15 million program will provide increased access to capital for small businesses to scale their operations in New Jersey. The EDA will launch Access as a 12-month pilot program that will provide financing to small businesses in New Jersey – either in the form of direct loans or through participations or guarantees of a loan through one of EDA’s 26 Premier Lender Partners. The pilot program will allow the EDA to gauge the program’s effectiveness as well as evaluate market feedback. Basic eligibility requirements for both categories of loans include:
- The business has been in operation for at least two full years;
- The average historical and global debt service over the past two years is at least 1.25x; and
- The FICO score for 50% of the personal guarantors must be at least 700.
- Participation in the Incubator and Collaborative Workspace Rent Initiative (ICWRI) where, through the EDA, new start-ups will be assisted with rent at incubators, accelerators and other collaborative workspaces. The EDA will make an initial investment of $500,000 in the program and will provide grants for two, four, or six months of rent payments, with the workspace committing to subsidize half that amount. For a start-up, there is a maximum benefit of $15,000. In addition, the EDA will provide up to three months of bonus support if the collaborative workspace is (1) recently established, (2) in an Opportunity Zone census tract, or (3) affiliated with a hospital system or New Jersey University (one month for each category).
The EDA has been active in its initiatives to move forward with the new economic plan. For more information and to keep up to date with the activities of the EDA, visit their press room at https://www.njeda.com/Press-Room. A complete copy of Governor Murphy’s economic plan is available at https://www.njeda.com/pdfs/StrongerAndFairerNewJerseyEconomyReport.aspx.