On July 16, 2019, the New Jersey Economic Development Authority (NJEDA) launched the Opportunity Zone Challenge Program, a competitive grant program aimed at supporting community revitalization efforts to attract investments in Opportunity Zones.
Grants awarded through the program will fund municipal and county-level financial and technical planning around Opportunity Zone economic development.
“New Jersey’s Opportunity Zones have the potential to transform struggling communities that investors have overlooked for years into thriving centers of employment, economic growth, and development,” said Lieutenant Governor Sheila Oliver, who also serves as Commissioner of the Department of Community Affairs (DCA). “The Opportunity Zone Challenge Program is a key component of Governor Murphy’s plan to empower municipal and county governments with the resources and tools they need to attract the right investors to their communities.”
The Opportunity Zone program is a federal incentive for investors to re-invest unrealized capital gains into dedicated Opportunity Funds. Capital in these Funds must be invested in Opportunity Zone businesses or real estate projects for a fixed period of time in order for investors to access the full tax benefit. New Jersey contains 169 Opportunity Zones, which span 75 municipalities across all 21 counties.
While the Opportunity Zone program was designed to focus capital flows and economic investment into communities that have historically faced economic challenges, long-term investment scarcity and strained local governments have made it difficult for many of the communities most in need to develop and capitalize critical projects. The Opportunity Zone Challenge Program is designed to address this problem by encouraging communities to develop specific plans to guide their pursuit of Opportunity Zone-based investments.
“The Federal Opportunity Zone program is a unique tool that communities can use to drive long-term, transformative investment in the most underserved areas of our state, and the NJEDA is committed to helping municipalities and counties benefit from the opportunities it provides,” said NJEDA Chief Executive Officer Tim Sullivan. “The Opportunity Zone Challenge Program will jumpstart community-led revitalization in these areas by providing the resources communities need to catalyze investment in their Opportunity Zones.”
To achieve this goal, the Opportunity Zone Challenge Program will award five grants of up to $100,000 each—for a total of $500,000—to select municipal or county governments or municipal partnerships of two to five New Jersey municipalities whose applications demonstrate a clear strategic plan to build investment capacity in their Opportunity Zones.
The Challenge is open to all 75 New Jersey municipalities and 21 counties that contain either the whole or part of an Opportunity Zone census tract. As part of the grant application, applicants must prepare a proposal that includes steps they will take to attract Opportunity Zone investments. Some examples include: preparing a financial or marketing prospectus to showcase an Opportunity Zone’s benefits to investors; engaging in feasibility planning for Opportunity Zone-focused development; or considering zoning, code, and regulatory reforms to streamline the approvals process in Opportunity Zones. Proposals must include specific deliverables that can be fully completed within six calendar months of the date the NJEDA and the recipient execute a grant agreement. As part of the application, applicants must also designate at least one strategic partner whose external expertise they will use to best achieve the Challenge’s goals.
The final plans that are developed using the Opportunity Zone Challenge grant funding are expected to be detailed strategic plans that will guide a community’s approach for attracting Opportunity Zone investments. With the benefit of these plans being completed, local government entities will be better positioned to implement their strategies based on the community’s unique needs and vision for long-term, socially responsible growth.
“The federal Opportunity Zone program is a chance for communities that have been overlooked to finally attract the types of investments they need to unlock their full potentials,” said Leslie A. Anderson, President and CEO of the New Jersey Redevelopment Authority.
“The Opportunity Zone Challenge Program is important because it will not only incentivize these communities to take a proactive approach to attracting investments through the Opportunity Zone program, but it will also provide the resources they need to execute their plans,” she concluded.
The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.
Featured photo (by Storm Cunningham) shows the public docks at Cape May, New Jersey.