Editor: Please describe the scope of the Economic Development Authority’s activity. What is the authority granted the agency by New Jersey’s legislature? To whom do you report?
Brown: The New Jersey Economic Development Authority (EDA) was established in 1974 as an independent state agency in, but not of, the New Jersey Department of the Treasury. As such, we report to an independent board of directors. Our mission is to strengthen our state’s economy by financing small and mid-size businesses, administrating tax incentive programs to both retain and grow jobs in the state, revitalizing communities through redevelopment initiatives and supporting entreprenurual development by providing access to training, mentoring and seed financing programs.
In response to state policies, economic trends and marketplace needs, we assist the Administration with the development of new programs and adapt existing ones to benefit our core business markets and industry sectors.
Editor: While your office oversees many activities leading to economic growth, your focus this year has had a great deal to do with helping the state recover from Sandy. Please tell us about some of the initiatives you have taken.
Brown: Our state’s business economy was among the hardest hit by Superstorm Sandy. As a result, Governor Christie made economic recovery and revitalization a top priority of New Jersey’s Community Development Block Grant (CDBG) Disaster Recovery Action Plan. This plan was approved by the U.S. Department of Housing and Urban Development (HUD) at the end of April, which paved the way for our state to receive its initial $1.83 billion dollars in federal CDBG funding to rebuild damaged housing, infrastructure and businesses. The governor called on the EDA to administer $450 million dollars of the first disbursement of CDBG funding to support our storm-impacted businesses and communities. As part of that effort, we are launching a series of Stronger New Jersey Business programs. The $25 million Stronger Than the Storm marketing and advertising campaign launched in April is a comprehensive effort to drive tourism from both within and outside of New Jersey and to encourage shore visitors to shop local, supporting our businesses and the communities in which they operate. This campaign includes television advertising, radio, billboards, social media as well as an extensive public relations component focused on media outreach to broadcast our invitation loud and clear to visit the New Jersey shore this summer.
Editor: One offshoot of the plan is the Stronger New Jersey Business Grant program in the amount of $260 million. What businesses are eligible to receive this grant money? What are the sizes of the grants?
Brown: The $260 million Stronger New Jersey Business Grant Program launched on May 1 of this year and offers grants of up to $50,000 dollars for businesses and non-profits that sustained at least $5,000 dollars in storm-related physical damage. We are asking that applications from interested businesses be filed with us by October 31 of this year. Businesses can use this grant funding as working capital or to purchase inventory, equipment or make renovations, or they can use it for new construction. This is direct funding to small businesses.
Editor: What other financial aid programs are available under this program?
Brown: Our second direct business financing program is our $100 million Stronger New Jersey Business Loan Program. That program will launch July 1 of this year. It will offer direct low-cost loans of up to $5 million to businesses and nonprofits that suffered physical damage from the storm, as well as to businesses that are looking to expand within our storm-impacted areas. Loans of up to $5 million dollars per entity will support both working capital needs and construction/renovation needs for these businesses. The maximum amount of the loan a business can get from this program for working capital is $1/2 million dollars, and the largest loan a business can get for business construction is $5 million dollars.
Editor: Please tell us about the fourth prong of the program.
Brown: The fourth prong is the Stronger New Jersey Neighborhood and Community Revitalization Program, to which we have dedicated $75 million. We will launch that program later this summer. It will provide funding to help communities with public facility improvements such as streetscape, lighting, sidewalks. We are providing business-assisting initiatives such as micro loans for storm damage and loan guarantees for loan loss reserves and for façade and code related improvements, and other improvements that can be done on a neighborhood or a business district level.
Editor: How does New Jersey’s Business Grant Program interface with FEMA’s recovery program and that of the SBA?
Brown: CDBG Disaster Recovery funds are intended to address unmet needs and are meant to be funding of last resort. Businesses must have applied to and received a declination or approval for an SBA disaster loan if the SBA program is still open. The SBA deadline for Physical Damage loans was May 1, 2013. The SBA deadline for Economic Injury loans is July 31, 2013. If a business still has a pending or withdrawn application with SBA, it will need to wait for a determination before submitting their application to EDA. If a business has been approved for an SBA disaster loan, it may be eligible for EDA funding, if there is still a gap in need.
Editor Who is eligible for the Stronger New Jersey Business Loan Program. How do recipients of loans differ from those receiving grants?
Brown: The program is available to New Jersey-based small businesses or non-profits that 1) sustained a minimum of $5,000 in physical damage from Superstorm Sandy; or 2) are positively impacting the economy of their community through either capital investment or the creation or retention of jobs. Businesses located outside the nine most impacted counties of Atlantic, Bergen Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union, as defined by HUD, must meet the $5,000 damage/loss requirement.
Editor: What other financial resources are available to aid in the state’s recovery?
Brown: In addition to those we have discussed, New Jersey First Lady Mary Pat Christie has started the Hurricane Sandy New Jersey Relief Fund to raise funds and resources to help New Jersey families impacted by the storm. Grants are also available to impacted homeowners through the Department of Community Affair’s “reNew Jersey Stronger” housing assistance initiative.
Editor: In the economic growth column are some other initiatives that will spur growth in the state. One is the recently launched Angel Investor Tax Credit. Please tell us about the rationale behind the launch of this program.
Brown: Governor Christie signed the Angel Investor Tax Credit Act into law in January of this year to spur job creation and growth in our next generation of emerging high-tech, high-wage industries. The program demonstrates our continuing focus on nurturing New Jersey’s early-stage technology businesses and will help to strengthen our competitive edge, incentivize significant private investment in our most promising companies and create jobs of the 21st century.
Editor Has Governor Christie’s two percent limitation on property tax increases made a difference in bringing new business into the state?
Brown: Since taking office, Governor Christie has not only limited property tax increases across the state, but he has chosen a new direction for New Jersey overall – lowering taxes, reducing bureaucracy, and restructuring government so that the state is a place where businesses can thrive.
The governor listened to the needs and challenges of the business community and he has responded accordingly. When he delivered his budget address this year, he announced that we will provide an additional $213.5 million dollars in business tax relief that translates to $540 million dollars in the third year of job-creating business tax cuts to help business remain and grow in New Jersey. This includes a phased-in single sales factor corporate tax formula, a 25-percent reduction in the minimum tax for S-Corporations, and business income, loss netting and loss carry forward relief to promote a fairer tax code. The two percent limitation on property tax increases has just made it a better place for employers who are thinking about whether to move to New Jersey or whether to stay in New Jersey, knowing that their own property tax will not continue to grow at an extraordinary pace. We think as a result of these actions, New Jersey has been redefined in the marketplace.
Editor: Please mention what your office is doing to attract new business and industry to New Jersey.
Brown: A centerpiece of Governor Christie’s administration’s economic agenda was the creation of the New Jersey Partnership for Action, led by Lieutenant Governor Kim Guadagno. The Partnershipis a four-pronged public/private approach to economic development that includes: the Business Action Center, reporting directly to the lieutenant governor and providing the business community with a single point of contact, applying a proactive, customer-service approach to businesses’ interactions with state government; the Secretary of Higher Education, who coordinates, plans, develops policies, and advocates for the state's higher education system; Choose New Jersey, a privately funded marketing and lead generation organization that markets the state as an ideal business location; and, the EDA, serving as the state’s financing arm. Through financing and competitive business incentives, the EDA encourages business expansion, economic growth and job creation. Last year alone we finalized nearly $700 million dollars in financing assistance, business incentives and tax credits. This will leverage more than $1.4 billion dollars of private investment in our economy, generate more than 4,800 new permanent jobs, over 3,000 construction jobs, and retain more than 10,900 jobs that were at risk of leaving our state. We are really proud of our record of accomplishment, and this year we look forward to doing more and to helping literally hundreds of businesses get back on their feet after Superstorm Sandy. We are going to have a very productive year.