Bill To Spur Supermarket Development In Underserved Areas Awaits Governor’s Action

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TRENTON – Legislation intended to help bring supermarkets to underserved communities throughout the state has received final legislative approval and awaits action by Gov. Chris Christie.

The bill (A-4309) dedicates five percent of the sales tax generated in Urban Enterprise Zones to the New Jersey Economic Development Authority (NJEDA) for a period of five years that would be used for loans and grants to attract supermarket operators to underserved areas.

Under the bill, the NJEDA is required to use that revenue to fund the New Jersey Food Access Initiative, which currently exists, and is designed to meet the financing needs of supermarket operators that want to locate within an area where infrastructure costs and credit needs are often high and unmet by conventional financing institutions. The initiative provides below market rate loans and is modeled on the Pennsylvania Fresh Food Financing Initiative.

“Many of our cities suffer from a lack of healthy food options because there are no supermarkets in their neighborhoods,” said Assemblyman Gilbert L. “Whip” Wilson (D-Camden/Gloucester), a sponsor of the legislation. “This bill will help provide loan and grant funding to qualified supermarket operators to invest in these communities. Residents will not only benefit from fresh and healthier food choices, but job opportunities created by these new businesses opening up.”

“Many of our residents have to rely on convenience stores which rarely carry nutritious food and tend to be pricier because there are no nearby supermarkets,” said Assemblyman Angel Fuentes (D-Camden/Gloucester), another sponor. “Providing funding to entice supermarket operators to open in these neighborhoods will give these residents healthier food options, and with such high unemployment rates, create employment opportunities for residents in their own communities.”

The bill would direct the NJEDA to establish both a loan fund and a grant fund within the initiative. Under the bill, 80 percent of the revenue directed to the initiative would support the loan fund. In order to be eligible for loan funding, a business would have to be located in the state and lack access to traditional sources of financing at the rates offered by the initiative.

The remaining 20 percent of the revenue would support the grant fund. The grant fund would provide loan recipients with direct funds or interest rate subsidies in order to increase the effectiveness of the program. Proceeds from loan repayments would be reinvested in the loan and grant funds, with 80 percent of the proceeds being directed to the loan fund and 20 percent being directed to the grant fund.

The bill would require the NJEDA to use the following factors in awarding loan and grant funding under the program:

  • the need of the area where the business will be located for access to fresh food;
  • the number of jobs to be created by the project;
  • the potential for repayment of the loan; and
  • whether or not the applicant represents a sustainable business that will not require program assistance in the future.

The bill would require the NJEDA to submit a report evaluating the program’s effectiveness no less than six months prior to the end of the five year funding period.

The bill was approved 49-24-3 by the Assembly on Monday, and 24-14 by the Senate last month.


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