Newark is on the path to operate the state’s first land bank – a new incentive that local governments can use to revitalize abandoned properties that blight their neighborhoods.
The nonprofit Invest Newark, formerly called the Newark Community Economic Development Corp., will act as the Brick City’s land bank organization.
A state law Gov. Phil Murphy signed in July would allow organizations such as Invest Newark, or local government bodies, to act as “land banks” and acquire abandoned and vacant properties and revitalize them into sites that benefit the neighborhood, be it housing or businesses.
Bernel Hall, president and chief executive officer of Invest Newark – and no stranger to finance, banking and investment – told NJBIZ that he envisions the land bank will help boost homeownership in the city, where 78 percent of the residents are renters.
“We’d like to create business expansion opportunities, via public land and properties… that neighborhood economic progress will serve to boost Newark’s employment opportunities as well as create bigger business platforms outside of downtown Newark,” Hall added.
Businesses that come into local neighborhoods might also provide services and amenities that residents need, such as youth and senior community centers, Hall said.
We’d like to create business expansion opportunities, via public land and properties… that neighborhood economic progress will serve to boost Newark’s employment opportunities as well as create bigger business platforms outside of downtown Newark.
– Bernel Hall, president and CEO, Invest Newark
The land bank will help attract some of the dollars and investment away from downtown Newark, which already has $5 billion in developments in the pipeline, and push it toward the neighborhoods Hall is targeting.
“Get out in the neighborhood and develop, and do so via joint ventures with the demographics,” he said.
But most of the ink is still wet on the paper, and both Invest Newark and local officials will have to hash out which properties are transferred to the nonprofit. Nonetheless, Hall said he is optimistic, nay excited.
A limited pilot on homeownership for Section 8 renters and owners could roll out in as soon as 90 days, he said, and funding would come from the city, as well as financial institutions and local and nationwide philanthropic organizations.
“It’s going to be a huge lift for Newark to be able to capitalize on the vacant lands and bring some type of transformation for those lots within neighborhoods,” Newark Department of Economic and Housing Development Director Allison Ladd told NJBIZ in July.
The majority of abandoned and vacant properties are foreclosed one and two-family homes – and there are upwards of 1,500 properties that the city might consider, according to Newark Alliance President and CEO Aisha Glover, who was the previous head of NCEDC.
“Homeownership, it’s so closely tied to the land bank,” Glover said, and the hope is “to ensure that folk in the city will have access to these homes.”
Newark Alliance recently secured funding from Wells Fargo to help with assisting local residents to finance their home purchase in the city.
“That is one piece of a much broader strategy… everything right down to ‘okay, who’s working on these homes and who’s building these homes and how do we create more minority developers and how do we put them on the scale where they can be working on more downtown projects’,” she added.
City and local economic development officials have been wary of the potential gentrification side-effects that come with redevelopment and neighborhood revitalization. To that end, they are also eyeing more equitable development with the federal opportunity zones with dot Newark.
An October 2018 “Newark Forward” study recommended the city employ the land bank strategy similar to Detroit’s style of redevelopment.
The Detroit Land Bank Authority lists homes and other properties in the Michigan city, for sale on its website. All told, there are roughly 170 land banks nationwide, the oldest stretching back 20 years, Hall said.