The newly unveiled opportunity zones – part of the 2017 federal tax cuts – could be a massive boom for cities such as Newark, but they are to be done in a way that they do not gentrify the city and push out longtime residents, Newark Mayor Ras Baraka said Tuesday.
Newark Mayor Ras Baraka speaks at the 2019 Forbes Opportunity Zones Summit in Newark. – DANIEL J. MUNOZ
“This whole concept of equitable development is constantly something that mayors have been struggling with all over the nation,” Baraka said at the Forbes Opportunity Zone Summit in Newark on Tuesday.
“This is not something that is germane to Newark,” he added.
The city has, according to many New Jersey-level officials, as well as Essex County, Newark and business officials, undergone an economic renaissance in the past decade.
But the ensuing scenario is all too familiar: Long-time economically depressed or working class cities such as Brooklyn and Harlem soon become gentrified by outside investors and developers, forcing out decades-long residents and local businesses by the rapidly inflating cost of living.
Opportunity zones allow investors to shield their capital gains – money they make off their investments – from federal taxes if they invest the money into low-income communities and keep them there for a decade to help boost local businesses, housing stock, educational opportunities, and arts and culture.
New Jersey has 169 such zones, at least one in all 21 counties, spanning suburban, urban and rural neighborhoods across the state.
Gov. Phil Murphy, a Democrat, has included opportunity zones as part of his economic master plan for the state, which he said will help New Jersey reclaim the title of the “State of Innovation,” and would replace the controversial mutli-billion dollar Grow New Jersey tax breaks that expire in July.
“In downtown Newark, at the core of very exciting development, the developers who own a lot of the land in this district are very open to working with the mayor and the city council to take this opportunity zone opening and not just do an opportunity zone fund that would benefit a developer and investor, but rather use it as a catalyst to transform the entire city,” Baraka said.
Tim Sullivan, head of the Economic Development Authority, agreed – an approach of “rewarding those who I think the governor’s phrase is ‘have thought and stayed through difficult times’.”
The idea, Sullivan said, is to allow towns and cities the chance to “say ‘we want to decide for ourselves what we think is the right development path in a given site or a given neighborhood, meaning we think this parcel would be great for a supermarket or great for affordable housing or great for a bowling alley.”
“As opposed to having an investor coming and saying ‘hey good news for you, we got a good idea for you, good news Mr. Mayor, we have a hot idea for you,” Sullivan continued.
