The New Jersey Economic Development Authority (NJEDA) Board approved proposed rules April 12 for the $240 million Food Desert Relief Tax Credit Program in addition to the sale of up to $50 million in tax credits.

The Food Desert Relief Tax Credit Program aims to help address food access challenges by attracting and retaining new supermarkets in the 50 Food Desert Communities (FDCs) designated by the NJEDA, which span all 21 counties in New Jersey and are home to over 1.5 million residents.

To be eligible, stores must be located within the boundaries of NJEDA-designated FDCs. Applicants must demonstrate that the supermarket will remain open for business for at least seven years and must commit that it will accept federal benefits such as the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program from Women, Infants, and Children (WIC). Supermarkets must also devote at least 10% of retail space to fresh and/or frozen fruits and vegetables and host a community listening sessions in the FDC at least once a year.

The program establishes two incentives, which NJEDA says encourages resiliency of supermarkets:

• The Financing Gap Tax Credit, providing up to 40% of project’s costs for development of the first new supermarket located in any one FDC, and up to 20% for a second new supermarket.
• The Initial Operating Cost Tax Credit, available to supermarket operators to help fill a shortfall in initial operating income.

The proceeds of the tax credit sale approved by the NJEDA board will fund grant, loan and technical assistance programs under the Food Desert Relief Act (FDRA), which was established by the New Jersey Economic Recovery Act (ERA) of 2020 and signed into law in January 2021. The programs will support costs associated with equipment and technology to make nutritious foods more accessible and affordable as well as other initiatives to ensure food security for residents in the FDCs.

The FDRA allocates $40 million per year for six years, totaling $240 million, in tax credits.

The program is also part of NJEDA’s broader portfolio focused on food security, including the Food Security Planning Grant, Sustain & Serve NJ, and Food Retail Innovation in Delivery Grant (FRIDG).

“Food insecurity is a widespread and longstanding issue that has been exacerbated by the pandemic, and New Jersey is taking innovative steps to ensure no resident goes hungry,” said Gov. Phil Murphy in a press release. “By expanding grocery options in an intentional manner, more families across our state’s food desert communities will be able to put affordable and healthy food on their tables.”

NJEDA Chief Executive Officer Tim Sullivan said they are committed to fighting food insecurity and that this program will help bring new grocery options to food deserts across the state.

“Under Gov. Murphy’s leadership and in partnership with Speaker Craig Coughlin and the Legislature, New Jersey is working to ensure nutritious foods are accessible and affordable in every community, and this program will further advance the ERA’s goals of fighting food insecurity, creating jobs, and uplifting neighborhoods,” said Sullivan.

Assembly Speaker Coughlin, D-19th District, said he is thrilled to see this effort move forward.

“This program will help those communities build and sustain healthy, affordable options and grow local business. This is good health and economic policy, in addition to meeting our moral obligations,” said Coughlin. “This is among my proudest moments in public life. Fighting hunger and food insecurity in our state has been close to my heart for decades. I thank all the partners who have worked together to make this program a reality.”

Tara Colton, NJEDA executive vice president for economic security, said that supermarkets in food deserts will help ensure every resident has access to groceries regardless of their address and income.

“Furthermore, the sale of tax credits will expand NJEDA’s toolkit to eliminate barriers to nutritious foods by creating innovative programs that will improve the lives of families, kids, and seniors – empowering the transformation of entire communities,” said Colton.

More information on the program can be found here.