State lists 50 communities eligible for food desert tax breaks

Daniel J. Munoz//January 4, 2022//

State lists 50 communities eligible for food desert tax breaks

Daniel J. Munoz//January 4, 2022//

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New Jersey officials issued a draft list of 50 communities across the Garden State that qualify as “food deserts” where businesses can receive subsidies for building grocery stores and other places to sell healthy foods.

The program is formally titled the Food Desert Relief Act, under which the state sets aside $40 million a year for six years in tax credits, loans, grants and other technical assistance to support these kinds of businesses in some of New Jersey’s most impoverished communities. Other state incentive programs have been employed in past years to bring grocery stores to Atlantic City, Camden and New Brunswick, with varying degrees of success.

According to the New Jersey Economic Development Authority, which runs the program, the goal is to “increase access to nutritious foods and develop new approaches to alleviate food deserts” by encouraging the construction and development of supermarkets and grocery stores.

Food deserts are generally defined as neighborhoods where residents, often lacking transportation options, have no access to grocery stores where they can purchase healthy, fresh and nutritious foods, and instead rely on fast food, convenience stores and bodegas. The U.S. Department of Agriculture classifies food deserts as low-income census tracts that are more than 1 mile from a grocery store in urban and suburban settings, or 10 miles in rural settings. About 800,000 New Jerseyans “face hunger every day,” according to the nonprofit Community Food Bank of New Jersey.

“We are proud to unveil a robust definition of a Food Desert Community that is both reflective of the unique context of New Jersey and supportive of the hundreds of thousands of individuals affected by hunger every day,” NJEDA Chief Executive Officer Tim Sullivan said in a statement.

Lawmakers and state officials bundled the $240 million of economic subsidies into the $14.5 billion Economic Recovery Act of 2020, which includes state support for businesses moving into New Jersey or expanding their presence, redevelopment efforts, environmental clean-up, historic restoration and preservation, offshore energy and film, television and media productions.

Under this state subsidy, taxpayers would cover up to 40% of the project costs for a first supermarket or grocery store in a food desert – be it through grants, tax credits or loans – and up to 20% for the second such establishment.

The food deserts include neighborhoods in urban areas such as Camden, Newark, Atlantic City, Jersey City, New Brunswick, Bayonne, Asbury Park, Paterson, Perth Amboy, Irvington, East Orange, Trenton, Vineland and Passaic.

More rural and less densely populated parts of the state are also eligible, such as High Bridge, Montague Township, Dover, Bound Brook, Millville, Salem City and Lakewood. State officials are planning to hold several virtual listening sessions this month for the 50 communities.

Lt. Gov. Sheila Oliver
Lt. Gov. Sheila Oliver – AARON HOUSTON

“By crafting one of the most comprehensive food desert designations in the country, we are leading the nation in taking necessary steps to eradicate food deserts and remove the barriers keeping our state’s residents from accessing nutritious food,”  Lt. Gov. Sheila Oliver.

Oliver also serves as commissioner of the state Department of Community Affairs, another agency involved with the relief program.

The NJEDA also operates the Sustain and Serve program, under which the state essentially pays restaurants to prepare meals for the state’s neediest residents. Sullivan estimated that the state has awarded $45 million to nonprofits across the state to purchase the equivalent of 4.5 million meals from over 400 restaurants struggling because of the pandemic.

In November, state and local officials broke ground on what will be the first supermarket in Atlantic City in 15 years, which should open in 12 to 14 months. The Casino Reinvestment Development Authority – a state agency in South Jersey – is putting up $18.75 million of its own funds, while the city is allowing the store’s operators to pay just $1 a year in property taxes.

On the other side of the state in Camden, state officials have tried for years to bring in a grocery store. According to a Politico New Jersey report from 2019, there were several promising contenders, but a little-known provision in the tax break law at the time was crafted to favor one proposed supermarket over another, and neither went forward. Camden’s largest grocery store – the Price Rite Supermarket – abruptly closed last June.

In New Brunswick, officials went through two separate grocery stores in the past decade that both closed, and were both situated at the ground floor of the sprawling Wellness Plaza adjacent to the city’s train station. State officials pumped in $24.7 million in state subsidies under the Urban Transit Hub Tax credit program, plus tens of millions of dollars more in federal tax credits and bonds.