Changing the Labels of Newark

The following blog post is part of the City Accelerator initiative, a collaboration between Governing, the Citi Foundation and Living Cities that aims to speed the adoption of innovative local government projects within and across cities that will have a significant impact on the lives of their residents, especially those with low incomes.

 
Dangerous. Dirty. Crime-ridden. Struggling. Scary. Abandoned.

These are all labels that residents of other New Jersey cities and towns use to describe Newark. Since the 1967 rebellion following the police beating of arrested cab driver John Smith, the city has not been able to shake the stigma of burnt-out buildings, empty storefronts, and a pervasive sense of apathy and neglect. 

But this “tough town” is turning around. Public and private actors alike are coming together to fill commercial vacancies and drive local business and job growth. Entrepreneurs large and small are gearing up for Newark’s comeback, bolstered by the city making Amazon’s “short list” of sites for HQ2. And now, on behalf of Mayor Ras Baraka and the City of Newark, the Newark Community Economic Development Corporation (NCEDC), in collaboration with Governing and Living Cities, and supported by Citi Foundation, has engaged in the 12-month City Accelerator to level up economic opportunities for entrepreneurs of color. City Accelerator and other work of NCEDC is a direct outcome of Hire. Buy. Live. Newark, the city’s unprecedented cross-sector partnership between the business community, municipal government, higher education and healthcare institutions, clergy, philanthropies and workforce development programs to reduce poverty and unemployment and strengthen the city's economy by the start of 2020.

NCEDC’s goal is to grow Newark’s middle class via neighborhood-based business expansion, blight removal and homeownership opportunities, as well as by fostering the growth of minority and women-owned business enterprises (MWBE) and disadvantaged business enterprises (DBE). To that end, we are:

1. Supporting Newark-based entrepreneurs and those wanting to locate here with technical assistance to grow their businesses and revenue streams, along with the city’s tax collection, while creating sustainable jobs for Newarkers through programs such as the inaugural Newark Tech Bootcamp, contractor development institutes, MWBE/DBE certification shut-ins and capital literacy trainings with our lending partners;
2. Establishing parity and shared standards of excellence across all Business Improvement Districts (BID) and Special Improvement Districts (SID) in the city;
3. Converting at least three Newark-based small businesses to an employee-ownership structure, such as a coop or ESOP, by the end of 2020; and
4. Supporting retail start-ups that want to locate in Newark with temporary space and technical assistance to catalyze their growth and eventual expansion into permanent retail space in the city.

Together with our partners in City Hall and at the Newark Alliance, NCEDC is moving the needle -- and the rest of the country is starting to take notice. In 2018, Mayor Baraka received the Small Business Advocate Award from the U.S. Conference of Mayors and Partner America. In his acceptance speech, the Mayor noted that the award served as “recognition that we are on the right track, that we recognize the central role of small businesses in transforming Newark, and that our creative initiatives will contribute to defining the course of our nation.” 

With that in mind, NCEDC continues to innovate around ways to further our support of local entrepreneurs in line with the Mayor’s vision for Newark’s economic success.

Accelerating racial equity and economic inclusion
Mayor Baraka’s business development policy centers on comprehensive prosperity and equitable growth. To foster an inclusive economic ecosystem, NCEDC is looking to be more aggressive in supporting entrepreneurs of color without being too prescriptive. First, we are increasing connectivity throughout the city via Newark Fiber with the goal of expanding educational and economic opportunities to bridge the digital divide. Next, we are ensuring that Newark’s minority and woman-owned businesses are certified with all applicable government agencies so that they can leverage such status in public procurement processes. As part of the City Accelerator and in partnership with Rutgers University Business School, NCEDC has created the “MWBE Certification Shut-In” – a quarterly one-day convening that brings together hundreds of small businesses with 15 partners to certify these entities for local, county, state and federal contracts. With more MWBEs and DBEs licensed, certified and bonded, NCEDC is eliminating the traditional excuses of large companies that say there are not enough qualified MWBEs/DBEs to meet and exceed their diversity procurement targets.

Letting local businesses play the lead role
Along with becoming certified and bonded, MWBEs and DBEs are being brought to the front of conversations on business expansions and the $4 billion real estate development pipeline here in Newark. The businesses must be informed, legitimized and capitalized - plain and simple. As such, NCEDC is leveraging the City Accelerator to revamp its entire website and launch a business portal that will promote MWBEs and DBEs. The portal will also connect these entrepreneurs of color to contracting opportunities, via requests for proposals (RFPs) and other bids and solicitations, with large anchor institutions – both private and government – including Prudential Financial, PSEG and the Port Authority of New York and New Jersey. NCEDC is also looking to drive more touch points between our MWBE/DBE businesses and major decision-makers via networking events with CEOs and other executives from top Newark-based businesses like Panasonic and Audible.

Leveraging existing assets
Newark is uniquely positioned to drive forward development and opportunities for businesses of color within its existing real estate portfolio. The passing of a state ordinance in July 2019 paved the way for Newark to become the first city in the State of New Jersey to create a land bank to reduce blight and return more than 2,000 abandoned and vacant properties to productive use and the municipal tax roll.

With the support of Interface Studio, a Philadelphia-based planning and urban design practice, NCEDC has identified hundreds of vacant and abandoned lots in both municipal and private ownership. We are currently in the process of instituting a land bank entity to take control of these distressed assets and facilitate faster, purposeful dispositions for a myriad of end uses, including first-time homeownership for native Newarkers and local business development and expansion. There is also a unique opportunity for small, neighborhood-based developers, general contractors and other real estate-oriented companies to partner with larger entities in joint-venture (JV) opportunities to formulate a development track record by revitalizing their own neighborhoods, employing locally and building inter-generational wealth for themselves and their families. In creating this mix of development opportunities in currently blighted areas of the city, NCEDC looks to drastically increase equitable growth among our 300,000 residents.

Investing in new opportunities
With the passing of the national Opportunity Zone (OZ) legislation, Newark is poised to leverage this new funding vehicle to support a broad array of projects across the city.  In particular, NCEDC intends to target this patient capital towards neighborhoods beyond the downtown that historically have not been afforded these types of investments. With 13 Opportunity Zones across Newark, NCEDC will create a fund to blend OZ capital with Low Income Housing Tax Credits (LIHTC), New Market Tax Credits (NMTC), Historic Tax Credits (HTC) and other financial vehicles to boost investment in the outer wards. Following 50 years of continuous disinvestment, this strategy aims to stimulate economic growth from the outside so that residents and business owners alike can experience Newark’s renaissance across all neighborhoods.

Considering all of these multifaceted efforts, NCEDC and our partners are working to change Newark’s narrative and the labels that the public assigns to our Renaissance City. As we certify and label our small businesses as “MWBEs” and “DBEs,” we are keenly focused on making sure that our entrepreneurs of color are informed, legitimized and capitalized so that at the end of the day, their most prominent label is “winner.”