A Gem for New Jersey Neighborhood Revitalization
Posted by William E. Best on March 25, 2016
'A dollar and a dream,' was the phrase I read in a brochure about the starting point for revitalizing neighborhoods through the Neighborhood Revitalization Tax Credit (NRTC) program, a unique economic development tool created by the State of New Jersey. While I agree there must be a starting point, its important to know that the idea for the NRTC program involved collaboration long before there were dollars.
Designed by the Housing and Community Development Network of New Jersey (HCDNNJ), the NRTC program was authorized by the Legislature in 2002 and is administered by the state’s Department of Community Affairs (DCA). This economic development tool was created to attract private investment in New Jersey’s distressed neighborhoods and to foster ongoing partnerships between private corporations and community-based development organizations.
The program encourages the private sector to invest in neighborhood revitalization projects by offering a 100 percent tax credit to participating businesses that contribute to participating nonprofits that have neighborhood revitalization plans approved by the state’s Department of Community Affairs (DCA).
Fourteen years in, NRTC's role as an engine for accelerating economic development is apparent. An example is Interfaith Neighbors in Asbury Park, New Jersey, which received funding through the NRTC program back when the tax benefit was at 50 percent, as well as in the latest process of investors now receiving 100 percent of the tax credit. Interfaith Neighbors’ significant impact in this Jersey Shore community includes job opportunities for local residents, a business development center, affordable housing, a neighborhood restaurant, and the planned Asbury JAMS (Jobs, Arts, Music, Science), a multi-use anchor building for site planning, architectural design and engineering studies. And there are many more of these high capacity organizations playing a critical role in driving economic development in New Jersey.
A total of $10 million per year is available in state tax credits to businesses that participate in the program, and any approved project may qualify for up to $1 million in tax credit investments per year. DCA manages an investment pool and disburses funds to the agency’s approved organizations. Participating nonprofit organizations must use at least 60 percent of the funds for activities related to housing and economic development. The remaining balance may then be used for complementary activities including small business assistance, physical improvements, and social services such as job training, childcare, and transportation.
In 2004, PNC was the first corporation to make a commitment to the NRTC Program, and while this was at the time when investments received a 50 percent tax credit, PNC decided to invest for several reasons:
1. It makes good business sense to invest in revitalizing neighborhoods where we do business.
2. The bank is always looking for ways to participate in economic development opportunities in our service areas and the NRTC is a great tool to leverage our investments.
3. It’s important that our communities and our customers trust us to “do the right thing” where we do business.
4. We receive a tax credit.
Several years later, over 25 corporations have invested more than $70 million in the NRTC program, and its become a powerful tool for leveraging critical resources. There is so much interest now that the program is over-subscribed annually. What’s creating this interest and excitement? Success. The program drives significant impact through equity and leveraged investments; in fact, a recent HCDNNJ report noted that for every dollar invested, the NRTC program has leveraged $7.30.
But the time has come to challenge ourselves to take NRTC to the next level. No doubt, the NRTC is a great government program, and many private corporations have answered the call and stepped up to the plate. While this public-private partnership has promoted economic growth in some underserved areas, the new challenge is one of leadership and public policy.
It’s thrilling, and heartening, to see that so many corporations having stepped up to the plate, supporting New Jersey’s neighborhoods and working strategically with community development organizations through NRTC. It is a great government program.
The time has come to challenge ourselves to take NRTC to the next level, bringing in more partners and expanding its reach to more areas—with more dollars. But to do this, the NRTC needs a public sector champion. It needs someone who will carry the proverbial torch for our communities and cultivate strong ties with the private sector. And right now, we don’t have one. This vacuum of leadership affects all of New Jersey, and in a vacuum, windows of opportunity eventually close.
If we had more partnerships aligned with more stakeholders, how many more dreams could be realized, rather than deferred?
(Photo credit: bianca polak, via flickr, CC BY-NC 2.0 & Rendering of Asbury JAMS facility courtesy of Interfaith Neighbors)
About the author more »
William Best joined PNC Bank in September 2003 as senior vice president and Northeast market manager of Community Development Banking, and is responsible for the bank’s commitment to the growth and prosperity of the low to moderate income segments and its communities, including community and economic development corporations, small businesses and women and minority-owned enterprises in Northern and Central New Jersey and Northeast Pennsylvania. He is former executive director of the New Jersey Redevelopment Authority, a state-financing agency that invests financial and technical resources into redevelopment projects in New Jersey’s urban neighborhoods. Under his leadership, the agency leveraged over $1.3 billion in economic development.