By Jay Cook |
RED BANK – If the federal government gives a thumb up, Red Bank’s West Side could be a hub for private investors and tax incentive programs in the near future.
Gov. Phil Murphy announced last week that 75 municipalities throughout the state met guidelines for consideration as Opportunity Zones, a program tucked into the federal Tax Cuts and Jobs Act of 2017. The recommendations – at least one from each county – were submitted to the U.S. Department of the Treasury.
The Opportunity Zones program is designed to draw private investors to low-income urban and rural areas by implementing a community development tax incentive program.
Red Bank was one of the six Monmouth County towns picked by the Murphy Administration. The program could help deliver a boost to the local business scene as the economy continues to progress a decade after the housing market crash in 2008.
Eligible Opportunity Zones are defined as areas with an individual poverty rate of at least 20 percent or a median family income up to 80 percent of the area median. Within Red Bank, the area that meets those criterion is, generally, the borough’s West Side, which is populated by lower income and minority residents.
Red Bank’s designated section is bordered by Newman Springs Road to the south between Hance Avenue and Broad Street; the Swimming River Watershed to the west; along Maple Avenue/Route 35 to the east between Broad Street and Oakland Street; and along the NJ Transit North Jersey Coast Line rail to its intersection with Oakland Street to the north.
The West Side has always had potential, said Borough Council president Ed Zipprich.
“It’s important to have stabilization in the community, especially one like Red Bank, where we have a diverse population that certainly enables us to avail ourselves of these types of federal programs,” Zipprich said of the program. “As long as it’s administered appropriately, both by the municipality and the federal government, we can make sure we keep Red Bank moving forward and keep Red Bank as Red Bank.”
Opportunity Zones are the brainchild of the Economic Innovation Group, a bipartisan organization based in Washington, D.C.
EIG found in a 2017 report that one in six Americans is living in a distressed community and six percent of a community’s jobs and establishments were lost between 2011 and 2015.
Could this program be a possible panacea for Red Bank’s West Side? Jennifer Eckhoff, managing director of the Eastern Monmouth Area Chamber of Commerce believes so, under the right circumstances.
“The businesses that come in need to be able to operate,” Eckhoff said, “but the people then who are going to frequent those businesses need to be able to afford going there.”
It’s important, she noted, to “not have the market saturated with the same kind of businesses but then also have different and growing businesses.”
EIG views those possible business opportunities coming from affordable housing, infrastructure, energy, commercial developments or simply new or expanding businesses. EIG also anticipates about $6.1 trillion in unrealized capital gains from corporations and U.S. households to be the main driving force in this program.
“If only a fraction of that $6 trillion flows into Opportunity Zones, this new provision will quickly become the largest federal community development initiative in memory,” according to EIG.
Red Bank RiverCenter shares the same opinion as EMACC. RiverCenter is the advocacy group established to oversee Red Bank’s special improvement district (SID). The area spans most of the borough’s downtown and operates on funds generated from Red Bank business owners.
A piece of the borough’s Opportunity Zone area spills over into SID territory, but RiverCenter’s executive director James Scavone said that shouldn’t concern anyone.
“Any development is going to be positive for the entire town because it makes Red Bank more appealing as a whole to other businesses and other investments,” said Scavone. “When that starts, it’s something that will just make Red Bank more appealing across the board.”
Like Eckhoff has suggested, finding the right fit is important, Scavone said.
“It is a balancing act,” he continued. “One thing that will need to be sorted out is what the right businesses are. I suspect different stakeholders and interested parties will have a differing opinion on that.”
The financial support will be applied through Opportunity Funds, a new class of investment vehicles that would aim to drive capital into distressed communities throughout the nation.
The five other Monmouth County Opportunity Zones nominated by the Governor’s Office are Asbury Park, Freehold Borough, Long Branch, Neptune City and Neptune Township.
This article was first published in the March 29-April 5, 2018 print edition of The Two River Times.
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