In July 2021, Governor Phil Murphy signed a new law, which revises provisions of the New Jersey Economic Recovery Act of 2020, of January 7, 2021, and other previously enacted economic development programs – including the Food Desert Relief Program (“Program”).
A “food desert” is defined as a community where access to affordable healthy food options, like fruits and veggies, is limited because traditional grocery stores are too far away. In food desert communities, 30 percent of the population is at least a mile away from a supermarket (“Stores”) or any place where they can buy fresh food. One of these areas, for example, is Salem City in Salem County, New Jersey where the population is 5,000 and the number of supermarkets is zero.
The Program assists the food desert e communities in New Jersey by providing up to $40 million per year in tax credits, loans, grants, and technical assistance to increase access to nutritious foods and to develop new approaches to alleviate food deserts. The New Jersey Economic Development Authority (“NJEDA”) will identify up to 50 food desert communities in coordination with the Departments of Community Affairs and Agriculture and award tax credits to incentivize businesses to establish and retain new Stores in food desert communities. The technical assistance offered will represent best practices for increasing the accessibility of nutritious foods as well as provide grants and loans for food retailers of certain sizes to fund equipment costs associated with providing fresh food.
Eligibility
To receive credits through the Food Desert Relief Program, Stores must:
- Be a retail outlet with at least 16,000 square feet where 90 percent of space is occupied by food and related products.
- Be the first or second Store in a designated food desert community.
- Be commitedt to accepting benefits from federal nutrition assistance programs, including SNAP and WIC.
The Program will also make grants and loans for equipment, technology costs, and initiatives to midsize food retailers that are 2,500 to 16,000 square feet, and small food retailers less than 2,500 square feet.
Award Size
Developers will be eligible to receive tax credits up to 40 percent of the total project cost for the first Stores in a food desert community and up to 20 percent for second Stores.
Owners of Stores will be eligible to receive tax credits up to 100 percent of initial operating costs for the first Stores and up to 50 percent of the initial operating costs for the second within the first three years after opening the first.
Food Desert Relief Program Update
The NJEDA may update the program to consider various additional factors when making award determinations. The definition of “small-food retailer” is expanded to include non-traditional retailers such as mobile vendors and farmers’ markets. In addition, the NJEDA can award grants to other eligible entities to support initiatives to strengthen the food security of residents in food desert communities.
Please feel free to contact SobelCo for more information.
