The New Jersey Economic Development Authority (NJEDA) announced that it has issued a Request for Information (RFI) to better understand the challenges faced by minority- and women-owned developer enterprises (“MWDE”) in New Jersey in accessing capital, particularly businesses that are engaged in the development of residential and commercial real estate. Governor Phil Murphy and the NJEDA are exploring a diverse developer fund to help grow existing MWDEs by addressing barriers to capital. The Governor’s proposed Fiscal Year 2023 budget invests $65 million in new real estate initiatives, including $20 million to capitalize a fund to support projects led by developers of color. The RFI can be found at https://www.njeda.com/bidding/#rfi.
The NJEDA is specifically interested in receiving comments, questions, recommendations, facts, information, ideas, and responses that will help the Authority better understand the scope and variables related to access to capital and other forms of financing available to underserved real estate developers.
According to a Black Enterprise article citing Bank of America’s Black Business Owner Spotlight, 82 percent of entrepreneurs of color say they must work harder compared to their non-diverse peers. Another study found almost 60 percent of women entrepreneurs say they do not have the same access to capital as their male counterparts.
“New Jersey is among the most diverse states in the country and the resources we offer to developers and business owners must reflect that diversity,” said Lt. Governor Sheila Oliver, who serves as Commissioner of the Department of Community Affairs. “Over the past four years, we have established numerous programs that help make New Jersey a national model for inclusive and sustainable economic development. Feedback we receive through this RFI will help us continue to strengthen our commitment to small businesses statewide.”
Supporting small business and enhancing access to capital for minority- and women-owned business enterprises (MWBE) are central pillars of Governor Murphy’s comprehensive Economic Development Plan, The State of Innovation, Building a Stronger and Fairer Economy in New Jersey. Two of the five explicit goals of the plan are “Closing the racial and gender wage gaps” and “Encouraging thriving and inclusive New Jersey urban centers and downtowns, with a focus on reducing poverty.”
“Capital is essential for any business owner or developer looking to launch or scale operations, maintain cash flow or cover operating costs,” said NJEDA Chief Executive Officer Tim Sullivan. “Developing programs to support developers who often find themselves unable to access funding is paramount to our efforts of creating the stronger, fairer and more equitable New Jersey economy that Governor Murphy champions.”
The NJEDA is seeking information and ideas from qualified entities, including but not limited to MWDEs, Community Development Finance Institutions, community development lending units of medium and large banks, other mission-based lenders, community development organizations that work closely with MWDEs, state and local government entities, and other stakeholders with perspectives on structural barriers and disparities encountered by real estate developers owned by minorities and/or women in terms of access to capital. The NJEDA also seeks interest and ideas on solutions to address those obstacles, including but not limited to, existing programs that address the disparities in financing available for residential and commercial development.
“This RFI is an important vehicle in helping us break down the systemic barriers that often keep MWDEs from accessing the capital they need to succeed,” said NJEDA Chief Diversity and Inclusion Officer Michelle Bodden. “We encourage stakeholders statewide to send us input to help us create a program that closes the racial and gender disparities that have existed for far too long.”
The African American Chamber of Commerce of New Jersey (AACCNJ) and the Statewide Hispanic Chamber of Commerce of New Jersey (SHCCNJ) both welcomed the news of the RFI as an important step in connecting diverse developers with access to capital.
“We applaud the Murphy Administration for their intentionality in the establishment of a Diverse Developer Fund. By doing so it will enable black businesses to leverage resources that will enable them to bring their plans and ideas to fruition in a meaningful way,” said AACCNJ Founder, President & CEO John E. Harmon, Sr., IOM. “Moreover, if New Jersey stays committed to this type of strategy, it will chip away over time at the systematic economic disparities that persist and improve the competitiveness of our state.”
“The New Jersey census data revealed that the Hispanic community accounted for 21.6 percent of the state’s population in 2020, likely approaching a number closer to 25 percent with underreporting and changes from 2020 to 2022,” said Carlos Medina, SHCCNJ President & CEO. “Recognizing Hispanics’ vital role statewide, the Statewide Hispanic Chamber of Commerce of NJ supports any approach to knocking down barriers to equity in accessing capital, which is the number one challenge that the 120,000 NJ Hispanic-owned businesses powering the state’s economy face.”
All questions concerning this RFI must be submitted in writing no later than Friday, May 6, 2022, via e-mail to: MWDE-BarriersRFI@njeda.com. The subject line of the e-mail should state: “QUESTIONS-2022 RFI-DI-141 – MWDE RE BARRIERS.” Answers to questions submitted will be publicly posted on the Authority’s website under the RFIs section, on or about Friday, May 13, 2022.
All RFI responses must be submitted in writing no later than 11:59 PM EST, on Friday, May 27, 2022 via e-mail to: MWDE-BarriersRFI@njeda.com. The subject line of the e-mail should state: “RFI Response-2022-RFI-DI-141 – MWDE DEVELOPER BARRIERS.”
The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.