A full-time employee dedicated solely to startups, with an emphasis on those founded by women and minorities … a business navigator who will connect small business owners to support services … a willingness to defer or even waive certain taxes and fees … a goal of becoming the first city to offer free (or low-cost) broadband.
Newark Mayor Ras Baraka announced his ambitious two-year economic recovery plan Thursday — a program that mixes equitable community development with plenty of aid and assistance for small business.
The plan, which will have a budget of $8.8 million for its first year, is being funded by money the city received from the American Rescue Plan legislation.
Baraka said he feels his program will give the city a much-needed jump-start — and a chance to return to where the city was, pre-pandemic.
“After this incredibly challenging year of mourning, loss and economic uncertainty, we have turned the corner,” he said. “We are fortunate to have a historic level of investment from the federal government that provides the kind of support our small businesses and residents need.
“Before the pandemic, Newark was experiencing a period of rapid investment and economic expansion, guided by our principles of equitable growth. This plan resumes that progress. It will bring customers back, build on Newark’s growing reputation as an exciting place to invest and grow good jobs with economic mobility for Newarkers.”
It should be noted that Baraka’s optimism comes in the face of difficult data.
The pandemic has had a devastating impact on Newark’s residents and small business owners. Businesses that are minority-owned, immigrant-owned, locally owned, and women-owned have been particularly hard hit.
Between February and May 2020, 16,000 residents lost jobs, bringing Newark’s unemployment to 19%. As of May 2021, Newark’s unemployment still remains almost double than the national average, at 10.7%.
Job losses in Newark have been concentrated in four sectors: hospitality, health care/social services, retail and “other services,” which represent 60% of all jobs lost. These job losses have resulted in $60 million to $100 million of lost consumer spending that would otherwise have gone to Newark businesses, even after factoring in government benefits. Sectors with high concentrations of small businesses will take the longest to recover.
Allison Ladd, deputy mayor of economic and housing development, said the city feels the plan meets the challenge.
“Over the past several months, I’ve heard from small business owners, our strong network of Business Improvement Districts and Special Improvement Districts, and numerous other partners about their vision for an equitable economic recovery,” she said. “This plan closely reflects those conversations. I look forward to delivering the bright future that this plan promises for a more vibrant, prosperous Newark.”
Invest Newark CEO Bernel Hall agreed.
“These economic recovery initiatives will address the current needs of Newark’s business and development community through a grassroots approach that fosters inclusivity and local innovation,” he said.
City officials feel the two-year recovery plan puts good jobs, equitable development, the growth of small businesses and investment in Newark’s neighborhoods at the center. They say it sets out bold initiatives, which will address the economic stress experienced by many households as a result of the pandemic and Newark’s racial wealth gap, so that the city will be a place where all residents can thrive.
The Economic Recovery Plan is the first of a package of recovery initiatives that Baraka will be launching over the next eight weeks, including:
- Expanded emergency rental assistance;
- Expanded small business emergency assistance;
- Five-year affordable housing goals;
- A portal of available affordable housing;
- “Back Together Again,” a series of community solidarity events;
- Additional neighborhood redevelopment designations;
- NewarkGo, a low-cost transportation pilot using dockless bikes and e-scooters.
The plan was developed in collaboration with Bloomberg Associates, a pro-bono philanthropic consultancy that works with cities and mayors around the world. It builds on ideas from the Newark Equitable Growth Commission, the Newark Forward recommendations, national best practices and the work done through the Reopening and Recovery Strikeforce and other economic development strategies.
Gordon Innes of Bloomberg Associates said his group supports the initiative.
“This recovery plan will shorten the period Newark will take to get back on its feet,” he said. “It’s both ambitious and feasible. We commend Mayor Baraka on his leadership, collaborative approach and bold vision. This plan is a model for cities large and small across the country, and we look forward to continuing to support the city of Newark by bringing this plan to action.”
Here’s a closer look at the two parts of the plan that directly address the business community.
- Support high-growth startups, including support for women and minority founders.
- The city will hire a dedicated FTE focused on growing and supporting Newark’s startup/ tech cluster;
- The city will appoint a startup ambassador, a leading Newark entrepreneur who is committed to elevating Newark as a great city for entrepreneurs to live and start a business.
- Launch sector initiatives to attract and grow good jobs.
- Economic and Housing Development will partner with the Newark Alliance to develop and implement strategies to attract and grow businesses in the following sectors: (1) transportation, distribution and logistics; (2) manufacturing/food processing; (3) technology; (4) corporate and regional offices; and (5) health care;
- The city will hire a business development manager(s) to create sector strategies;
- The city will align with existing workforce/apprenticeship programs to ensure Newarkers are connected to job connected to job opportunities in each sector.
- Create Newark business navigators, small business technical assistance and launch virtual small business hub.
- The city will hire Newark Business Navigators as a central point of contact to rapidly connect Newark small businesses to support services;
- The city will fund technical assistance at local economic development partners to help small businesses reopen and recover;
- The city will launch a virtual small business hub that brings together all support services available to Newark small businesses into one easy-to-navigate website.
- Launch Small Business Grant Fund Round 4; Launch Creative Catalyst Fund Round 3.
- The city will leverage American Rescue Plan and philanthropic funding to launch Round 4 of the Small Business Grant Fund;
- The city will collaborate with Invest Newark to provide technical assistance, education, certification and procurement opportunities;
- Arts and Cultural Affairs will launch Round 3 of the Creative Catalyst Fund, the city-sponsored grant program for Newark-based artists, creative entrepreneurs and nonprofit cultural organizations.
- Increase broadband access for local businesses.
- Newark will set the goal of being the first city in the country to offer free or low-cost broadband access to all small businesses and will work with Invest Newark to expand Newark Fiber to all five wards.
- Reduce the cost of doing business in Newark.
- The city will reduce small business costs by deferring fees/business taxes, waiving code compliance penalties/fees and developing a utility assistance program on sewer and water bills.