In an effort to increase the number of projects undertaken by developers of color, Gov. Phil Murphy will announce a proposal to create a $20 million Diverse Developer Fund during his budget address Tuesday afternoon.
The parameters of fund are still being conceived — and ultimately would be fleshed out by the New Jersey Economic Development Authority after consulting with developers.
The goal, however, is clear: The state wants to increase access to capital for developers of color, whether it be by grants exclusively or in combination with low-interest loans.
New Jersey officials said the program is not intended for some of the megaprojects being built around the state, but, rather, smaller, community-based projects that often prove more difficult to fund.
The benefits would be twofold:
- Minority developers would have more opportunities to produce work that ultimately could lead to bigger projects;
- Neighborhood projects that otherwise would not have a way to be financed would get done, improving municipalities across the state.
The initial funding is relatively small, but it is something state officials could quickly increase should the program begin showing its potential benefits.
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There is potential for the New Jersey Redevelopment Authority, under the director of Leslie Anderson, to have a large role, too.
John Harmon, the founder and CEO of the African American Chamber of Commerce of New Jersey, said he heard only bits and pieces about the program — but that he liked what he was hearing.
“I need more details, but the spirit of what I’m hearing is very encouraging,” he said. “It gets to what we’ve been asking for, for a while: more access to capital and support.”
Harmon offer a vote of support for both the EDA and the NJRA.
“Having the EDA, whose heart always has been in the right place, and the NJRA not only on the front lines — but providing them with resources they need to get down to the baseline level of business would be something,” he said. “This could be transformational if the state is really committed to it.”