By a 3-2 vote, the New Jersey Senate Economic Growth Committee cleared bill S846, which would extend the State’s Urban Enterprise Zone (UEZ) program by ten years, and add new zones, which will affect some 6,800 businesses in 37 municipalities across the State. This extension is expected to be voted upon by the full Assembly and Senate within the upcoming months.

The purpose of the UEZ is to stimulate economic growth in zones throughout the State that have significant populations and low median incomes. Businesses in these zones receive a range of benefits most notably, a 50% reduction in the sales tax rate, to a 3.3% sales tax rate on retail purchases.

As Lakewood meets the criteria, UEZ was brought to our Township in 1994, in large part due to the Lakewood Vaad’s efforts alongside our State legislators and municipal elected officials. Through the years as the UEZ status came up for renewal, the Vaad took a lead in advocating for the benefits of the program for Lakewood and the state.

The Lakewood UEZ area includes most of the commercial/retail areas including Route 9, the downtown, Cedarbridge Avenue until the GSP entrance, and Industrial Park. Virtually all the businesses in the zone are UEZ members.

In addition to the reduced sales tax, UEZ businesses receive a host of other benefits that empower them to succeed. Benefits include tax exemptions for acquisition of qualified equipment, property and/or expansions; tax credits for new employee hires; corporate tax credits for investments in zone; low
interest loans; unemployment insurance subsidies; and tax exemptions for electricity and gas for qualifying manufacturing businesses.

This program has helped local entrepreneurs travel the road to success, bringing tens of millions of dollars in sales to Lakewood. Those sales have ripples throughout Lakewood and the broader region, stimulating the local economy and boosting our region’s competitiveness. Countless jobs and much needed nonresidential tax ratables (which pay full property tax but receive minimal taxpayer funded services) are here today as a result.

Additional benefits for the entire regional population result from the fact that much of the revenue of the sales tax that the State does collect is returned to Lakewood Township for local economic development use.

These funds have been used for police salaries, municipal services provided in the zone, and also for low interest small business loans, advertising grants, business mentoring and networking events. For example, many downtown businesses received rehab grants to help improve their store facades, which helped those businesses. Following Hurricane Sandy, many Lakewood small businesses received emergency long-term low interest loans, keeping them and their employees afloat despite a temporary sales slump.

Although the Democratic controlled legislature has approved UEZ extensions in previous years, former Governor Chris Christie had vetoed it. This has led some of the zones to lapse, or, as in the case of Lakewood, be at risk of lapsing in the foreseeable future. Should the legislature – as expected – approve the extension, and Governor Murphy would sign it, residents and businesses in all UEZ zones will be able to rely upon the program’s economic benefits for at least another decade.

The Lakewood Vaad has been working overtime to ensure that the UEZ continues. Should the program end, the local sales tax in the zone would immediately double. One can only imagine the negative impact this would have on every consumer who shops on Clifton Ave, on Route 9, or anywhere along Kennedy Blvd., County Line Road and Cedarbridge Avenues – not to mention the effects on business owners and employees.

The Vaad has reached out to key legislators urging them to vote for the legislation. The Vaad is also actively working to ensure that Governor Phil Murphy will support and sign the legislation as well. The Governor has as of yet remained noncommittal on UEZ, and has previously expressed his preference for broad based – rather than targeted – incentives.

Still, The Vaad is hopeful that the Governor will recognize the UEZ’s effectiveness and sign the legislation. “Governor Murphy has made it a top priority to increase economic opportunity for New Jerseyans at the bottom or middle of the economic ladder,” says Rabbi Moshe Zev Weisberg, Vaad spokesman, and member of the Board of Trustees at the Lakewood Development Corporation (LDC), which administers the local UEZ program. “We will continue to communicate to the Governor the real life benefits we see from Lakewood UEZ, and will work tirelessly to earn his support.”

Businesses interested in participation in Lakewood UEZ benefits can contact David Klein at the Lakewood Development Corp. at 848.222.6341 or [email protected]. For low-interest micro-loans please contact Alex (Shia) Lowinger of the LCSC at 732-901-6001 ext. 209 or [email protected].

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