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More Cash Coming to Help Eliminate New Jersey's Food Deserts

Beth Fitzgerald | January 4, 2012

The NJ Food Access Initiative now has nearly $20 million in its coffers, and legislative assistance could also be in the offing.

The struggle to eliminate New Jersey's food deserts -- urban neighborhoods where fresh fruit and vegetables are scare and obesity and diabetes are correspondingly common -- is getting critical assistance from two sources.

First, the state Economic Development Authority's New Jersey Food Access Initiative has gotten a loan and a grant from the Robert Wood Johnson Foundation. Second, legislation is before the Assembly that could divert funds from Urban Enterprise Zones to the EDA initiative.

The funding from RWJ was secured by The Reinvestment Fund. It consists of a $10 million loan and $2 million grant, bringing to $18 million the amount TRF has raised thus far.

The Reinvestment Fund is a Philadelphia-based nonprofit community development organization that has helped finance charter schools and supermarkets in underserved areas. It primarily funds projects in Pennsylvania, New Jersey, Maryland, and Delaware.

Patricia Smith, TRF's senior policy advisor said "We feel we have enough [funds] in hand to do a big public launch" of the program to finance new supermarkets in New Jersey.

Later this month TRF plans a presentation to the New Jersey Food Council, the trade group for food retailers, to outline opportunities for supermarkets to work with it to open stores in underserved areas -- mostly in and around cities that lack supermarkets selling fresh fruit, vegetables, fish, poultry, and meat. The EDA initiative, through RTF, provides low-interest loans and grants to encourage projects in urban areas where development costs tend to be higher and profits lower than in suburban markets.

"We're having early conversations with [supermarket] operators who are looking to either expand or build stores in Vineland, Newark, and Camden," Smith said. It is too early to identify these interested parties, "but these are operators with strong track records, and we feel confident that in a matter of two or three months we will have projects that are ready to move."

TRF's first project in New Jersey, funded in part by a $2 million loan from the nonprofit Living Cities, was the new Wakefern Food Corp. distribution center, which broke ground in Newark in August 2011 and will distribute food to ShopRite stores in the Northeast. In 2009 TRF received its initial $4 million seed loan from the state EDA.

Further funding for the EDA's Food Access Initiative could also come via legislation sponsored by state Sen. Donald Norcross (D-Camden/Gloucester). The bill proposes redirecting 5 percent of sales tax revenue collected in Urban Enterprise Zones to the EDA for its supermarket development effort. The measure passed the full Senate and goes before the Assembly Budget Committee on Thursday.

Gov. Chris Christie this year used the UEZ sales tax proceeds to help plug the state's yawning budget deficit. Norcross said he is proposing using $5 million in UEZ tax revenue a year, or $25 million over five years, that would be 80 percent revolving loans and 20 percent grants to develop supermarkets.

Norcross is optimistic his bill will pass the legislature during the lame duck session that ends January 9, and he is hoping Christie will sign it. "I have not spoken to the governor on this, but our understanding is that he is looking at it. There is certainly some convincing that has to go on but he has not sent the message that he is going to veto it." Christie's press office did not respond to a request for comment; Christie has generally declined to comment on bills until they reach his desk.

Norcross said most Camden residents lack convenient access to supermarkets "and this has been talked about for literally 25 years. So the fact of the matter is that private industry isn't filling the need, so we need some additional incentives and that is what this bill will do."

Norcross said it's no coincidence that Camden suffers from both a shortage of supermarkets and "some of the highest rates of diabetes" in the state. Campbell Soup Co. is headquartered in Camden, and a major initiative of the company's charitable foundation is to reduce childhood obesity in the city.

"Campbell Soup has invested some of their money to try to teach healthy habits to the families who live in Camden, but if they don't have access to the food, it's sort of a lost cause," Norcross said. "You are seeing private corporations invest in this, and that's what we are hoping to convince the governor: it's not just the state, but foundations and private money are also helping."

In 2009, The Food Trust, a nonprofit also based in Philadelphia, studied the New Jersey supermarket landscape. Funded by the Robert Wood Johnson Foundation and the EDA, the study's report, "Food for Every Child: The Need for More Supermarkets in New Jersey" concluded that the state has 25 percent fewer supermarkets per capita than the national average. Camden and Trenton would have to triple their number of supermarkets to adequately serve their residents, and Vineland, New Brunswick, and Newark also suffer supermarket deficits, according to the report.

Jasmine Hall Ratliff, program officer at the Princeton-based Robert Wood Johnson Foundation, said the foundation supports research by The Food Trust with the goal of helping New Jersey replicate Pennsylvania's success at bringing supermarkets to underserved areas. She said in a few weeks the trust will release a second report, with detailed recommendations on how New Jersey can address its supermarket shortage. "We hope that in addition to the support we have given to The Reinvestment Fund, [the report] will spur additional support from other sources.”

Smith said research by TRF has found that those more than 1 million New Jerseyans live in areas with limited access to full-service supermarkets, and 74 percent of residents who have limited supermarket access also live in low- or moderate-income areas.

The Food Trust report said, "The lack of access to supermarkets in lower-income neighborhoods negatively impacts people's ability to access nutritious food" and cited studies that "demonstrate that the incidence of obesity is disproportionately high in those same lower-income neighborhoods. Obesity rates are over 35 percent higher for those earning less than $15,000 [a year] when compared to those earning $50,000 or above in New Jersey."

The New Jersey Food Council supports the Norcross bill. Michael DeLoreto, director of government affairs for the council, said providing incentives to supermarkets "would help grow the [supermarket] industry, provide jobs in areas that tend to have higher rates of unemployment, and provide nutritious food to individuals who right now lack access to it."

TRF brings to New Jersey a track record for developing supermarkets in underserved areas in Pennsylvania. TRF helped lead the Pennsylvania Fresh Food Financing Initiative, which began in 2004 and has so far provided $74 million in loans and $11 million in grants to finance 80 supermarket projects. Smith said about a third are new stores, while most of the rest have been expansions and upgrades of existing stores. "We found that the ability to provide both grants and loans really helped jump start a number of projects," she said. "There was a need for grant dollars to overcome some unique expenses," like higher development costs in urban areas.

Jeffrey Brown is chief executive office of Brown's Super Stores, a ShopRite supermarket operator based in Westville, N.J. Brown has built supermarkets with TRF and the Pennsylvania Fresh Food Initiative. His company has 10 ShopRites, one in New Jersey and the other nine in and around Philadelphia, including six urban stores.

Brown is also chairman of UpLift Solutions, a nonprofit that helps supermarkets develop stores in underserved areas nationwide. He said he would consider opening more stores in New Jersey as TRF rolls out its initiative, and is also interested in helping other grocers develop stores here.

Brown said his urban stores are financially successful, and he said consumer demand for fresh food materializes as soon as a new supermarket opens its doors.

"We open these stores in places that did not have produce for sale, and our fresh food sales in our urban stores are comparable to our suburban stores. That means to me that it [the supermarket] regulates peoples' diets to be a normal diet almost instantly," Brown said. "It works without any training or nutrition classes or anything like that. Most people like fresh food: you don't have to train people on fresh food."

Another initiative to combat food desserts would establish a network of mobile farmers markets in underserved communities statewide. The bill detailing the program (A-3688) was approved early in December 2011 and is on the governor's desk.

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