Community Renewal Good Stories - Cumberland County

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EZ Bonds Ice Development in Cumberland County

Cumberland County, New Jersey, EZ

A Cumberland Empowerment Zone Corporation (CEZC) partnership with the New Jersey Economic Development Authority (EDA) has put development in the area on ice via a skating facility that increases recreational opportunities in the area and indirectly promotes additional development.

To facilitate issuing tax-exempt EZ facility bonds, CEZC joined forces with New Jersey EDA, an active issuer of tax-exempt bonds for commercial and industrial projects over the course of several decades. The first tax-exempt bond financing, for approximately $4.2 million, closed in January 2002 and financed the construction of a skating facility used for ice hockey, family outings, and other recreational purposes. The ice rink will be a prime location for hockey tournaments, and CEZC expects that nearby hotels and restaurants will indirectly benefit from the economic development project.

This project had its roots in a memorandum of understanding (MOU) signed by CEZC and New Jersey EDA in July 2001. The MOU outlined the procedure for referral and approval of bond issuance and detailed both the services that New Jersey EDA would perform in issuing the bonds and that CEZC would provide in monitoring compliance with the EZ business test, particularly with respect to meeting the EZ Facility Bond requirement that 35 percent of employees reside in the EZ. New Jersey EDA and CEZC also agreed on how to share the fees paid by the borrower to the EDA. New Jersey EDA representatives then met with members of the local business community to make businesses aware of EZ facility bond financing, and CEZC agreed to provide compliance training to interested businesses. CEZC also developed a compliance reporting agreement to be executed by CEZC and a borrower, which includes a requirement that the borrower submit an annual reporting form.

Once this partnership was designed and in place, businesses could take advantage of the bond program. Since that time, in addition to the ice skating facility, two other businesses have used these services to take advantage of the tax-exempt financing available in the EZ.

One company, Cumberland TruStone LP, produces aerated autoclaved concrete block and panels for use as building materials. Using $5.6 million in tax-exempt bond financing and a $500,000 predevelopment loan from CEZC, Cumberland TruStone is in the process of constructing a 50,000-square-foot manufacturing facility. Company President Steve Gervasio said, "But for the predevelopment money that allowed us to put this project together and the tax-exempt bonds that provided a startup company with an instrument for long-term debt, we would not have been able to see this state-of-the-art project materialize."

Garden State Bulb Company LLC imports flower bulbs from Holland for distribution to customers throughout the United States and Canada. The company used $2.4 million in tax-exempt bonds to construct a new 80,000-square-foot facility on approximately 12 acres. It also is taking full advantage of EZ wage credits. Both businesses are located in the Vineland developable site within the EZ. CEZC and the Cumberland County Office of Employment and Training (CCOET) are helping these businesses meet their 35-percent resident employee requirement. CEZC has funded an initiative that expands the county transportation system so that residents can get from the EZ census tracts to the EZ developable sites, eliminating a barrier that prevented employers from hiring EZ residents.

The Cumberland County EZ, a multi-jurisdictional EZ, resulted from the combined efforts of the Bridgeton, Millville, Vineland, and Commercial township governments. CEZC administers and works in partnership with CCOET to develop the EZ.

For more information on the Cumberland County EZ, contact Executive Director Jeannine MacDonald at (856) 459-1700 x7.