Abigail Schwendeman, Author at NJEDA

Notice of Funding Availability: Applications become available when the program re-opens at 9:00am Tuesday, February 16, 2021.

BACKGROUND ON SMALL AND MICRO BUSINESS PPE NEEDS

The NJ Small and Micro Business PPE Access Program was developed in response to consistent concerns emerging from the Governor’s Restart and Recovery Commission, the nine sector-based committees of the Governor’s Restart and Recovery Advisory Council and input from numerous small and micro businesses. Both the Commission and the Advisory Council highlighted the need for readily available, priced PPE to accelerate economic recovery. As small and micro businesses and organizations in historically underserved communities are particularly vulnerable to being crowded out of essential goods when tight market conditions occur, a key consideration of the program has been the need to ensure equitable distribution and pricing of PPE.

More than one third of all New Jersey workers are employed by organizations of 100 employees or fewer. Many of these companies do not have the reach or the resources to obtain goods outside of their normal retail buying channels, particularly in times of significant supply/demand imbalances. PPE falls squarely into the category of a good that was not essential to many of these organizations before the COVID-19 outbreak but is critical today.

PROGRAM PURPOSE

Overall Program

The NJ Small and Micro Business PPE Access Program is designed to make fairly priced PPE more easily available to all the small and micro businesses and non-profit organizations in the state, to prevent the spread of the COVID-19 and reduce their burden of sourcing for the PPEs from the competitive markets. In addition to the above the program will:

Facilitate the State’s economic recovery by ensuring that small and micro businesses and non-profit organizations – the customers – can access affordably priced PPE and other safeguarding equipment to protect their employees as they return to work and continue to operate in a COVID-19 environment;
Ensure small and micro businesses and non-profit organizations have access to the information they need to select the appropriate PPE needed for their context;
Ensure that businesses in historically underserved communities are particularly able to access affordable PPE; and
Support the State’s manufacturing sector by providing an offsetting subsidy for purchases of PPE manufactured or assembled at a manufacturing facility in New Jersey.

The Phase 1 Program – Selecting Designated Vendors and Sourcing PPE from NJ Companies

On August 11, 2020, NJEDA approved Phase 1 of the PPE Access Program. The focus of Phase 1 has been to identify and designate qualified vendors to launch online platforms where NJ companies can buy PPE at fair prices from reliable vendors offering a curated array of quality products all at a discount to normal market prices. Within the Program, these vendors are called “Designated Vendors” (DVs). Small and micro businesses will access Designated Vendors’ online platforms via a PPE Access Program website hosted on the State’s COVID19.nj.gov site (covid19.nj.gov/ppeaccess). Small businesses will also be able to learn about workplace PPE best practices and use a simple tool to determine their PPE needs.

In addition, Phase 1 includes an economic development component to encourage the Designated Vendors to make wholesale purchases of PPE from NJ manufacturers and from small distributors located in traditionally underserved NJ communities. To support this aim, the NJEDA approved the creation of a $3.5 million grant pool to be used as subsidies to bridge potential pricing gaps between NJ manufacturers and distributors and the global market.

The Phase 2 Program – Providing Purchase Subsidies to Benefit Small and Micro Businesses

Based on the response received from DVs of varying types and sizes, the program was expanded by launching a second Phase, aimed at providing purchase subsidies through DVs to benefit the State’s small businesses with a focus on those located in historically underserved communities.

As part of Phase 2, on October 14, 2020, NJEDA approved a grant pool of $20.4 million for purchase price discounts of 25% through Designated Vendors to small and micro businesses. The subsidized discount had an initial cap of $400 per organization generally and $500 for organizations located in historically underserved communities (i.e., located in one of New Jersey’s 715 Opportunity Zone Eligible census tracts). Companies eligible to benefit from these subsidies are determined by company size (based on full-time equivalent (“FTE”) employment) and location, as described more fully below.

Under paragraph 6(a) of the Request of the Members in the October 14, 2020 Board memo, the CEO was given the delegated authority to make changes to “extend internal program deadlines,” and under paragraph 6(b), he has the delegated the authority to “adjust per round small business coupon/discount values,” based upon program demand.

Based on initial experience of the Program’s second phase, Staff requested changes that substantially increased the level of program participation and ensured wider availability of essential PPE for New Jersey small businesses. The requested changes took effect on Tuesday, November 24, 2020. These changes:

The initial Phase 2 of the program ended on December 31, 2020. Under his delegated authority to extend internal program deadlines, the CEO has granted an additional extension of the PPE Access program Phase 2 until no later than March 31, 2021.

PROGRAM STRUCTURE AND ELIGIBILITY

Benefits through the Program

Phase 2 of the extended PPE Access Program has been structured to provide $2.5 million of grant funding

to cover 65% of eligible small businesses’ or non-profits’ PPE purchases through the Designated Vendors PPE Access Program sites. The 65% discount is capped per organization, per round of the Program, at $800 generally, and $1,000 for organizations in opportunity zone eligible census tracts. This subsidized discount is in addition to the minimum 10% discount offered by each of the Designated Vendors under Phase 1 of the Program.

Discounts are made available by the Designated Vendors to businesses and non-profits (“Subsidy-Eligible Recipients” or “SERs”) having 100 or fewer FTE employees, based on EDA confirmation of eligibility. The program eligibility threshold is at 100 FTEs for the following reasons:

A business’s FTE is determined based on its most recent NJ Department of Labor (“DOL”) form “NJ Employer Report of Wages Paid” (WR-30) where available, or, in limited circumstances where NJ DOL data is not available, through company self-certification.

Where possible, Designated Vendors will split the total value of the coupon/discount into multiple coupons/discounts of lower value to enhance flexibility of the program (i.e., allow SERs to split their PPE purchase up over multiple purchases). The ability to offer that flexibility will be determined by the Designated Vendors’ technical capabilities and may differ by Designated Vendor.

While businesses will have the ability to purchase goods other than PPE from the Designated Vendors, all subsidies under this program will only apply to PPE offered through the Program.

General Program process

To simplify the administration of the grant funding for small businesses and non-profits, funds flow from NJEDA to the Designated Vendors, who provide the benefits to SERs in the form of a coupon/discount to reduce their payment obligations.

The flow of application, approval and receipt of subsidies occurs as follows:

NJEDA’s determination that a business is eligible for a coupon/discount amount will be subject to continued funding availability.

Coupon/discount reimbursement to Designated Vendors will be made within 30 days after receipt of accounting documentation. To comply with the expenditure requirements of the CARES Act and the MOU with NJ Treasury, the Designated Vendor must document the PPE purchased by each SER and must request NJEDA disbursement from NJEDA no later than March 29, 2021 (or applicable deadline based upon any updated State and Federal CARES Act disbursement requirements).

Eligibility confirmation process

Organizations seeking to qualify as SERs and to benefit from the Phase 2 subsidies will be required to confirm their eligibility on the PPE Access Program website. While the subsidy is offered through the Designated Vendors, NJEDA will be responsible for eligibility checks to ensure privacy, timeliness and simplicity.

Eligibility will be determined once per round per EIN (meaning that businesses that utilize one EIN for multiple locations will only be able to access the coupons/discounts once per round).

Eligibility screening will include:

A tax clearance certificate from the New Jersey Department of Treasury’s Division of Taxation will not be required for a small business to benefit from this program. However, tax clearance certificates continue to be required for the Designated Vendors in the Program.

During the eligibility check process, the SER will be required to confirm their correct email address. SERs will be solely responsible for entering a correct email address; NJEDA will not verify or confirm the email address.

Appeals

Organizations will be able to appeal the Authority’s determination of Phase 2 eligibility within 5 days of notice of the determination. Appeals will be reviewed by a NJEDA member who has not up until that point been directly involved in the eligibility determination.

As the Authority is not involved in the actual issuance of the coupon/discount, in the use of the coupon/discount, in the sale of the PPE, the operation or functionality of the DV website, or such other actions or decisions under the DV’s sole control, any attempt to appeal from such actions will be rejected, as they are not a protest of an EDA action or decision.

Similarly, any attempt to appeal because the SER entered and confirmed an incorrect email address will not be a valid basis for an appeal. Funds will be set aside for the maximum amount of subsidy support for any appeals that are lodged with the Authority.

Post-eligibility audits

NJEDA will conduct audits to confirm that small business self-certifications provided during the eligibility assessment process were accurate. In such cases where the audit reveals that a self-certification was not accurate, NJEDA may request that the funds be returned and/or may refer these organizations to the relevant State agency for further investigation.

Funding Disbursement

Disbursements (reimbursements of subsidized discounts) to Designated Vendors from the $2.5 million grant pool will be made up to 30 days after receipt of acceptable Phase 2 documentation. Designated Vendors must submit request for NJEDA disbursement no later than March 29, 2021 to enable enough time for disbursement.

Additional Information Additional information on the New Jersey Small and Micro Business PPE Access Program and this grant may be found at: https://covid19.nj.gov/ppeaccess

Indicator 1 – New Jersey Private-Sector Gross State Product (GDP)

Source: Bureau of Economic Analysis

As with every state in the US, New Jersey’s economy suffered an unprecedented drop in 2020:Q2, followed by an unprecedented rebound in 2020:Q3.

Heading into Q2, with COVID-19 cases surging, New Jersey’s economy went into a virtual freeze – something with no parallel in post-WWII history. Thanks to successful efforts in the state to “flatten the curve” and a huge fiscal spending surge to support businesses and households, the economy stabilized in Q2, setting the stage for a substantial rebound in Q3.

Gross state product (GSP) – how we measure the level of economic activity for any defined period – shows New Jersey’s economy dropped at a breakneck 37 percent annualized pace in Q2. To put that decline in perspective, the next sharpest decline in New Jersey’s GSP over the past 20 years was a -9.7% annualized drop in 2008:Q4 – an undoubtedly terrible time for the economy. This latest drop was four times the magnitude of that decline.

Fortunately, the combination of economic stimulus, financial supports, and success in slowing the pace of COVID-19 infection enabled New Jersey’s economy to snap back in Q3, jumping at an incredible 41 percent annualized pace. However, even with this growth, at the end of the third quarter, New Jersey’s economy was still operating four to five percent below capacity (see difference between Q3 GDP and the GDP trend in Q3).

Of course, this is not just the case in New Jersey – the economy for the US in total is performing well below its capacity. The economy operating this far below its capacity – the gap – is a big problem. There is an empirical relationship between the size of the economy’s gap and the unemployment rate. What we have seen in recent history is a gap of four to five percent is in line with an unemployment rate of seven to eight percent. And the longer it takes to narrow and close this gap, the greater the chance of people remaining unemployed for a long period and becoming less employable. This is due to the fact that, the longer people remain unemployed, the more labor market skills they lose, causing them to be shunned by potential employers. This can also lead to people becoming discouraged to the point that they quit looking for work. That said, we expect the mix of government stimulus and effective vaccination programs get the economy to surge in 2021. Government stimulus will not only provide support to the economy during the recent COVID-19 resurgence but also provide a substantial tailwind to the economy as more people get vaccinated and more of the economy reopens. This should quickly narrow the current economic gap and get people back to work.

Indicators 2 and 3 – New Jersey Goods Trade Flows

Source: Bureau of the Census

As with all economic shocks, the effect of the pandemic on the economy has not been even across sectors. From where we sit now, almost a year following the initial shock, it is apparent the pandemic has had a bigger impact on face-to-face services than on goods production. That said, production and goods trade have been squeezed.

Since the beginning of the 2020, there has been a scramble among analysts to find data sources that best encompass the economic impact of the pandemic on supply chains, and no metric paints a clearer picture than total trade. Many believed that total trade would take a large hit due to the interruption of supply chains caused by closures, and the data soon backed up these claims.

The figures above show the mapping of the total trade of goods in New Jersey for 2019 and 2020, which illustrate the effect of COVID’s supply-shock and our road to recovery. From February 2020 to May 2020, total trade of goods dropped 32 percent to its lowest point: $9.8 billion. Since then, there has been an increase in total trade for five consecutive months which surpassed New Jersey’s figures for the month of October 2019 by $540M and narrowed our gap from last year’s total to $12.9B. With the worst out of the way and the damage apparent, suppliers are now looking toward the future to recoup their losses and get back on track.

Indicators 4 and 5 – New Jersey Office Leasing Activity and Vacancy Rate

Source: CoStar

The office and retail Commercial Real Estate (CRE) markets in New Jersey were dealt a significant blow by the pandemic. Unlike the industrial market, which has not only weathered COVID-19 but even benefitted from it in some instances, government shutdowns and social-distancing practices resulted in a sharp downturn in retail and office CRE in 2020.

Prior to the pandemic, New Jersey’s office market appeared well-positioned for steady growth entering 2020. Vacancy rates in 2018 and 2019 were steady, and rents had been rising. Leasing activity had fluctuated over the prior 10 years but remained between 3M-4M sq. ft. per quarter. As seen in the chart below, COVID-19 put an end to that trend. The amount of square footage leased in 2020:Q2-2020:Q4 was 44% percent below the prior five-year average. Office vacancy rates shot higher, from around 19 percent in 2019 to above 23 percent at the end of 2020.

Indicators 6 and 7 – New Jersey Retail Leasing Activity and Vacancy Rate

Source: CoStar

Despite the frequent commentary that e-commerce is destroying brick-and-mortar retail, retail markets in New Jersey through 2019 had been seeing some growth. Prior to the pandemic, vacancy rates had dropped statewide to 4.5 percent. The chart above shows the recent history of statewide retail vacancy rates from 2007-2021. The expectation is that vacancy will decline as businesses are allowed to reopen and operate at full capacity. The number of direct leasing deals also saw a notable decrease, especially in 2020:Q2. However, deals increased in Q3 and Q4, a positive sign for retail’s recovery from the pandemic.

New Program Incentivizes Use of Zero-Emission Vehicles in Camden and Newark

TRENTON, N.J. (January 15, 2020) – The New Jersey Economic Development Authority (NJEDA) Board of Directors today approved the New Jersey Zero Emission Incentive Program (NJ ZIP). The $15 million pilot program will fund 100 to 300 vouchers ranging in value from $25,000 to $100,000 for businesses and institutional organizations in the greater Newark and Camden areas for the purchase of new, zero emission medium and heavy-duty vehicles (MHDVs). Bonuses will be available for small businesses and minority-, women-, and veteran-owned businesses. The NJEDA anticipates launching the program in the coming months.

“NJ ZIP brings a tried-and-true model for increasing the adoption and use of zero emission vehicles to New Jersey, with a focus on reducing emissions in the greater Camden and Newark areas,” said Governor Phil Murphy. “This is a critical step toward our environmental justice initiatives that I hope will spark the widespread adoption of zero emission vehicles across the state.”

“The adoption of zero emission vehicles will reduce dangerous emissions within the greater Newark and Camden communities and drive future economic growth by creating jobs critical to supporting and accelerating adoption of these vehicles,” said NJEDA Chief Executive Officer Tim Sullivan. “NJ ZIP moves us closer to these goals by providing a new resource that will enable businesses and institutions to invest in zero emission vehicles. We will look to learn from this initial pilot program in two of the most over-burdened communities in our state, near major ports and transportation hubs; and if successful, we will look to expand to other regions.”

“Increasing the use of zero emissions vehicles is central to achieving the targets set out in the Energy Master Plan and the RGGI Strategic Funding Plan,” said NJBPU President Joseph L. Fiordaliso. “NJ ZIP moves us toward these goals, in parallel with our other EV programs such as Charge Up New Jersey and hand-in-hand with Governor Murphy’s vision for a cleaner, healthier energy future.”

“Together, we can spark real and lasting change to reduce greenhouse gases from New Jersey’s cars and trucks,” said New Jersey Department of Environmental Protection Commissioner Catherine R. McCabe. “Transportation is by far the largest source of greenhouse gas emissions in New Jersey, and most of these emissions come from commercial vehicles. NJ ZIP will enable businesses of all sizes, with a special emphasis on micro and small businesses, to replace their current medium duty vehicles with zero emission alternatives. Together with the DEP’s grant program, this important initiative will protect our environment, improve public health, and advance Governor Murphy’s environmental justice and clean energy goals.”

Transportation accounts for 42 percent of greenhouse gas emissions in New Jersey; more than double the emissions from the second largest source. Specifically, medium and heavy-duty vehicles (MHDVs) contribute the majority of New Jersey’s transport-sector emissions. For this reason, increasing the use of zero emission vehicles is central to many State plans for protecting the environment, including Governor Phil Murphy’s Economic Development Strategic Plan, New Jersey’s Energy Master Plan, and the RGGI Strategic Funding Plan.

NJ ZIP is the first initiative in the State’s holistic, RGGI-funded effort to support the deployment of zero emission MHDVs. The pilot program approved today allocates $15 million to provide vouchers to businesses and organizations purchasing new, class 2b to class 6 vehicles. The size of vouchers awarded through the program will vary depending on the class of vehicle being purchased, from a minimum of $25,000 for Class 2b vehicles to $100,000 for Class 6 vehicles. Bonuses will be available for small businesses; women-, minority-, and veteran-owned businesses; vehicles that are manufactured in New Jersey; small businesses that scrap their eligible MHDVs; and vendors that invest in driver education and training. More information is available at https://www.njeda.gov/njzip.

Vouchers will be available on a first-come, first-served basis with $5 million set aside for micro and small businesses. Initially, NJ ZIP will only be available in the greater Newark and greater Camden areas, defined as the overburdened communities within or intersected by a circle with a 10-mile radius centered on Newark and Camden.

NJ ZIP will be funded using proceeds from New Jersey’s participation in RGGI, a multi-state “cap-and-trade” program regulating carbon dioxide emissions. The State plans to deploy those funds within four initiative categories identified in the RGGI Strategic Funding Plan: catalyzing clean, equitable transportation; promoting blue carbon in coastal habitats; enhancing forests and urban forests; and creating a New Jersey Green Fund. More information about New Jersey’s plans for using RGGI funding is available https://www.nj.gov/rggi/index.html.

About the New Jersey Economic Development Authority

The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.

To learn more about NJEDA resources for businesses call NJEDA Customer Care at 609-858-6767 or visit https://www.njeda.gov and follow @NewJerseyEDA on Facebook, Twitter, Instagram, and LinkedIn.

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