Crime, political corruption, and poverty had plagued Newark for many years. Recently, however, a committed team has been able to revitalize Newark’s economy – and reputation – by reducing poverty, increasing public safety, and cleaning up its politics. Part of the process involved overcoming years of disinvestment – a very common story for urban communities. With the help of Brick City Development Corporation (BCDC), the administration of Mayor Cory Booker has made great strides in addressing challenges within city government related to economic development and investment.
But the change didn’t happen overnight. Rather, the rebranding process is taking place one step at a time … almost one person at a time, as Lyneir Richardson, Chief Executive Officer of Brick City Development Corporation, explains in the interview that follows.
MuniNet: What was the catalyst for the positive change in Newark over the past five years?
Richardson: A lot of the credit for the turnaround in Newark can be attributed to Mayor Cory Booker, who first took office in 2006. His mission has been – and continues to be – to build “a stronger, safer, prouder Newark,” a vision that we all have pursued with integrity and in earnest.
The rebranding and rebuilding of the Economic Development Corporation and the creation of the Brick City Development Corporation (BCDC) were done to overcome perception issues and provide a fresh start. BCDC has focused on real estate development, business attraction and small business lending. Mayor Booker’s vision was to have an agency that was independent of – but aligned with the agenda of – city government. He put together a carefully chosen team of experienced professionals with a track record in finance and real estate to help make deals happen. A strong support staff, a highly regarded board of directors, professional office space and a business service approach completed the package, and the new economic development organization began its work.
“Urban development is an evolution rather than a revolution …”
The “Pipeline to Finish Line” project, designed to bring projects to fruition, was launched in in December 2009. The project has been quite successful; there is over $700 million of new investment underway, which is creating 2,500 new permanent jobs and close to 2,500 construction jobs.
Part of the process involved spreading the word: Newark has a lot to offer. In addition to its proximity to New York and its connectivity within and beyond the Northeast region, Newark offers many lesser-known amenities, including over 20 art galleries, great restaurants and entertainment venues. We proudly inform people that Newark is a college town with a community of over 50,000 students and faculty. Five colleges and universities – Rutgers University, University of Medicine and Dentistry of New Jersey (UMDNJ), New Jersey Institute of Technology (NJIT), Essex Community College, and Seton Hall Law School – are all located within a ten-minute walk of the central business district.
Telling Newark’s memorable and believable success stories, one at a time, has helped change the perception of the city.
… jobs translate to spending and buying power, which, in turn, increase retail sales, encouraging more businesses to open their doors, all of which then lead to economic stability.
MuniNet: Does improvement in one area tend to inspire improvement in others? (For example does a stronger economy lead to a lower poverty rate which, in turn, might lead to a lower crime rate?)
Richardson: Success often begets success. I often say that urban development is an evolution rather than a revolution. Economic achievement and investment often influence local market dynamics. When the economy is healthy, vacancy rates are low and unemployment is down, so crime tends to goes down.
There is also synergy between market sectors; an increase in workforce (commercial users) tends to drive demand for the housing and retail sectors. Because of our recent business attraction wins, Newark will soon reach the tipping point of 1,000 units of downtwon housing. Within the context of real estate investment and business attraction, there is also synergy between users. A handful of companies and organizations that have stepped forward and taken a risk on investment are not only seeing their investments pay off, but their success makes a statement to the marketplace.
Restaurants are a good example. BCDC has invested in several restaurants across from the Prudential Center – one business, in particular, has been overwhelmingly successful and is enjoying strong sales for an operation of this type (i.e., casual food, bar food, sports bar). Its success has been an example for other restaurateurs who were considering the market; four other restaurants opened in downtown Newark this year and several others are planned.
All of this investment means jobs; jobs translate to spending and buying power, which, in turn, increase retail sales, encouraging more businesses to open their doors, all of which then lead to economic stability. A larger workforce and more buildings activated and in use mean more people on the streets, more traffic, contributing to the vibrancy in individual neighborhoods, as well as in downtown.
MuniNet: Newark has clearly embraced the concept of an inner city cluster economy – and it’s working. Can you elaborate how a cluster economy has contributed to the economic rebirth of Newark?
Richardson: We are communicating that Newark offers “product synergy” with a growing cluster of businesses in production, manufacturing, and distribution. Several of these firms are now selling to each other. Newark benefits from real economies of scale and cost containment – in labor, superior transit, real estate value and utilities.
The food industry in Newark is a great example of a cluster economy. Newark has a long history as a location for manufacturing and distribution companies. In the past two years, we have been successful in getting several large corporations to select Newark as a site for relocation of their headquarters and/or for expansion of their manufacturing and distribution facilities.
The Manischewitz Corporation opened a new state of the art facility in the spring, which sends a very powerful message to the marketplace and food industry overall. Here is a very successful, well-known brand that has made a commitment to Newark with a very solid investment. A new 180,000 square-foot distribution facility is being built for Wakefern Food Corporation to distribute produce from Buffalo to Baltimore, and Bartlett Dairy – which services over 450 Starbucks stores in the New York/New Jersey metro region – has bought and renovated a refrigerated warehouse in Newark’s south ward. All of these decisions helped us in our efforts to influence Damascus Bakeries in its selection of Newark as the location for its new headquarters. Bonita Banana opened its U.S. World Headquarters in Newark, as well.
MuniNet: Newark made a conscious decision to leverage its transit-related assets, with a stated goal to become a national model for transportation, specifically seaports. How did the city approach that process, taking it from concept to reality?
Richardson: The overriding strategy was to identify companies that could benefit from the area’s many transit resources, and build from there. Access to Newark’s airport and seaport, transit and highways are essential for manufacturing and distribution firms. Newark enjoys phenomenal access to transit whether by rail – local, commercial, and Amtrak – the second largest active seaport in the U.S., and one of the largest international airports in the country. We quantified the actual transit resources available, including the number of trips and connectivity (international – air and sea) capacity, and then tied that with the road network.
When presented collectively as individual transit sources or as an integrated system, it’s very powerful. The level of connectivity in Newark supersedes that in most similar markets; combine that with affordability of land and available labor and its location in the Northeast region (including its proximity to Manhattan), Newark is very competitive.
Spreading that word via strong public relations and relationship management is a crucial ingredient in making things happen. Brick City Development has been very proactive in reaching out to companies considering relocation, and in maintaining relationships with companies that now call Newark home. My job is to make the phone ring, communicate our compelling story and make sure the follow-up happens. That’s how deals get done.
About the Expert
Lyneir Richardson is the Chief Executive Officer of Brick City Development Corporation (BCDC). Richardson applies his 20 years of experience as an attorney, entrepreneur and corporate executive to overseeing BCDC’s business attraction, real estate development and small and minority business lending mission.
Before joining BCDC, Richardson was Vice President of Urban Development at General Growth Properties, where he led the national initiative to bring quality shopping centers to ethnic neighborhoods in large U.S. cities. Prior to General Growth, Richardson founded Lakeshore Development & Construction Company, which developed, built and sold new affordable housing in the metro Chicago area.