Newark Makes Bold, $100M Pledge To Black, Latinx Business Owners

NEWARK, NJ — It’s “40 acres and a mule” for a new century.

On Monday, elected officials and a star-studded cast of supporters announced the launch of the Newark 40 Acres and a Mule Fund, a program that aims to put millions of dollars of capital directly into the hands of the city’s Black and Latinx business owners.

The program – which is trying to attract attention from investors – has already seen support from celebrities such as Shaquille O’Neal and the Rev. Al Sharpton, as well as a roster of high-profile corporate sponsors.

The fund will be co-managed by New Jersey Community Capital and Invest Newark, the city’s economic development corporation. So far, it’s been promised $2 million towards an ambitious, $100 million goal.

According to city officials:

“The initiative will drive economic wealth among Black and Latinx populations in Newark by leveraging invested capital, public subsidies and public assets to enhance the value of Black and Latinx-focused small businesses and real estate development.”

The name of the fund comes from one of the earliest Reconstruction promises to the newly-freed slaves of 1865, to provide each freshly-emancipated family head with “40 acres and a mule.” The program was never pushed forward, and most of the “freedmen” rapidly reverted into a new form of semi-slavery as tenant sharecroppers, eking out a living in poverty and perpetual debt.

During a news conference at City Hall on Monday, Mayor Ras Baraka stood beside Rev. Sharpton to tout the new program.

“Black Lives Matter is not rhetoric, it’s a statement of action,” Baraka said. “It’s more than just eliminating racist behavior and inequality in our justice system – it’s about creating equality and opportunity for our black and brown communities.”

Baraka said that “vast wealth disparities” between white-owned businesses and Black and Latinx-owned businesses have been thrust into the spotlight by the coronavirus pandemic.

According to the New Jersey Institute for Social Justice, the median net worth of New Jersey’s white families is $309,000, while the median for New Jersey’s Latinx and Black families is just $7,020 and $5,900, respectively—one of the worse racial wealth gaps in the nation.

“We need to empower our entrepreneurs of color so that they can compete at increasingly higher levels,” Baraka said. “The Newark 40 Acres and a Mule Fund will bring pride and prosperity to our city as a whole, and to our Black and Latinx business community in particular.”

Bernel Hall, CEO of Invest Newark, said the fund can be a national model for other financial institutions, corporation donors and local economic development corporations. Hall’s counterpart at the New Jersey Community Capital agreed.

“Despite over a century of broken promises, Black-owned businesses and entrepreneurs have thrived and been the economic engines of their communities,” President Wayne Meyer said.

“It’s a privilege for New Jersey Community Capital to help Mayor Baraka and his team provide capital to Newarkers looking to carry on this rich tradition,” Meyer added.

In addition to O’Neal – a former NBA star who has invested in other real estate projects in Newark – some of the fund’s first investors include AT&T, Panasonic, Carlos Medina of the Hispanic Chamber of Commerce of New Jersey, the Nelson Mullins Law Firm, New Jersey Community Capital, PSE&G and Popular Bank.

Those interested in learning more about the fund or donating can contact BHall@investnewark.org.

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REDISTRIBUTING THE WEALTH

The new fund is the latest effort to level the playing field when it comes to redistributing the wealth in Newark.

According to Baraka’s office, before the COVID-19 pandemic slowed economic progress, the Brick City saw more than $5.6 billion in public and private investment and record-levels of local job creation since 2014. The gains include the addition of 5,818 jobs, 2.7 million square feet of commercial space and 2,004 units of housing, including 929 units of affordable housing.

In June, city officials announced that Newark will use almost $12 million to create a new “Office of Violence Prevention.” The city will re-channel about 5 percent of its policing budget to pay for it.

Earlier this year, Baraka and the recently formed Guaranteed Income Task Force released their plan to try out the concept of universal income in New Jersey’s largest city.

Newark plans to dip its toes into the water before rolling out the program on a citywide basis. Currently, officials are planning to roll out a small-scale pilot program that would involve between 500 and 1,000 participants.

In August, city officials held a ribbon cutting ceremony for the Newark Paper Company. It marked the launch of the city’s new “employee ownership program,” which is being rolled out in partnership with Invest Newark.

Since its launch, the company’s employees – each a resident of the Greater Newark region – have been training to eventually take over as owners. Together, they’ve been learning how to run the warehouse, keep inventory, maintain financial records and make the crucial decisions that keep a business alive.

Their hard work will pay off as soon as the company starts turning a profit, at which point Invest Newark will separate itself and pass over full ownership to its employees.

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