LAKEWOOD — Urban Enterprize Zone may sound like a new action movie or some kind of video game.
But for several communities in New Jersey, it is an important state program to help reduce sales taxes and boost sales in the most troubled areas.
In Lakewood, this has become a priority as the council plans to spend up to $750,000 on a long-term plan to expand staff, expand reach and focus on convincing local merchants to take advantage of the somewhat unknown option.
“It means a lot of new and existing commercial activity,” said David Klein, executive director of the Lakewood Development Corporation.
The Urban Enterprise Zones, also known as the UEZ, are areas of a municipality that have been identified by the state as economically problematic and have the right to reduce sales tax for customers by half.
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Instead of paying the 6.625% state tax, those in the UEZ charge customers only 3.3125% sales tax. Half of the tax collected by the state is then put into a fund and returned to the city where the tax was collected so it can be used to improve those same urban enterprise zones.
In 2023, Lakewood received more than $5 million from that fund, with another $7.5 million expected in 2024. All of this should be spent on programs or projects that benefit the community’s UEZ, which covers approximately 25% of the township.
Furthermore, any business operating in the UEZ does not pay sales tax on the purchase of most items needed to run the business.
“The really important part of the UEZ is the benefit to businesses,” said Mayor Ray Coles. “Everything needed to run your business is tax exempt. You save there from the top.
Lakewood is one of 32 communities in New Jersey with the UEZ designation and the only one in Ocean County. Monmouth County has two, in Asbury Park and Long Branch.
To take advantage of the program, merchants must register, and so far, only about half of the city’s eligible businesses have done so, according to Lakewood.
“There are well over a thousand companies eligible,” Klein said, adding that about 660 have been registered so far. “We hope to reach 1,000 by the end of the year.”
To that end, the city recently hired a new full-time business development officer at an annual cost of $60,000. Moshe Bender, who is also chairman of the Lakewood Board of Education, was appointed in April with a directive to help sign up more UEZ companies.
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Additionally, the city plans to hire a Vineland marketing firm for $90,000 to help promote the UEZ program in the city and attract more customers and entrepreneurs.
“The easiest conversation is a half discount on sales tax. That is the icing on the cake,” said Glenn Davila of Performance Marketing, who will be formally appointed by the Township Committee on June 20. “Lakewood is one of the largest UEZs and its strength lies in the number of companies. Our goal is to increase the number of companies so that they can all be connected individually.”
He also has a campaign in mind that will include social media, digital advertising, a new UEZ newsletter and telemarketing campaign. Davila sees the predominantly Orthodox community as no different than any consumer base when it comes to promotional tools, noting that the message is key.
“They are quite connected to that community,” he said of current township leaders. “My goal in many ways will be to get ahead of them. Once you understand the audience, the tactics are basically the same.”
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Current UEZ merchants praised the program as a way to save their customers money and give them a boost in spending with their own tax exemptions.
“It’s a help to my customers, it’s a draw for them, a lower tax,” said Craig Zynderman, owner of J&M Flooring Supply. “I have larger items with a ticket, the higher that item with a ticket, the more tax you pay. But the customer can save more. If you tell a customer he can save a hundred dollars in taxes on a new floor, that’s attractive.”
Astor Chocolate owner Meir Grunhut agreed.
“We’ve had it for a few years,” he says. “There is a lot to be gained from it, it helps enormously. We enjoy using it every year. There are only good things to say about it.”
Participating companies must also register and submit certain reports to the state every year, and hire workers who remain in the UEZ areas.
Klein foresees more direct and practical promotion of the UEZ options in the coming months, including formal presentations at area businesses to inform traders, as well as posters and other PR assets.
“We will be going to office buildings once or twice a week giving presentations and educating the business communities in the zones so they can sign up for the program,” Klein said. “The goal is to attract as many qualified companies as possible.”
There’s also talk of a “UEZ Day,” possibly at Shoretown Ballpark with exhibits, food, concessions and the possibility of a charity ball game pitting police officers against firefighters or paramedics, he said.
Another key aspect of the new approach is a five-year UEZ plan prepared by Vineland-based Triad Associates at a cost of $25,000 and released last month. It is required by the state before new UEZ projects can be approved.
The plan designates about 6.23 square miles of Lakewood as UEZ areas, for a total of about 25 square miles.
The updated map differs slightly from previous designations, but has a similar total area. One change is the addition of UEZ areas on both sides of County Line Road.
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But the main parts remain the same and include Downtown Lakewood along Main Street from First to Fifth Avenues; Lakewood Industrial Park in the southeast corner, which also includes the airport and Shoretown Ballpark; and most of Route 9.
“Once this is passed and approved by the state, we can make a lot of improvements downtown that we will try to make happen,” said Mayor Ray Coles.
One program Coles would like to launch soon is an expanded team of four to six full-time downtown public works employees who will keep the area clean and maintained and respond immediately to any problems.
“I call it the Downtown Concierge,” Coles said. “There will be people there all the time and if they see something that is out of place, they can report it.”
Coles estimates the new staff will cost about $500,000 annually, most of which could come from the township’s UEZ state funds.
The five-year plan also mentions other UEZ projects, including:
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Expanded EMS services and two new ambulances specifically for UEZ use.
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New security cameras outside the historic Strand Theater for downtown police surveillance and in the town square.
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New public safety vehicles dedicated to UEZ areas, including two electric bicycles, two motorcycles and a special response team truck
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Expansion of Lakewood Shuttle bus service with at least three new city buses operating along new routes.
“It’s a win-win for the city and the state, it shows the program is a success,” Coles said. “The more companies register, the greater the financial compensation for the municipality.”
Joe Strupp is an award-winning journalist with 30 years of experience covering education and diverse local communities for APP.com and the Asbury Park Press. He is also the author of four books, including Killing Journalism on the state of the news media, and an adjunct media professor at Rutgers University and Fairleigh Dickinson University. Reach him at jstrupp@gannettnj.com and at 732-413-3840. Follow him on Twitter at @joestrupp
This article originally appeared on Asbury Park Press: Lakewood businesses can cut costs and sales taxes, but many don’t know about it
