About two dozen people spoke before City Council on Monday night, drawing one of the largest crowds to a public hearing in recent memory, for an ordinance to expand the Special Improvement District (SID), including supporters, opponents and others pleading for more information and time to consider the impact.
After about an hour of public comments, Ordinance 42-14 was approved by a 6-0-1 vote.
Of the 24 speakers, about nine expressly supported the measure to expand the SID from 138 downtown properties to about 440 properties throughout the city. About eight did not explicitly support or oppose it but sought more information, questioning how specifically the added tax revenue would be spent or what benefits properties outside downtown would see. Another seven or so seemed opposed to the measure though most of them also requested more specific information. At the risk of generalizing, supporters tended to be residents or business owners in or near the current district while others appeared to be residents or business owners with properties outside the current SID boundaries.
The expanded SID budget will pay for things “above and beyond what the city does in the regular budget,” City Administrator Cherron Rountree said. Special events would be just one component but also possibly include larger capital improvements.
SID programs would focus on business development, including microloans, facade improvements, marketing grants and other efforts around business retention and attraction, such as possibly hiring a commercial broker to “look at the city holistically,” in a effort to decrease vacancies. She explained some other details about the expanded SID in an interview with Rahway Rising last week.
The budget process would be managed by a separate agency, currently the Rahway Arts District board, but Rountree said the city can make recommendations. Among the initial suggestions will be to change the name to the Rahway Development Company “to better encompass what the agency does.”
The tax rate is not set until the budget is approved. The current SID has a tax rate of $0.351 per $100 of assessed value but another recommendation will be to cut it to about $0.30. The average tax among properties assessed at less than $1 million would be about $981 per year, according to Rountree. The previous budget has been about $130,000 annually. An expanded SID is expected to be in the range of $600,000 to $700,000 annually.
Residential properties with four or more units would be included in the expanded SID. Whether new developments that have a PILOT (Meridia Water’s Edge, Metro Rahway, Meridia Lafayette Village) will be included is still to be determined. Rountree said the individual agreements would have to be reviewed to see if they legally can be included. Merck would not be included because it is in its own research and development zone, she said.
There’s been a lot of research that was not merely done overnight and the city has been as transparent as it can be in the process, Rountree said, but holding up the expansion would set everything back a year. The list of affected properties (which can be found within the ordinance) has been available at the City Clerk’s Office, she added.
Eric Rickes of Maurice Avenue and Raffio Giacobbe of Midwood Drive were among the most fervent opponents, questioning the legality of expanding the SID citywide and threatened to go to court over it. “It sounds like the arts community is trying to hijack the rest of the businesses,” he said.
Giacobbe, grandfather of 6th Ward Councilman Raymond Giacobbe, Jr., suggested that he’s probably the largest property taxpayer in Rahway after Merck. He supports the city and has been paying SID taxes for years but said it seems the budget is overextended, also citing numerous vacancies downtown. He preferred the city increase taxes generally to support activities rather than create such a large SID.
City Attorney Louis Rainone rebutted speakers who questioned the legality of expanding the SID, saying it’s not unusual for all businesses to be in a SID. If the governing body does not act now, he said it would jeopardize 2015 funding. “It’s not as simple as putting it off,” he said.
Chamber of Commerce President Andy Baron asked for more time to consider the structure and cost of the SID, saying he received many calls from people asking what the impact of a new SID would be. He suggested the governing body consider splitting the SID into three to represent the divergent interests of smaller downtown merchants, St. Georges Avenue properties and larger businesses on Routes 1&9.
Supporters of the ordinance encouraged City Council to expand the budget as a way to advance Rahway amid economic competition from neighboring towns. Several business owners said they came to Rahway because of the potential they saw in the city. Pablo Verona, who owns Cubanu on Main Street and previously served on the Rahway Arts District board, said he’s seen the benefits of city events and the camaraderie and has invested his life savings in the community.
Hamilton Street resident Brian Remo was drawn to Rahway for the arts and affordability. As artistic director of Fearless Productions on Irving Street, his theater company brings people to town, he said, and urged expanding the SID because sooner or later, neighboring towns will do it and be ahead of Rahway. “If you don’t think it’s the answer to Rahway becoming what it can be, I believe you’re wrong,” he said.
Jacqueline Duboys of Central Avenue relocated her company, Wizdom Media, seven years ago from New York City’s Chelsea neighborhood. She expressed “unwavering support for the expansion” of the SID based on her experience with the current SID, and others should share in the costs as well as the benefits.
Michael Weaver of Irving Street has been improving the three multi-family homes he owns to improve Rahway. He questioned expanding a tax to almost 10 percent of the properties in the city to “fund some vague new projects you’re going to come up with. I’m all for investing in Rahway, what you’re investing in is distant.”
Third Ward Councilman Robert Bresenhan was among the few council members to speak before a vote took place. “I see this as a linchpin to bring us into the next decade,” describing Rahway as being in “a holding pattern” in recent years. It is an additional assessment, he said, but one that he believes will see the benefits in the coming years.
Ordinance 0-42-14 is a blatant attack on the long term landlords of Rahway. These are the primary investors in Rahway, those who engage in the arduous and costly task of maintaining and improving the rental housing stock of the city in order to attract stable working people to the city. The sort of people who may integrate with the community and in time raise its economic vitality. Any one who has actually managed property in the city can attest that a store front is a difficult proposition. Apparently, the folks residing in the newer high density developments are not supporting the business economy though the developers themselves are undoubtedly enjoying hefty property tax breaks provided by the generosity of the local government while the actual financial burden is borne by the longer term property holders. The city government would now increase this imbalance with further uneven taxation asking that the targets of that taxation have faith in the government’s probity, wisdom and foresight. That is a cynical joke.