Linden SID expansion is considered

LINDEN, NJ — When Derek Armstead was sworn in as mayor in January, one of the initiatives he hoped to accomplish was expansion of the Special Improvement District, but it appears the council is not all in agreement quite yet.

In January, during his inaugural State of the City address, Armstead made a point of noting that Linden was entering 2015 with a $3 million budget deficit and there would be hard choices to make in the year ahead.

One of the initiatives he felt would help make up this deficit was expanding the SID from the downtown to include Aviation Plaza and other businesses along Route 1. He felt the revenue generated from the additional SID assessment tax would help the city with public safety efforts in that area.

Armstead explained this revenue could be used to hire new police officers that would be assigned specifically to the Route 1 corridor in Linden where crimes are often committed by people living outside the city.

Recently, though, when Armstead put a resolution on the agenda to explore this expansion with a study, the measure was pulled without explanation. The mayor was confused by this and questioned it at public meeting recently.

“In January I mentioned one of the things that would help offset the budget deficit was the creation of a SID from Park Avenue to Route 1,” he said, adding, “we thought this was a very good idea and I think it’s a good idea because this particular area puts a terrific strain on our police department.”

The mayor explained to council he thought one of the ways to offset the cost of this financial strain on the police department was to create another SID or to expand the present one.

“By assessing the businesses in this area a little more money we could justify the extra cost of police officers,” Armstead said, but stressed these businesses would also benefit.

“They could make changes to their facades, which I think is a good thing,” he said, admitting he was confused by the resolution for a study being pulled from the agenda.

Armstead said the resolution was specifically to have a study done exploring the feasibility of such an expansion, not to expand or form a second SID.

“I think this would be a good thing because other towns, like Carteret, have done this and been successful,” the mayor told the council, mentioning he heard a very encouraging presentation about how expansion of the SID helped this municipality.
“It’s one thing to pull something from the agenda but not to give a reason is another,” Armstead said.

“We have a job to do here and that is to move the city forward,” he added, pointing out city taxes are “out of hand.”
Armstead said if council members were not in favor of the move, they needed to start a dialogue with him so he understood their objections.

“If the reasons are good I’d be the first one to walk away from it and say you have a valid point,” he told council, adding that after six months as mayor he would like to see some of his initiatives move forward.

At the meeting, 3rd Ward resident Monique Caldwell stepped to the microphone to support Armstead’s initiative, questioning what took place.

“Mayor Armstead has given us an option for safety. Why was this pulled from the agenda?” she asked, adding “please don’t tell me you are saying he is not doing anything and you are setting him up to fall.”

“He wants to do a study, which is smart. Does the council know what a study is? What’s the problem council? He needs your support to move forward,” Caldwell added, but the council remained silent on the matter.

Monday in an interview with LocalSource, Council President Jorge Alvarez admitted he did not respond to the mayor at the meeting but said Armstead was aware of why he pulled the resolution.

“Yes, I pulled the resolution,” the council president said, explaining he had no other choice because the mayor did not include a cost for the study.

“I spoke with the mayor before the meeting and told him that we have been talking about this for two months but the council couldn’t just approve a resolution without a cost for such an expenditure included,” Alvarez said, adding he also told Armstead that as soon as they had a cost the resolution would be back on the agenda.

“We can’t vote on something without a cost. That would not be fair to our taxpayers,” said the council president, confessing he had other concerns about this move.

“We don’t want retaliation like Rahway had when they expanded their SID,” Alvarez said, adding, “I prefer to go slowly, expand the SID a few blocks at a time and see how that goes. You have to learn from what other towns have gone through, and Rahway is a good example of the retaliation that can happen if you expand too quickly,” he said, noting that the last thing he wants to see happen is business owners getting up in arms.

“We want to keep businesses and get new ones to move here, not scare them away,” the council president said.
The council president also pointed out that while the mayor’s heart was in the right place about increasing public safety in the Route 1 corridor area, any special assessment tax generated from an expanded SID would have to go back to the businesses.

“There are laws involving how SID dollars are spent and you can’t hire police officers with this money. The purpose of a SID is to put the money back into improvements for the businesses and marketing,” Alvarez explained.

The council president also noted that following the meeting the financial committee looked into what a study would cost and while the numbers were not firm, he estimated it would be somewhere around $27,000.

Armstead is not treading on untested ground here. In fact, Linden actually follows a long list of towns who have or are in the process of expanding their SID’s in various ways. Some manage to do this successfully, while others, like neighboring Rahway, become mired in legal disputes.

In December neighboring Rahway made a bold move by increasing their SID businesses from 138 properties to 583. The move, though, was immediately met with resistance and a lawsuit was filed earlier this year by a faction of business owners who claim the move constituted a “scattered site SID.”

The attorney representing these business owners maintains there is no municipal, state or any other law that allows a municipality to create a scattered SID, let alone one that is not “contiguous” to the original 138 members located in the downtown area. This case is still pending in court.

Towns like Union and Springfield have spent years trying to get their SID’s rolling, but so far only Springfield has discussed venturing into a non-contiguous SID, or one that is not located completely in one area of town. Meanwhile they have refocused efforts on redevelopment in the designated SID area along Morris and Mountain avenues.

SID’S are nothing new in New Jersey. More than 25 years ago Cranford was the first to form a SID in the state and while it was no easy feat, this municipality went on to find a successful niche market for their downtown. Cranford also took a chance on two large public-private partnerships for downtown redevelopment projects, Cranford Crossing and Riverfront.
While both projects had their share of problems, delays and roadblocks, they were built and have prospered, generating increased foot traffic to the downtown area.

In June at the 2015 Downtown NJ Annual Conference, “Your Downtown: The New Frontier,” Cranford’s economic development director Kathleen Miller Prunty, who has been managing Cranford’s SID for 18 years, explained in a June 15 NJBIZ article how they are now faring.

“Through the most difficult times Cranford had and still has a vacancy rate that hovers between 2 and 3 percent,” she said, noting the downtown “became a real magnet for independent business owners that were looking for a safe, clean, inviting downtown.”

Rahway Mayor Samson Steinman, whose town hosted the conference, explained that despite the roadblocks, expansion of his city’s SID was critical.

“It’s great if you improve your downtown business district, but when you are driving through other area’s of town, if those areas are desolate, run down or are not functioning properly, it gives a negative vibe. With the expansion of our SID, we’re looking to work on every single business in town,” NJBIZ reported.

However, Stuart Koperweis, co-chair of the conference and executive vice president of economic development and revitalization of Millennium Strategies in Caldwell, wanted all professionals, including SID management staff, public officials and real estate planning experts, to understand one important factor.

“Special Improvement Districts work hand and hand with the government to make recommendations and changes in terms of various ordinances that would allow businesses and property owners to grow,” he said, noting that while they don’t have control, they have a voice and the financial ability to support change.

This delicate public-private partnership was a popular topic among the various panels and discussions held at the conference, NJBIZ said.

Mark Sokolich, mayor of Fort Lee, stressed at the conference the importance of forming a political consensus before starting a SID, or expanding one.

“I don’t need someone with a political or personal agenda,” Sokolich said, adding “I needed folks that were unconditionally committed to Fort Lee and that was their only motivation.”

Seth Grossman, the founder and director of Rutgers University Newark’s National Center of Public Performance’s Institute of Business District Management left those at the conference with one important thought to consider.

“We are of government, but we’re not in it,” Grossman said. “We sit, as I said, at the crux between public interest and all of the private interest at the street level, where the rubber meets the road. We bring the private sector into a very public process. And that is a good thing. That’s how we get things done.”