There are now about 40 special improvement districts in the state of New Jersey. Princeton Borough is considering joining that list.
By: Jennifer Potash
As Princeton Borough considers what direction to take in redeveloping its downtown, several New Jersey municipalities have already grappled with the same questions and chosen to create special improvement districts.
Red Bank in Monmouth County, Westfield in Union County, and Montclair in Essex County have either established or are considering a special improvement district.
Commonly referred to as a SID, such a district is a specifically bounded area in which a special assessment is collected on properties to generate funds for marketing, beautifying and redeveloping the district.
For several years Princeton Borough Mayor Marvin Reed has raised the idea and led discussion on the matter, only to see it dropped.
Borough Merchants for Princeton, a voluntary group comprising downtown business owners and merchants that seeks to market the downtown, invited the mayor in January to discuss how a special improvement district might benefit the downtown. The group listened to the presentation, but has not come to a formal position.
Other municipalities in central and northern New Jersey, however, are using SIDs to redevelop and revitalize their downtowns.
There are now about 40 SIDs, ranging from suburban centers such as Westfield to major cities such as Trenton and Newark.
Westfield established a SID in 1996 after facing high turnover in the businesses downtown, said Michael La Place, a former director of the Westfield Development Corp. who is now director of community development in Plainsboro.
With an annual budget of $300,000, the Westfield SID sought to beautify the downtown with better landscaping and sidewalks as well as more readable street signs and street maps, he said.
The SID has worked to strike a balance between keeping locally owned stores and attracting larger chain stores.
When the Banana Republic clothing store sought to renovate a 1920s movie theater, Mr. LaPlace said, a deal was worked out for the theater’s renovation while the clothing store moved to a larger space down the street.
Red Bank was facing economic devastation in 1991 when it established a SID, said Mary Mann, executive director of Red Bank River Center, which manages the SID.
"They used to call us Dead Bank," Ms. Mann said.
Ten years later, she said, Red Bank has no vacancies and a parking problem the Red Bank Borough Council will vote next week on a proposed $8.4 million, 570-car garage with retail space on the ground floor.
The SID in Red Bank, which is made up of eight to 10 blocks, initially gave matching grants to property and business owners for facade improvements to the turn-of-the-century Italianate architecture, Ms. Mann explained. The projects of the SID, which has an annual budget of about $400,000, include streetscape beautification including Victorian lanterns and lamp posts, brick sidewalks and benches, she said.
All off these SIDs have an annual budget approved by the municipal governing body, and elected officials usually serve on the SIDs’ board of trustees.
Montclair will begin public hearings this week on establishing a SID, said Helen Mazarakis, executive director of the Montclair Economic Development Corp. A community with lots of art galleries, theaters and a museum, Montclair is seeking ways to preserve its eclectic downtown, she said.
The Economic Development Corp., a separate entity from the municipality, has run special events and fund-raisers, including a Montclair Visa card, all aimed at downtown beautification projects.
With five downtown districts, Montclair needs a mechanism to address the downtown facade improvements and parking problems, she said.
One potential problem that can erupt in the creation of a SID is when a major downtown player wants no part of the program.
In Red Bank, a large downtown property owner didn’t want to be included and filed a lawsuit, Ms. Mann said. The entire section of the downtown was excluded from the SID, she said.
Palmer Square Management, the largest property owner downtown, has asked not to be included in Princeton Borough’s proposed SID. The management corporation participates in a cooperative program for shopping centers called Community Area Marketing and Maintenance with a budget several times what is proposed for the Princeton Borough SID, said Teri McIntire, director of marketing for Palmer Square Management.
Palmer Square would be supportive of the borough’s efforts to establish a SID as a complementary effort, said David Newton, vice president of Palmer Square Management.
Without the largest property owner’s participation, the SID idea is not likely to get far in Princeton Borough, according to Lawrence Houstoun Jr., a principal with The Atlantic Group, a Cranbury-based urban development consulting firm that has set up SIDs in Red Bank, Trenton, New Brunswick, Freehold and other municipalities in New Jersey and other states.
A municipal ordinance proposed by Mayor Reed last year would have established a SID, designating the retail and commercial properties in the central business district, including Palmer Square as well as portions of Nassau Street to Harrison Street, for commercial purposes and the encouragement of economic growth. Commercial properties would be assessed at 15 cents per $100 of assessed value, providing for an annual budget of about $300,000, under Mayor Reed’s proposal.
Such a budget would allow a SID to hire staff, work on beautification projects, such as snow removal and sidewalk cleaning, and create special events to market the downtown, the mayor said.
Traditionally, Princeton Borough provides some of those services but the financial reality of a stagnant tax base may mean the borough will be unable to do so in the future, Mayor Reed said.