Special improvement districts: back to the future - Statistical Data Included

Selling the idea that property owners should impose upon themselves a special tax to pay for services that were once primarily the province of government is not a task for the fainthearted. But if urban commercial districts are to survive and even flourish special improvement districts, or SIDs, may be the only viable solution.

One of the economic realities facing property owners and businesses is that most municipalities are cutting back on services to ease heavy tax burdens or pay for the escalating cost of services. Creating working partnerships between government and the private sector emerges as a common sense approach where everyone has a stake in economic revitalization.

Additionally, some districts have earned the reputation as inhospitable places to operate a business. This perception grows as the higher costs of doing business in urban locations outweigh, in some people's minds, the larger market. Additionally, it would be too costly - and not highly effective - for individual property owners to launch their own marketing campaigns. Thus, joint marketing efforts are critical to counter widespread negative perceptions.

Furthermore, the private sector and government who need each other to create a positive business climate often speak a different language and operate on different timelines. Government moves more slowly due to the many checks and balances inherent in a bureaucracy. There needs to be a viable mechanism for a public/private partnership to work.

Like many central business districts, Journal square fell on hard times due to stiff retail competition from nearby malls, a general change in retail shopping habits, and the development of the Jersey City waterfront. This once vibrant hub of transportation, retail, entertainment and commerce was struggling in a very competitive and ever-changing marketplace.

Four years ago, business people, property owners, merchants and the city administration banded together to form the largest downtown special improvement district in New Jersey. There was broad agreement that Journal square needed a major facelift if it was to compete for retail and office rentals in today's marketplace.

A plan was created and a sweeping $7.5 capital improvement program was begun. Slated for completion in the spring of 1999, Journal square's public spaces will be transformed with new lighting fixtures, brick-paved sidewalks, a pedestrian plaza with a fountain, and the planting of trees and shrubs. The restoration of the 1929 art deco-style Loews Theater, an historic landmark in the downtown area, once completed will again attract large numbers of people from around the region for shows and concerts.

Since the SID was formed, we have invested millions into programs aimed at making the area cleaner and safer. We created a 21-person security force to patrol Journal square seven days a week and 14 hours a day. In fact, Rutgers University conducted a report last year that showed crime has dropped off significantly in the square, and the quality of life improved for businesses and residents in the square and surrounding areas since we implemented tighter security measures.

Several officers have even emerged as heroes when they rescued over a dozen people trapped in a collapsed building last January. Our maintenance crew keeps the streets clean and the walls graffiti-free, making the district more attractive for shoppers and office workers. People feel more confident walking the streets, and business has improved.

Encouraging signs that our efforts are beginning to pay off include:

* Hartz Mountain Industries has plans for a 600,000 square-foot office building in the heart of Journal square.

* Developers specializing in distressed properties recently renovated a 115,000 square-foot vacant building, and it is now 80 percent occupied.

* The Earle Hotel, vacant for over a decade, is being developed into 40 market-rate residential rentals units.

* Hudson Community College is expanding, with a 32,000 square-foot building under construction, and will eventually increase its presence from 165,000 square feet to 500,00 square feet over the next decade.

* National retail chains are opening new outlets on our retail strip.

While a strong economy and the city's commitment to redevelopment has made it possible for us to begin our revitalization efforts, several other factors have contributed greatly to our success.

First, we have a strong, committed board that has remained focused and unified. The board includes a cross-section of the property owners - from the largest corporations to the smallest retail stores. Board members have committed themselves to a common set of goals and objectives. We have created a win-win scenario.

Second, we have set workable goals. We have also established our priorities carefully and have not over-promised what we can achieve. Founding members also worked very hard at selling the concept of a business improvement district prior to creating an organization.

Third, we have focused on doing the job right the first time. We knew that our credibility as an organization was on the line and we couldn't afford to lose it. We delivered the services that we promised. Of course, we had to overcome some skepticism, but nothing does that like results.

The bottom line is that businesses have a financial stake in the communities where they operate, and SIDs can create a safe and attractive environment for everyone involved. Special improvement districts are a solid investment for property owners, businesses, merchants, municipalities and communities alike.

COPYRIGHT 1998 Hagedorn Publication
COPYRIGHT 2004 Gale Group