Mayor David Roberts went before the Hoboken Chamber of Commerce Tuesday morning to encourage them to support the designation of Hoboken’s business district as a Special Improvement District.
An SID is a state-approved zone where the city can levy a special tax on business owners that goes to district improvements, advertising, and maintenance.
Since taking office, Roberts has lobbied for the creation of an SID because he says it will provide more funding for the promotion of Washington Street and the city’s business district.
But before giving its approval, the business community has questions about the extra tax and the control of funds.
Not an easy sell
The business community has been fairly divided when it comes to the idea of an SID.
Chamber of Commerce member Brian Battaglia, who owns Battaglia’s Housewares & Gifts on Washington Street, said that he appreciates that City Hall is taking an interest in the retail district, but will need much more information.
He said he is worried that city services such as garbage collection and police salaries could be pawned off onto the business owners, many of whom are already struggling to turn a profit and pay their rent.
He also said he sees the advantages of having a full-time SID administrator, but he is concerned that the body would become “tangled in politics.”
Roberts responded that the city has no intention of “commandeering this SID,” and that its management would be run by area retailers and business owners.
“I do not want the city government running the SID,” Roberts said. “That will be up to the business community.” Jack Talbot, the owner of Court Street Restaurant, echoed Battaglia’s reservations.
“Are we going to be moving city services, which will create a greater burden for the business community?” Talbot said.
But Charles Lallo, owner of Eartheart Herbals & Natural Food Supplements, said that an SID will bring together the business community and provide a valuable service.
“In my view, the problem is in the marketing,” Lallo said. He explained that Hoboken has many advantages, but the business community has not come up with a comprehensive plan for marketing the city’s assets. He added that an SID would go a long way towards this goal.
“We have many challenges facing our business community,” Roberts said Tuesday, “and right now, we don’t have the resources necessary to manage such a voluminous aspect of our city. We sorely need a fully integrated, cohesive marketing plan so that all boats will rise.”
Many longtime businesses have left Washington Street in the last two years due to rising rents or the fact that the buildings containing the businesses were sold at a high price. This has led to a lack of business diversity along Washington Street. Cell phone stores, nail salons, and banks, which can afford the higher rents, are beginning to outnumber smaller, locally owned retail business.
And then of course, there is the always the troublesome lack of parking.
Fred Bado, the city’s director of Community Development, said Tuesday that Hoboken residents have $700 million is disposable income.
“We have to get the word out that Hoboken has a lot to offer in the way of goods and services,” Bado said.
How does it work?
According to Bado, the city would hire a consultant who would help the Chamber of Commerce and local business owners create the framework for the SID. Bado said that there are around 70 to 80 New Jersey municipalities of all sizes that have SIDs.
The city would have had to apply to the state to become an SID, but it would ultimately be up to the business community to decide if they want one.
“The mayor or City Council can’t put an SID together alone,” Bado said.
Bado added that an SID can have a budget from $20,000 to several hundred thousand dollars.
“It’s all depends on what the SID Board decides how much it wants [to tax] and what the money should be used for,” Bado said.
Roberts said that the SID could have a full-time staff dedicated solely to growing and attracting business. “These are complicated issues that need the attention of a full-time professional oversight,” Roberts opined. “This is a person that becomes an activist for the business community.”
Once an SID is established, the tax assessment is mandatory, collected by the city like any other tax and used according to the SID board. Ultimately, the consumers might end up paying for that added cost, some merchants worry.
This isn’t the first time that the idea of an SID was considered. In the late 1980s and early 1990s, the city attempted to create an SID, but that movement never got off the ground due to public opposition.
Next step
Tuesday’s round table discussion was the beginning of what will likely be an ongoing debate. If the mayor is able to garner support, the SID could be established by the end of this year.
If not, Roberts might have to look for other options, such as having the city hiring a professional to manage the business district full-time. But for a city that has been struggling with a growing budget, that might not be his favorite option.