The sun may be setting on New Jersey’s 36 Urban Enterprise Zones (UEZ). The state program allows businesses in certain urban areas to charge a low 3.5 percent sales tax to lure customers, then allows the money to be used to improve the safety and look of the district.
But Gov. Christopher Christie’s 2011-2012 proposed budget, released on Feb. 22, would divert over $90 million in UEZ funds toward the state’s $10.5 billion budget deficit. In addition, a state consultant report released two days after the budget address said that UEZs have little impact on local economies.
Union City and West New York both have UEZs, and local officials have been wondering about the impact of the cuts.
Union City UEZ Coordinator Amada Avila said that since Gov. Christie took office, the “writing has been on the wall” about UEZs.
History
The program was implemented in 1983 by the New Jersey Department of Commerce and Economic Development to revitalize “blighted” urban communities through their commercial districts.
“There will be immediate negative effects … unless the government has devised a back-up plan.” – Amada Avila
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For now, the UEZs are still functioning, with businesses and shoppers in the zones continuing to benefit from tax discounts and exemptions, but questions regarding the program’s future abound.
West New York UEZ Coordinator Oscar Miqueli has received several phone calls from concerned residents. But also in the dark, according to Miqueli and Avila, are the cities’ UEZ coordinators themselves.
Both say they know nothing more than what’s been released in the press.
“[As of] today, [I have] not been informed. Someone in Trenton knows what they are planning to do. They’re letting it out in bits and pieces,” Avila said. “What does it mean? Your guess is as good as mine.”
One thing clear to Avila and Miqueli is the detrimental impact dismantling the UEZs could have on both municipalities.
Miqueli describes the potential effect as “devastating,” which, according to Avila, would be felt immediately if no successor plan is put in place.
UC and WNY UEZs
UEZs usually comprise 30 percent of a participating city, and are located in the commercial portions, within a continuous boundary.
Hudson County has the most UEZs of any New Jersey county, with zones in Union City and West New York, as well as in North Bergen, Guttenberg, Jersey City, Bayonne, and Kearny.
Union City and West New York’s UEZs contain a large concentration of retail and chain stores on Bergenline Avenue, which is the longest commercial avenue in the state and the main commercial strip for North Hudson.
According to Avila, there are roughly 180 UEZ-certified businesses in the main UEZ commercial district in Union City, which entails Bergenline Avenue from 49th to 15th streets, 32nd Street from Bergenline Avenue to Kennedy Boulevard, Summit Avenue from 18th to Fifth streets, and Paterson Plank Road from Fifth to Seventh streets.
West New York’s UEZ covers Bergenline Avenue from 49th to 67th streets, Kennedy Boulevard, 60th Street from Park Avenue to Kennedy Boulevard, and portions of connecting streets.
Through the program, Union City and West New York have long encouraged businesses – especially smaller ones – to set up shop within city limits.
“The program was created to help small businesses, ‘mom and pops’ [in urban communities], which is what most of my merchants are made up of…and you cannot get more urban than Union City,” said Avila, who conducts the monthly recertification and update of all UEZ businesses in Union City.
Repercussions
Business owners and shoppers aside, Union City and West New York have relied on the program for revenue to reinvest without raising taxes. That revenue is now in state hands, but Avila and Miqueli point out how important it was for the two municipalities.
The money, said both, has gone toward upkeep and safety projects, as well as marketing campaigns.
A lot – $30,000 each year – went toward maintaining Union City’s UEZ area and keeping it clean, according to Avila. The money also paid for Department of Public Works equipment, as well as planters, banners, and holiday decorations for the area. (Many parades take place on Bergenline Avenue.)
West New York reinvested in similar projects, including the implementation of a UEZ police force to lower crime, and for beautification projects.
“Improvements still look brand new after years,” Miqueli said of recent work on the town’s UEZ area, which comprises 35 percent of West New York. “Many people are very happy [with the work derived from UEZ funds].”
A large amount of money went into marketing and promoting the area, which Miqueli said was important for his town due to its confusing name.
“With the tools provided by the UE, we were able to market that we are West New York in New Jersey, not western New York,” he said.
Funding for marketing was important, confirms Avila.
“In the present economic condition, the city of Union City would be unable to spend money on marketing,” she said.
What’s in store for UEZs?
The state report, which claims that the UEZ program is too expensive for its inconsistent results, may be a signal that the end is near.
But what the “end” may entail remains unknown – at least for the UEZ coordinators.
Avila and Miqueli had yet to see a copy of the survey by Feb. 28, and don’t know if another plan will be put in place. Even the future status of their jobs remains unknown.
“Only [the Christie administration] knows what they’re planning,” Avila said.
Avila hopes that rumors of a place-based community and economic development program may prove true if the UEZ program is to be dismantled.
“There will be immediate negative effects on [Union City and West New York] and taxpayers unless the government has devised a back-up plan to help urban cities,” she said. “Just doing away with the UEZ program is not good. It will put us in a worse condition than [we were in] 15 years ago.”
Christie’s budget proposal still has to be approved by the state legislature.
Deanna Cullen can be reached at dcullen@hudsonreporter.com.