As UEZ Funds Run Out, Spending Priorities Cause Friction Between SID and the City
As money once pegged to revitalize the economic outlook of struggling urban areas has begun to dry up, how the remaining money is spent has come under close scrutiny by the beneficiaries of a program that has been immensely popular at the municipal level.
Special Improvement Districts couple this government funding with a self-imposed tax levied on the participating members in order to pay for additional services such as more waste management services, police protection, and promotional initiatives.
But when Governor Chris Christie decided that these programs hadn’t proven to be successful by his accounting, he opted to redirect money away from UEZ initiatives, and local control, and move the money back to the general state budget.
Now the Central Avenue SID, which recently voted to continue on for at least two more years despite a drying up of funds, is arguing the city is mismanaging the remaining money. With a limited budget, CASID says they were forced to end special sanitation services that businesses count on.
“Ending CASID’s sanitation program after twenty years of service to the community is an agonizing, but necessary, decision because the merchants and commercial property owners on Central Avenue no longer have the resources to continue,” CASID President Michal Yun wrote in a letter to Mayor Jerramiah Healy last November. “As a reminder, SID programs exist to supplement, not substitute, municipal services.”
According to Gilbert Mendez, owner of the Mendez Travel Agency, there will be a direct impact to running a successful business in this “difficult economic climate.”
Business, he says in a statement, “will have to spend less time with customers and more time sweeping sidewalks, not just to keep the district clean, but to also avoid the aggressive code enforcement policy the cash-strapped city has succumbed to recently.”
In the past, the city would use UEZ funds to match the amount raised by an SID, which representatives of CASID say was $93,000. This year, that funding dropped to $50,000.
Yun, who is running for the Ward D Council seat in May’s election, notes that the remaining $2,000,000 of UEZ funds are pegged for private loans, but should be distributed to SIDs so they can continue these services.
But city spokeswoman Jennifer Morrill says the problem lies with the governor, not with city.
“There has been no bigger proponent of the Urban Enterprise Zone program than Mayor Healy, who has on numerous occasions advocated for the UEZ before the legislature and to the Governor directly. However, despite this, the Governor chose to abolish the program, which in Jersey City helps fund the Special Improvement Districts and many other UEZ-funded programs,” said city spokeswoman Jennifer Morrill.
“How the Central Avenue SID chooses to spend its UEZ funding – $50,000 for FY2013 – is entirely up to that organization,” she adds. “Despite the fact that the CASID is opting to terminate its sidewalk sweeping program, the JCIA’s street sweeper operations, litter basket emptying and graffiti removal programs will still be in effect on Central Avenue and throughout the city.” In other words, the city is doing its part.
Some of the loan money Yun is taking issue with is used to help start new businesses, says Cliff Adams the Chief Financial Officer of the Jersey City Economic Development Corporation.
“The most recent loan granted using these UEZ revolving loan funds was to Advanced Built Structures, a new business located on Pacific Ave. that manufactures and installs pre-fabricated light gauge steel panelized walls used in building construction,” he said. “There are currently over 50 skilled blue collar workers employed at ABS. Another example is a loan to facilitate the start-up of GP’s Hamilton Park.”
The JCEDC has been managing UEZ funding for business loans since the program started in 1996, he adds, with money given out according to proposals geared towards job creation and retention.
Unless the next governor opts to reinstate the UEZ program, SIDs will soon have even less than the $50,000 they were each awarded this year, potentially stymieing up-and-coming economic areas of the city.