Group asks Council to form downtown management organization

March 22, 2016: Deborah Zupan, co-owner of Marafiki, a fair trade business that ran out of a storefront on New Street, believes her store would still be open if Metuchen had a downtown management organization in place to help small businesses.

Marafiki closed its doors about three weeks ago and Zupan and her partner Linda Koskoski are running the business online.

“If we’d been operating our business while such an organization existed, we’d still be open today,” Zupan said at the Borough Council meeting Monday. “Any downtown retailer no matter how great they are is going to have a hard time surviving if there aren’t other downtown retailers or other attractions to draw customers there as a destination.”

Having a downtown management organization in place to help promote the business district would have been helpful, Zupan said.

The idea of forming a downtown management organization took center stage at the Council meeting. The volunteer stakeholder group trying to bring this idea into reality asked Council to consider an ordinance to form the downtown organization as well as approve the boundaries of a business improvement district inside of which commercial property owners would pay an annual fee on real estate taxes.

Members of the stakeholder group, including Jan Margolis, who spoke Monday, believe the downtown management organization is the best way to deal with the growing number of vacant storefronts downtown.

The organization would help promote the business improvement district, maintain it and keep it clean and perhaps most importantly, figure out the right mix of businesses for the district, help bring in new businesses and retain those already there.

Council took no action at Monday’s meeting. Mayor Peter Cammarano said Council will formally discuss the idea at the next meeting. If Council decides to move forward with an ordinance, there would be an introduction and then a public hearing at a later meeting, Cammarano said.

“There will be plenty of time for public comment,” he said.

To review, the idea is this: Council would pass an ordinance creating the downtown management organization, a non-profit called the Metuchen Downtown Alliance led by an executive director and a board of directors.

The organization would be powered by volunteers who would contribute to things like communications and public relations, education, fundraising, design, marketing, beautifying the district and retention of businesses.

The organization would have a $275,000 annual budget, about half of which would pay administrative costs, including the executive director’s salary of $60,000 to $70,000 a year. About 27 percent of the budget would go to capital improvement projects in the district, with the balance going to things like holiday decorations, marketing and recruitment and retention of businesses.

The funding mechanism for the organization is a structure called a Business Improvement District — a pre-defined area inside of which commercial property owners pay an annual fee on real estate (which would likely get shared by merchant tenants). Residents would see no tax increases as part of this process.

The proposed BID would include properties fronting Main Street from Durham to Amboy avenues; from the train tracks to properties fronting Middlesex Avenue; the Sportsplex; the Whole Foods development; the Woodmont redevelopment; and the Forum Theater. The BID can be adjusted to fit the needs of the community, said Eric Berger, a member of the stakeholder group, at a prior meeting.

In 2016, the half-year budget would be $150,000, solely from the borough through the Parking Authority sale of the Pearl Street lot. Next year, the funding would be split: $150,000 from the Parking Authority and $175,000 from the business district assessment.

This ratio would continue to shift from the borough to the BID, until 2020 when the borough would pay $75,000 and the BID would raise $200,000.

Property owners in the district would ultimately pay a fee of 5 percent of real estate taxes, phased in over several years. For example, in 2017 property owners would pay 3.2 percent of real estate taxes. That would increase to 5 percent of real estate taxes in 2020.

One business owner, Nancy Jessen of Victorian Office Rentals on Main Street, opposed the plan, calling it a “tax increase.” Jessen started an online petition opposing the idea. that had 24 supporters as of Tuesday.

“We don’t need a $275,000 bureaucracy,” Jessen said.

She said instead of hiring an executive director to help guide new business owners through code approval processes, make those processes easier to deal with. Also, she said marketing, a big function of the management organization, can be handled today by business owners for low cost online, through social media, which can target specific audiences.

For more information, visit Metuchen Downtown Alliance’s website.

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One thought on “Group asks Council to form downtown management organization

  1. Pingback: Opinion: With MDA approval, progress wins | brainyboroblog

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