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Business owners urge downtown alliance in Metuchen

BY KATHY CHANG
Staff Writer

METUCHEN — If a Metuchen Downtown Alliance organization had been in place, Deborah Zupan and Linda Koskoski, co-owners of Marafiki Fair Trade, said they believe their storefront on New Street would have survived.

Zupan said she and Koskoski assessed what went wrong with their storefront business, which they opened in 2011 and closed last February.

“No downtown retailer will survive if there are no other downtown retailers or other attractions to draw customers to our destination,” said Zupan.

The duo said their business, a Fair Trade retailer of unique, ethically sourced products such as jewelry, clothing housewares, textiles, and much more is now selling at events, festivals, and online.

Zupan and Koskoski said they support the formation of a Metuchen Downtown Alliance (MDA).

Zupan said one of the many charges of a MDA is to recruit and connect with complementary businesses.

“This benefits everybody,” she said. “Additionally small business owners have a thousand things to do every day from constantly picking up the very abundant trash on sidewalks to marketing and everything in between.”

Zupan said having an organization on hand that would have taken care of beautifying the downtown and just there to support the small businesses would have been a tremendous help for their storefront on New Street.

Jan Margolis, a member of the Metuchen Area Chamber of Commerce and Eric Berger, principal of U.S. Real Estate Acquisitions, LLC in Metuchen and Somerville, presented their recommendation for an ordinance to name the Metuchen Downtown Alliance to be the management organization for a new downtown improvement district at a Borough Council meeting on March 21.

Margolis and Berger are part of a stakeholder group for the MDA.

Mayor Peter Cammarano said there will be plenty of time for the public to comment on the MDA proposal in April.

The Township Council will hold a public hearing on the ordinance for the MDA on May 2.

Margolis said the stakeholder group for the MDA held a series of public forums and small group meetings, which drew many people and many “thoughtful questions” were asked which she said have been incorporated into the proposal to the council.

The concept of a MDA has been discussed several times in Metuchen since the 1970s and Metuchen’s Development Commission has historically advocated for a downtown management organization, Margolis said.

High vacancy rates, struggling businesses, tired streetscapes, and difficulty parking are some of the reasons why the MDA stakeholder group is pushing for the organization.

“We have seen new businesses come and go within six to nine months,” said Margolis adding that the current downtown businesses have said they gain 80 percent of their income on the weekend due to lack of pedestrian foot traffic. “Also new development is threatening existing businesses if there is no centralized coordination for marketing and management for the downtown.”

Margolis said that with a MDA, it could help revive the Metuchen Forum Theater, one of the only single screen privately owned theatres in the state, which had been on the market for sale.

“It has been taken off the market,” she said noting that the owner, Peter Loewy, is hopeful that the MDA can revive the performing arts life at the theater.

Margolis said Metuchen has a vibrant growing arts community and many business owners and residents who are committed to the success of the MDA.

With major Pearl Street and Renaissance development projects well underway, Margolis said it brings opportunities as well as challenges for the downtown.

“Metuchen has significant assets, which require coordination to leverage [on the competition field], including the train station, bus service and access to major highways,” she said adding that the borough is a transit village designation that promotes a safe and walkable downtown.

The proposed MDA will operate independently as a nonprofit 501c3 organization formed under the auspices of Main Street, NJ, part of the National Trust of Historic Preservation, sponsoring Main Street America.

The district area, which consists of only commercial businesses and/or commercial businesses with residential units, includes the Metuchen SportsPlex on Durham Avenue down Middlesex Avenue including the new development to Main Street and Amboy Avenue.

MDA will be run by a full-time paid executive director at an annual salary of $60,000 to $70,000 supported by a volunteer board of trustees and volunteer teams of business owners and landlords who will work on bringing in grant money.

The MDA Board of Trustees will be made up of 13 members — four district business owners, four district real estate owners, one Metuchen resident who is not a district business/property owner, one member of the Borough Council, one member of the Chamber of Commerce board, one member from the Arts Council and one member from the Metuchen Parking Authority.

The executive director will be the central point of contact for businesses interested in locating in the district. The job duties include retaining and strengthening existing businesses; beautifying the district to draw tenants and customers/clients; coordinate joint marketing, advertising and branding utilizing social media, integrate new developments with existing properties/businesses; leveraging the borough’s transportation assets, and liaison with the municipality to get new businesses in.

Margolis said the MDA would work together with the municipality for shared services, including the Department of Public Works picking up trash off the sidewalks and enforcement making sure no litter is on the streets.

The projected budget for the MDA is estimated at $275,000 — 50 percent for staffing and office rent, 10 percent for maintenance and cleaning, five percent for recruitment, retention, and marketing, five percent for planting and 27 percent for capital improvements.

Berger said feedback from other municipalities with downtown alliance organizations said a budget smaller than $275,000 would not be enough to make a meaningful impact for the borough.

“Hopefully beyond $275,000, we can get grants, sponsorships, and even more,” he said.

Berger said the “meat and potatoes” of the MDA funding will come from the Downtown Improvement District (DID) Assessment.

The proposed funding proposal includes a four-year phased in real estate tax percentage increase for business and/or property owners and a contribution from the Borough’s Parking Authority.

“The increases are phased in so there will be no sudden increase,” said Berger.

In 2016, the Borough’s Parking Authority will invest $150,000 with no contribution from the DID Assessment; in 2017, the borough will invest $150,000 and the DID will invest $125,000, from 3.2 percent of real estate taxes collected; in 2018, the borough’s investment will be reduced to $125,000 and the DID’s investment is increased to $150,000 from 2.8 percent of real estate taxes collected; in 2019, the borough’s investment will be $100,000 and the DID’s investment is $175,000 from 4.4 percent of real estate taxes collected and by 2020, the borough’s investment is $75,000 and the DID’s investment is $200,000 from five percent of real estate taxes collected.

“To raise $200,000 from the DID assessment, the rate would be five percent of real estate taxes of each property in the district,” Berger said. “This equates to a rate of about .11 percent of fair market value.”

Berger noted that the rate percent of fair market value is .12 percent in Westfield; .15 percent in Montclair and .16 percent in Somerville.

“No DID assessment would be collected in 2016,” he said.

Berger said investments by the year 2020 will be the investments going forward and noted that the MDA budget requires annual Borough Council approval.

An example of a DID assessment is a 4,000 square foot building assessed at $275,000 and the property owner paying about $15,500 in real estate taxes for 2015.

“Assuming a DID assessment rate of 3.2 percent of real estate tax, the DID fee for this property owner would be $41 per month,” Berger said. “In 2020, if the rate were five percent, the property owner would pay $65 per month.”

Another example is using a 4,000 square foot building with a tenant renting 1,200 square foot of space, or 30 percent of the building.

“The property owner would collect about $12 per month from the tenant for DID fees in 2017, which would increase about $19 per month in 2020,” said Berger.

Berger said with the MDA they hope to enhance property values inside and outside the district, stabilize tax rates, recruit complementary district businesses, reduce vacancy rates, and bring in diverse, not competing businesses.

If the ordinance is adopted, there will be a national search for the MDA executive director with the assistance of Main Street, NJ and work on securing a centrally located ground level office space.

By late summer, the executive director who will be hired will start work on organizing teams and recruiting volunteers, Berger said.

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