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Politics & Government

Owners Speak Out on Business Improvement District

Most say the timing is wrong and the cost is too high; others say it could help promote the Main Street area.

Last week, the Chatham Area Chamber of Commerce and the borough Business Improvement District Advisory Committee officially withdrew their support for a controversial business improvement initiative in downtown Chatham. A planned Business Improvement District, which the Advisory Committee had worked to craft for about two years, will likely never be created.

Business and property owners on Main Street would have been required to pay a tax to participate in the Business Improvement District (BID) in exchange for advertising, marketing and government advocacy.

Main Street merchants, business people and owners had spoken out in great numbers against the BID recently and had plenty to say this week about the touchy subject.

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It's All About the Benjamins

Some tenants didn't want to see their rents raised as a result of the proposed 2.3 percent tax that would come out of their landlord's property taxes to pay for the BID.

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Ahmad Nahvi, who has owned Jabberwocky since 1991 and shares a landlord with six other merchants, said the BID wasn't right for downtown. He feared any tax taken out of his landlord's property taxes would be added on to his rent. 

"My landlord would make rent higher to cover future losses," he said.

Skip McCabe of Chatham Sports Shop opposes the BID for the same reasons.

"The downtown economy is not robust and vendors are not anxious to add additional expenses," he said. "It might be different if we had full confidence that the money would be spent well, but we don't."

Still, Rich Crater, who has owned clothing boutique d.j. crater and the building at 250 Main Street for 27 years, has been outspoken in his support of the BID, and spoke in favor of it at a Borough Council meeting Jan. 26. He believes some shop owners are overestimating how much money the BID will cost them.

"I don't agree that it would adversely affect businesses," he said. "The cost is minimal."

Crater estimated that a typical tenant would pay $200 a year toward the BID.

"If I'm a business owner, do you think that's a lot of money? Do you think that will drive me out of business?" he asked.

But other owners disagreed, saying they felt that it would cost them "a lot more" than $150 or $200 per year. Such disagreements underscore how muddled the BID issue has become.

Some business owners have also taken issue with the amount of money spent on crafting the BID. The borough has already spent $10,000 over the past two years funding the Advisory Committee, and the state had matched that $10,000 with a grant.

"It was a wrong move to spend money to have the advisory committee," said Mary Royer, a laywer with offices on Main Street. "I would be very pleased if it's voted down. It was a mistake.

"Unfortunately, it has been a very expensive mistake," she added.

"Nebulous" Plans

At the Jan. 26 meeting where the BID proposal was discussed, David Biagini stressed that none of the details were final. Biagini is the president of FirsTEAManagement, the East Orange-based management company the borough hired two years ago to create and manage the BID. Biagini's effort to keep options open for the BID, however, may have backfired.

Some tenants who opposed the BID said they would have considered supporting it—even if it meant doling out some dough—if they felt the proposal had laid out definitive ideas and plans for promoting downtown.

Judith Labate, who has owned The Stitching Bee for 24 years, has been one of the most vocal opponents of the BID over the past few weeks.

"I did my homework and that BID was way too nebulous," she said.

Labate said she would have liked to see a five-year projection—or any sort of projection—for the BID.

"Basically, what the BID did was say what it could do and would do, but didn't have firm plans," she said. "[It] sounded punitive, not necessarily definitive."

Tony Arminio, who has owned Arminio's Italian Corner for 19 years, agrees.

"There weren't that many ideas that were presented to me where I could say, 'Wow, that's awesome, I'd put in for that," he said.

Questions About Timing

Shop owner reactions also centered around the proposal's timing. If the BID had been formally proposed two years ago when the economy was in better shape, shop owners said, they would have been more supportive of the initiative.

"The economy downtown has not been good. Shop owners don't have the money," McCabe said. "I'm in favor of promoting downtown, but it's the wrong time."

He added that "in particular, this all came to a head in the winter, which is the worst time."

Others agreed, saying "they need to hold up and wait on it [until] the economy comes back and people are on their feet."

And those who own offices or vacant space, as well as service providers with offices on Main Street, said the BID comes up short.

"For professional services, [the BID] makes no sense," Royer said. "In this economy, it's just an additional expense. I think it hurts everybody. It's sort of a mandatory Chamber of Commerce."  

 Catherine Norbury, who owns F. Gerald New with her husband Paul, said the BID is unfair to property owners with vacant lots. Paul Norbury has been a vocal opponent of the BID.

"We felt bad for all the empty buildings down the street that will be taxed on top of not having tenants," she said.

Need for Improvement

Still, despite all the opposition to the BID, merchants were almost unanimous in their desire to see downtown Chatham revitalized and were critical of the borough's handling of the downtown area.

"Businesses down here in Chatham are not promoted the way they are in Madison and Summit," McCabe said. "[Summit and Madison] have got a much more vibrant attempt to draw people downtown. There's sophisticated promoting going on. [Chatham] downtown is laissez faire. One day they'll wake up and it'll be boarded up. It'll be ye olde Chatham, as if it were a tourist destination."

Although Labate said "we have our downtown and it works," she thinks Chatham's attitude is very anti-business.

"Madison does things that don't cost money that are more sweat equity. Why can't they do that here?" she asked.

The desire of tenants to be a part of and support a revitalization effort begs the question: If not a BID, what else?

Some merchants were unable to suggest alternatives to the BID and seem stymied by the question. Others suggested that the Chamber of Commerce should be doing what the BID proposed.

Crater said the BID was created to supplement a "very weak Chamber" that he said does not support the merchants. In addition, he feels the BID would have especially helped business owners who aren't on the Chamber of Commerce.

"This is why the BID made so much sense, because a majority of the merchants aren't members of the Chamber," he said.

Some said business owners could do their own promotions, saying they did not necessarily need the BID to help them out on that front. But others said a BID could have done a good job of exposing Main Street businesses.

Jassi Singh, who owns an AT&T store on Main Street, said it "makes him very upset" that after ten years in business, first time visitors to his store still ask him if he just opened.

"There's a lack of knowledge about what's in town and what's not. The whole idea is to let people know what's in town," he said. "From what I have heard, I think the BID is good for business."

Crater, who chaired the BID Advisory Committee from July 2008 until January 2009, said the BID would "develop a marketing plan for the town that would attract new business and promote Chatham through increased advertising."

"The BID was an opportunity for property owners to make a contribution to the community where they receive income," Crater said. "If you own a business, you have to be willing to make an investment in your business community."

Despite the advice of the Advisory Committee and the Chamber of Commerce, which the council is likely to follow at its March 22 meeting when it is scheduled to vote on the BID, Crater remains steadfastly optimistic. 

"The town should approve the establishment of a BID," he said.  "It is still alive."

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