Take a longer view

On January 11, the city administration announced it was ready to make a deal with Thomas Edison State College for the Glen Cairn Arms site.

That announcement took many by surprise.

The swiftness with which the proposal was dropped on the public and the city council, which must approve the deal, raised eyebrows. Specifically, the proposed one time fee of $300,000 in lieu of any property taxes going forward has generated some pretty stiff resistance.

There has been lots of discussion, most of it online, over the merits of this proposal. Some of it has been enlightening; some has been sarcastic and/or snarky.

Some of us feel that the TESC proposal may not be the highest and best use of the parcel at 301 West State Street. It would be more palatable if there were some sort of structured annual payment in lieu of property taxes built into the package. This just seems to be common sense in a city that is drowning in a sea of tax-exempt properties.

Those who favor the proposal as is, say we should not let the minimal, one-time payment stand in the way of what will be a highly visible project.

"Get something done," is their mantra, "and other development projects will follow."

The implication is that by treating the TESC project as a "loss leader" it will drive other developers to the city looking to do deals.  The supporters of the project also tout the secondary benefits of spin off jobs and revenues for existing local businesses.

It is an old argument. It has been tried. It has not been successful.

Getting into the game

We can readily point to the Baseball Park and Arena as examples of big-ticket projects that involved public money and have yet to generate any significant economic development.

Yes, people attend events at both venues. However, the self-contained nature of both facilities makes it unnecessary and unusual for patrons to visit other businesses before or after attending games and concerts. People may come into Trenton to participate in these events, but they do not, as a rule, spend money at other businesses in the city.

This is not just the reality here, studies from around the nation have shown little proof that these public facilities stimulate the local economy. Ken Belson wrote about this in an article published in the New York Times on September 7, 2010.

James Joyner wrote about the faux benefits of publicly financed private sports stadiums in his "Outside the Beltway" blog last May.

The Taxpayers League of Minnesota sums up the fallacy in eight points in this document.

There may be some jobs created that are filled by Trenton residents but most are part-time and or seasonal.

Similarly, those that provide supplies and services to either facility are not necessarily or predominately Trenton-based.

It is a pretty safe bet that no one moved to the city because of the ballpark or arena. Government funded sports venues simply do not spur economic development.

Checking in

The city owned Marriott Hotel on Lafayette Street is another example. We were "assured" by the Palmer administration that a top-notch hotel located just steps from the seat of state government would be just the thing to spark an explosion of economic opportunity downtown.

The hotel has yet to turn a profit. Not only is the city (read: taxpayers) on the hook for the bond debt used to finance the construction of the building, it is also required to make up any operational deficits.

Last year, we footed the bill for a $500,000 cash infusion to keep the doors open and lights on. This year, we may very likely be asked for another round of funding to cover operating expenses.

Many of us told then Mayor Palmer this would happen when he proposed it, but he did not want to hear it. He forced his way on the city and we are paying the price, litereally, for his arrogance.

One way out of this is to just sell the hotel outright. For whatever price. It would, at the very least, free up the taxpayers from having to fund anymore operating deficits and put the property on the tax rolls. Even with likely abatements, the city might actually see some revenue from the property at last.

If a private owner cannot make the hotel work, that would be sad, but at least the city will only be dealing with the "fixed" cost of the bond debt (principal and interest). The city (and state) put out the money to build this and there have been no real returns on that investment. It certainly has not generated any real development downtown or increased ratables in the city.

Around the corner and up the block

To go along with the construction and opening of the hotel, the city looked for ways to jump start development in the immediate vicinity. As early as 2000, with the planning for the hotel under way, the city looked around and decided they needed to purchase the long vacant "Caola property" at S. Warren and W. Front streets. The city paid $162,863.69 for the property and began to market it. (Bear in mind, at the same time the city had taken possession of the Glen Cairn Arms four years earlier but was by then embroiled in a dispute over the final value of the property).

In 2002, not quite a year after the city settled on the Caola property, they had a well known and respected developer, Enterprise Real Estate Services, interested in doing a project there. Enterprise, an arm of the highly successful Rouse Company, planned to spend $4,000,000 on the project. Despite the fact that Enterprise was not looking for any tax breaks for the project, the deal never went through.

At the time, there were murmurings that Enterprise requested the city kick in some money to help with the asbestos and lead paint situations on the site, as well as partial demolition. The city said "No." Enterprise walked.

Then along came former Senator Robert Torricelli and his Woodrose Properties. They made a proposal to the city and were designated the developer. Woodrose got the property for $1 and a tax abatement. The city did the demo work, removed the asbestos and stabilized the building. Trenton threw some Urban Enterprise Zone money at the project as well.

Was it worth it?

The "restaurant" that was envisioned for the site is a Subway sandwich shop (and not a new business...just one that relocated from around the corner on State Street).

One of the retail spaces just recently became a yoga studio. Another retail space appears to remain vacant.

Has it helped revitalize the downtown? Not really.

We will leave the discussion of how much favoritism might have been shown this particular developer, and why, for another time. (Read here and here for previous posts on this).

Enter the Matrix

Just a block from the Woodrose property is another development project that was hailed as a turning point for the city. That would be the office building at 32 East Front Street that currently houses the regional offices of Wells Fargo (nee, Wachovia) bank.

Originally undertaken by the Economic Development Corporation for Trenton, the project encompassed taking a former two level parking lot and building a parking garage and office building on the site. The garage would be turned over to the Trenton Parking Authority to operate as a replacement for the surface lot. The office building was to house the offices of the Hill Wallack law firm along with other commercial/retail space.

The EDCT was another initiative of the Palmer administration. For sizable contributions, local institutions received seats on the non-profit development corporation's board. In simple terms, the idea was the seed money would fund the development of the buildings. The monies realized from the successful completion of the initial project would be rolled back into the EDCT's fund so it could do other projects.

The short version of a long story is that the EDCT failed to complete the project. It was taken over by an experienced, professional developer and finished. The original anchor tenant, Hill Wallack, opted out of the deal. Finally, Wachovia (now Wells Fargo) moved their offices from Ewing to the building.

The building was never fully rented out. When the current lease is up sometime later this year, Wells Fargo will apparently be vacating the space downtown for quarters in West Windsor.

If the past is an indication

The point of all this is to give the proponents of TESC project some perspective.

Economic development in Trenton is not easy. It is complicated by the politics one has to play. Good deals (like the Enterprise Real Estate proposal for the Caola building) are shunted aside for less desirable ones (Woodrose's version) that end up costing the city more and have marginal effect (like the hotel).

In the end, we, the taxpayers, lose.

Development has been and continues to be more about the political connections and the well-being of the principals and government officials. Your run of the mill, tax paying resident is the ultimate pawn in these deals because, when the promised benefits fail to materialize, we pick up the slack. And the tab.

There has never been a long view of what was best for the city. Our leaders have never looked much past the current or next election cycle when it comes to making development deals.

Former Mayor Doug Palmer said it himself. In an article by Tom Hester, Jr. published in the Times, March 21, 2000, Palmer explains just how long his vision is.

''I don't look at the city today,'' Palmer said. ''I look three, four, five years down the road and what we are doing and what possibly can be.''

Our economic development plans need to look further down the road than the current administration or the next election. We need a policy and process in place that guides our decisions past what is best at the moment and toward that goal of sustainable revenue growth.

It is long past time for this city to move beyond the "loss leader" mentality and favored nations deals and work towards the creation of a comprehensive development strategy that is fair to all proposals. Moreover, fair to the taxpayers as well.

The TESC proposal, as it stands at this writing, simply does not help us towards a financially secure future.

Don't just take our word for it

"Insanity is doing the same thing over and over again while expecting a different result."

The Sunday edition of the Times (of Trenton, not that other one) ran two interesting articles regarding development in Trenton's South Ward.

The primary article was an lengthy and sound piece focusing on the impact Waterfront Park and the Trenton Thunder have had on that part of the city.

In short, as the Thunder enter their 15th season, the touted positive economic impact on the neighborhood or city at large has been negligible.

Same can be said for the Sovereign Bank Arena, less than a mile away.

Note: we're happy that both of these venues are here in Trenton and try to support them by attending ball games and events whenever we can. But we are not for one minute fooled into thinking they have provided anything resembling the economic boom for the city as promised by those who proposed and promoted their construction.

The article clearly demonstrates that these large-scale projects are seldom the economic engines they are touted to be. Especially with sports and entertainment venues like the ball park and the arena, people come into town for specific events at that location. They can get their food and beverage needs met while attending the event and then they leave. Little to know spin-off business occurs in adjacent areas.

Yes...there have been some exceptions. Certain concerts at the arena have generated some extra business at local bars and restaurants pre- and post-show. But if it happens once or twice a year, it is not enough to be called an economic upturn.

At the end of the article, developer Bill Cahill offers up a solid quote:

"My philosophy is, take care of the small pieces and eventually you'll have a big piece," he said. "Their philosophy is, take care of the big pieces. Well, that philosophy isn't working."

As a companion piece to the larger article, the same reporter highlights the work of HHG Development in the South Ward. HHG is one of three groups developing first class housing along Centre Street in an example of just the type of "small piece" work that Cahill refers to.

This is the kind of work that needs to be encouraged if the city is to reverse itself from decline to prosperity. Working in small enclaves to redevelop the many wonderful but woefully neglected buildings (residential and otherwise) that exist; preserving and reusing what is already here; maintaining a distinctive "sense of place."

The more of this kind of work that is done, the more stable our neighborhoods will become. From this patchwork of redeveloped areas will grow a more vital city.

Those responsible for overseeing the economic development efforts in Trenton need to step back and assess their approach. For too long they have cozied up to the deep-pocketed developers with big dreams and we have little to show for it.

It's time that they honor and encourage the type of work that HHG, Mr. Cahill and others have been doing. Forget the headlines (and headaches) of dealing with a Hovnanian and sit down with the small developers who know how to capitalize on what is already here.

So many inside and outside of the development community can see this.

Why can't the administration?

Let's table the dreams of 25 story office towers and their fantastical promises of thousands of jobs and try something different. Let's concentrate on:

a) creating a diverse inventory of excellent and interesting housing stock and

b) developing the local retail and services that can support and in turn be supported by the residents attracted to that housing stock.

A few thoughts on residency

It is not about the person, it is about the law…and the benefits to the city.
Prior to Judge Feinberg handing in her decision in the Santiago case, there was a lot of back and forth about the policy of granting residency waivers to select individuals employed by the city.

Some people insist that residency requirements should be done away with completely. They don’t feel it matters in the least where anyone who works for the city lives.

Others say waivers should be allowed in certain circumstances.

One phrase we hear often in these arguments is that “we need the best person for the job, not the best person who will reside here to take the job.”

That just doesn’t make sense and here’s why:

If residency is a requirement for the job and a candidate is not willing or able to meet that requirement, then simple logic dictates they are not the best candidate for the job.

It makes you wonder what these “we don’t need residency requirements” folks think of the people who have voluntarily chosen to reside here in Trenton. If “the best” won’t relocate here, are those of us who have second rate? Isn’t that a slap in the face of the many, residency-law-abiding city employees?

Let’s make something else perfectly clear: residency requirements were enacted by the people of this city to help mitigate the loss of the middle class (and above) residents to the surrounding area. The idea was to maintain a resident base of people who could support the economy of the city by earning and spending their money here.

It’s interesting to note that the Palmer Administration’s policy of “selective enforcement” of the residency ordinance has coincided with an increasing amount of Trenton tax dollars flowing out of the city in the form of paychecks and professional service contract payments to non-residents.

Just look at the city law department. There was a time when the City Attorney and staff handle the vast majority if not all of the city’s legal work. The members of the department were required to live in the city from which they drew their paychecks. They paid taxes on their homes here; they patronized the restaurants, stores and movie theatres (remember them?) here. The dollars stayed in circulation in town. Business was supported; jobs were supported so more people could earn a living wage.

A picture of the law department today tells a completely different story. We have a City Attorney (I believe it may be a statutory requirement). But we also have the highly compensated “Special Counsel” who is essentially a non-resident contract employee. We also regularly retain several other outside attorneys to handle labor cases and contract negotiations; defense for the many damage and injury claims that are filed against the city (take a look at a council docket sometime), most from outside of the City.

In this most recent example of the residency waiver challenge, only the citizen plaintiff’s had local representation. City Council, the Mayor, Director Santiago and corporate entity of the City of Trenton all had separate legal representation and all were from out of the area.

Hundreds of thousands of dollars in legal fees paid by the city each year to contract out services to providers who don’t live in the city.

Why not make sure we had an adequately staffed, professionally capable law department comprised of city residents. Then the wages paid would have at least half a chance of staying within the community and doing good where it is needed most (rather than Cherry Hill, or Livingston or Keyport etc.

Our so-called leaders tell us repeatedly of the need to attract people with expendable income to reside here; seek entertainment here; shop here; dine here.

And then they contradict themselves by giving money by the wheelbarrow load, not to mention cars, cell phones, etc., to outside attorneys, “gang” consultants, and the like.

Trenton will continue to suffer until and unless those who have been elected to office are held accountable.

Residency is one tool by which we can do that.

Doing away with it, amending it, waiving will only exacerbate our problems.