RED BANK, N.J. (CBSNewYork/AP) — The renaissance many of New Jersey’s downtowns have enjoyed has been put in peril by the economic downturn, as business owners find themselves squeezed by high rents and low revenue. But entrepreneurs and municipal officials are starting to work together to cut red tape and streamline regulations to get taxpaying businesses back into empty downtown storefronts.
In Red Bank, it started with an economic summit and progressed to reducing local red tape and waiving a parking fee to help fill empty stores in response to the economic slowdown.
In Somerville, the business association has a director of community development who will help new merchants through the permitting process to open shop.
And downtown Morristown officials said they have benefited from a business-friendly mayor and millions of dollars in redevelopment to keep the vacancy rate low.
“I think Red Bank kind of stands apart from what I’ve observed in most communities,” said David Milder, a consultant and board member of Downtown NJ, a trade group representing business districts. “In other parts of the country, taking six weeks to get things done is considered unacceptable to get permits and approvals. A lot of towns don’t see that.”
Last fall, Red Bank suspended a parking fee charged to applicants who lacked sufficient parking on their property. Waiving the requirement, which had been in place for 15 years, could save a high-volume use, like a restaurant, from $40,000 to $50,000 for that fee, estimated Mayor Pasquale “Pat” Menna. The fee moratorium ends this year, unless officials decide economic conditions warrant an extension.
“Any reduction in cost to open a new business is welcome,” said Nancy Adams, executive director of the RiverCenter business alliance in Red Bank.
Red Bank officials started eliminating some regulatory red tape in 2009. Changes were made so retailers seeking approvals went to building code officials instead of applying to regulatory boards and having to hire experts to testify, as long as there wasn’t a major change in the use. That change made it easier for a store to move into a space that had been previously occupied by another store, Menna said
“Some ordinances were crafted in the 1950s and `60s. It’s a different age,” Menna said.
Following a January 2009 economic summit organized by Councilman Michael DuPont, Red Bank officials looked at ways to cut time- and money-consuming regulations based on some of the suggestions made by business people and residents, and made some changes.
Both Menna and DuPont are quick to say that businesses pay about 40 percent of the local property taxes and that residents have a vested interest in keeping a downtown business district thriving. One remaining issue is parking, and Menna said a proposal to build a parking deck could be revisited this year. And high rents remain a hurdle, officials said.
In Morristown, while the town government doesn’t have a formal program, a business-friendly attitude on the part of the administration is credited with cutting red tape.
“I can contact the town and work through issues. The mayor is business-friendly,” said Michael Fabrizio, executive director of the Morristown Partnership. “There is no program for expeditious approvals, but I think it is the goal.”
Fabrizio also credits a trickle-down effect of the business-friendly attitude of Gov. Chris Christie’s administration to the local level.
“That willingness is critical,” Fabrizio said. “I believe it is coming statewide with the current administration being business friendly.”
Morristown’s downtown is being transformed with the addition of a development at the site of the former Epstein’s department store. Roots Steakhouse opened there in February, as two other restaurants prepared to open.
Developers said at the time that they had leased 35 percent of the 55,000 square feet of retail in one building at the site, 40 Park, although another 11,000 square feet of retail space remained empty in another building, the Metropolitan.
They also said that 70 percent of the 76 condos at 40 Park, where the price range is $400,000 to $2.2 million, had been sold and all 130 rental units at the Metropolitan, where the monthly rent ranges from $2,000 to $3,600, were occupied.
Fabrizio said local officials realize that overall economic development of a municipality is tied to the vibrancy of its downtown, Fabrizio said.
That and the competition that New Jersey downtowns face from other places and other states hasn’t always been readily grasped by local officials, Milder said.
“There is an unawareness that creates the bad (approval and permitting) process,” Milder said. “Things emerge, there is bureaucracy and they (officials) may be unaware of the effect on the community.”
While he said other issues contribute to difficulties filling vacant storefronts, the ability to get local approvals is a factor.
The effect is that some municipalities have a reputation of being too costly to go into, he said.
“Large companies won’t look seriously at that community,” Milder said. “The small business guy doesn’t have the professional staff (of lawyer and engineers) and may be fearful. They have a lot of personal investment at stake.”
In Somerville, potential merchants have a go-to guy in borough government to turn to for information about how to navigate the approval process.
“We have a good process. We have a director of community development who will sit down with anyone interested in opening a new business, said Cindy Hollod, Downtown Somerville Alliance executive director. “He’s an ongoing resource that helps businesses come to town or expand.”
The result for Somerville has been positive.
“Last year, we had five more business open than closed; the year before, six more opened,” Hollod said. “We’ve been on the net positive.”
The alliance and the borough jointly publish a guide to opening a new business in Somerville.
“It’s easier, that’s what people tell me, that it’s easier to have someone guide them through the process,” Hollod said. “We work with (coordinator Frank Vuoso) to make sure the process is as smooth as possible.”
The borough and alliance also have partnered on improvement projects, including upgrading two major parking downtown lots, financed with a state loan and scheduled to go out to bid in about six weeks, she said.
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