By Joshua Burd
What can state government do to help redevelopment in New Jersey? The real estate community certainly has its own ideas, but so does a lawmaker and a former longtime mayor.
Assemblyman Jim Kennedy answered that very question last week, raising the need for liquor license reform and highlighting what has become been a top priority for New Jersey’s commercial real estate sector. Licenses can be especially scarce in some municipalities because they are based on population counts from decades ago, he said, meaning it could cost more than $1 million for a developer or a business to acquire one.
That is problematic in cities and towns that have embraced redevelopment, he said.
“Obviously if you’re trying to redevelop a smaller community and it’s X (licenses) per thousand — and there’s two licenses and you’re at your max — you really need to change that model,” Kennedy, a former Rahway mayor, said during New Jersey Future’s annual Redevelopment Forum in New Brunswick. “And that’s one of the things that I think will happen.”
The assemblyman, who spent 19 years at the helm in Rahway, has co-sponsored one of the more widely supported measures to update the state’s liquor licenses. The bill would look to protect existing license holders while creating an opportunity for small restaurants, allowing municipalities to issue annual, nontransferable permits to establishments that would serve liquor for table service only.
The proposal, which mirrors a bill floated during the last legislative session, was introduced in early January as A1505 and referred to the Assembly Oversight, Reform and Federal Relations Committee. Kennedy conceded that “the biggest issue” is how to address existing license holders who are concerned that their investment would be devalued by new permits, but was confident that the bill would ultimately succeed.
The concept was among several issues raised during the morning plenary session at the conference. The March 9 event drew hundreds of real estate executives and professionals to the Hyatt Regency New Brunswick, with a focus on promoting so-called smart growth policies in the state.
Smart growth expert Christopher Zimmerman, who moderated the plenary session, said elected officials and regulators can make the difference in fostering or hindering responsible redevelopment.
“There’s a role that government can play in regulating these things,” said Zimmerman, the vice president for economic development with the nonprofit Smart Growth America. “But if we haven’t reviewed for years or decades — in many cases — how we go about this, it really may be holding back the potential of our communities because our regulations haven’t kept pace.”
Kennedy, who oversaw years of redevelopment in Rahway and is now a consultant, said the state can also promote smart growth through steps such as funding transportation upgrades. And that doesn’t automatically mean investing in municipalities with train stations, he said, noting that highway-centric towns such as East Brunswick have focused their transit-oriented redevelopment around bus service.
“The bus routes are as important if not more important than train routes in many cases,” Kennedy said. “Train routes have a tendency to take people through the state, but also out of the state of New Jersey.”
He added that there are areas in which the state should be hands-off. Chief among them are the state’s redevelopment law and the rules governing tax abatements and payments in lieu of taxes, or PILOTs. In recent years, lawmakers have mulled changes such as mandating that municipalities share PILOT revenue with their school districts, but opponents say those amendments would severely curtail redevelopment efforts.
Kennedy said the concept of PILOTs has been “demonized” in some towns, but noted that many of the projects that took place in Rahway would not have been possible without the agreements.
“There’s a lot of different ways that you can approach this,” he said. “In some cases, the state should stay out of these things. And they should be encouraging (Redevelopment Area Bonds) in the areas that do the infrastructure pieces that are needed in order to address crumbling infrastructure in these small and larger towns.”