By Michael G. McGuinness
While many New Jersey residents and business owners are rightfully concerned about the potential adverse impacts from federal tax reform measures at the same time as increases to state taxes are being discussed by Gov.-elect Phil Murphy and our Legislature, let’s not overlook the possible ways that local mayors can help to ameliorate this situation.
Although local officials may be powerless to stop the edicts and mandates from Washington and Trenton, they certainly have the power to simplify the process — and lower the costs and financial burdens — of setting up and running a home or business. With New Jersey recently being designated the state with the highest tax burden (thanks to our outrageous local property taxes), town leaders have no time to waste!
By now, municipalities should be well along in updating antiquated land use and zoning standards to reflect the dramatic changes in demographics, technology, finance, retail, life and workstyle trends. Towns need to understand that most development for the foreseeable future will be in the form of mixed-use projects. This will necessitate radical changes to outdated parking ratios and standards to reflect more cost-effective shared and structured parking; dwelling units for smaller and childless families; ride-sharing (Uber, Lyft); co-working centers (WeWork, Regus); rapidly growing experiential 3F retail businesses (food, fitness and fun); and the surge of e-commerce, with its overwhelming deluge of 24/7 package deliveries. At no time is this more apparent than during the holiday shopping season fueled by consumer demand for same-day and next-day delivery. Also rapidly changing are the ways that traditional brick-and-mortar stores are competing with the likes of Amazon. BOPIS (buy online, pick up in store) and BORIS (buy online, return in store) have seen up to a 44 percent increase since 2015, as reported by JDA Software Inc. All of these trends are having game-changing impacts on our communities.
Embracing these changes will bring about a paradigm shift as local leaders see the potential upside of replacing the old ways of doing things with the new. Ignoring these trends will eliminate any hope of sharing in all the rewards that come with a community’s vibrant economic future — well-paying jobs, a demographically balanced population, culture and nightlife. The millennial generation’s preferences for housing, shopping and working arrangements will dictate how and where shrewd investors and businesses locate for the foreseeable future. This means that our short-term target consumer audience should largely be focused on the preferences of those young folks ages 17 to 37 (born between 1980 and 2000). I have three of them. Longer-term planning needs to incorporate those born after 2000 (Generation Z).
I think it’s safe to say that most of New Jersey’s 566 municipalities don’t have, nor should they have, the resources to monitor or even respond to what’s needed based on these trends. Let’s face it: Our citizens and taxpayers cannot — and should not have to — fund our antiquated system of “home rule” anymore. Change is overdue. We need a more regional, holistic and reliable way to respond to the trends that are rapidly altering the landscape. Everyone benefits when our state, counties, regions and towns use their limited resources to eliminate conflicting objectives and work toward the same economic development and quality of life goals. Investors, employers and residents need a compelling reason to be here. Some of the most rewarding success stories happen when towns come together, leverage their resources and develop a unified regional plan (such as the Hackensack Meadowlands region and the Lehigh Valley) to attract industry clusters. The growing Open Data movement to accelerate the effective use of shared information by governments at all levels would vastly improve services, better inform decision-making, promote better regional planning and synergy among towns and better engage residents.
As I have stated before, every municipal leader should be exhaustively looking for ways to reduce the financial burdens to the citizens in their communities. For starters, let’s make some progress in consolidation and cost-sharing efforts. Kudos to Sussex County for starting the discussion to merge their school districts. Every dollar of savings can be transmitted to taxpayers. I am hopeful that our new governor and Legislature will emulate New York State’s Municipal Restructuring Fund.
Mergers, acquisitions and rightsizing are the norm today in the business world. Municipalities would best serve their constituents by doing a self-assessment of their capabilities and resources, then restructuring accordingly. “To survive and thrive, the state will have to constantly adapt, restructure, and reinvent itself,” as was well-stated in one of the Rutgers Regional Reports by Drs. James Hughes and Joseph Seneca. This truth applies equally well to municipalities, many of which are still functioning the way they were 100 or more years ago. Their perspectives, planning horizons and processes need to be updated and modernized to reflect today’s reality and be sufficiently nimble to adapt to unforeseen innovations and disruptions.
There are a good number of municipalities throughout the state that are showing us the way as they embrace the 21st century. Some good examples of ongoing redevelopment projects and next-generation lifestyle hubs include ON3 in Nutley and Clifton, the New Jersey Center of Excellence in Bridgewater, Bell Works in Holmdel, Riverbend in Harrison, Riverton in Sayreville, The Green at Florham Park and the “Sack” in Hackensack. Plenty of other great examples can be found in Collingswood, Plainsboro, Morristown, New Brunswick, Woodbridge, Montclair and Asbury Park.
Michael McGuinness is CEO of NAIOP New Jersey and has guided the commercial real estate development association’s progress since he joined the staff in 1997. In addition to overseeing daily operations, programs and staff, McGuinness directs the chapter’s legislative activities and manages the Developers Political Action Committee (DPAC).