Appeal of SID lawsuit to be heard this week

The city’s appeal of a ruling against an expanded Special Improvement District (SID) almost two years ago is expected to be heard this week.

Oral arguments are scheduled for Thursday morning in the Appellate Division of the Superior Court of New Jersey in Trenton.

Union County Superior Court Judge Karen Cassidy ruled against the expanded SID in October 2015. The suit was brought by Friends of Rahway Business, LLC, a group of local business owners, in January 2015, about a month after City Council approved an ordinance (O-42-14) to expand the SID.

A decision on the appeal could take anywhere from two weeks to four months, according to William Michelson, a Fanwood-based attorney representing Friends of Rahway Business, LLC.

Established in 1993 to “promote economic growth and encourage commercial development and improve the business climate,” the original SID set an additional assessment of about 7 percent ($0.03501 tax rate) on 138 properties Central Business District (CBD) properties. The existing SID typically generates about $130,000 annually, providing the budget for the Rahway Arts and Business Partnership (RAPB), formerly the Rahway Arts District (RAD).

SID map-page-001The expanded SID that was approved would add a tax assessment beyond downtown properties to 544 commercial, industrial and apartment properties, totaling assessments of about $251 million. An expanded SID would expect to generate about $760,000 in revenue and would have essentially equaled an almost 5-percent tax hike on all commercial properties in the city while reducing downtown properties’ existing SID assessment. Here’s a breakdown by property type (commercial, industrial, apartment) of what a citywide SID would look like.

An expanded SID would be the largest among 10 in Union County, surpassing Westfield ($410,273 last year) and Elizabeth (whose two SIDs total more than $450,000).

According to court documents, city officials began investigating the possibility of expanding the SID beyond its existing boundaries “to help revitalize not just the downtown area but the entire city.”

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