City files response to SID lawsuit

The city has officially responded to a lawsuit against the expanded Special Improvement District (SID), brought by a group of business owners.

There’s nothing earth-shattering in the response, the city basically denied all seven counts brought by Friends of Rahway Business, LLC:

  • Lack of adequate notice; plaintiffs argue that many property owners did not receive adequate notice when Ordinance 42-14, to expand the SID,  was introduced in November and passed in December.
  • Non-contiguous SID; properties added to the SID are not contiguous, either to the pre-existing SID, nor for the most part to each other, and there is no legislative authorization which would allow a governing body to create a scattered-site SID.
  • Lack of budgetary documents; plaintiffs argue that the SID has been out of compliance with state law for a significant period of time by not making information available about its budget, money received and spent. City Council, they claim, did not have sufficient financial and budgetary information because the SID and Arts District board “did not produce it, to allow an informed decision about enlarging the SID or designating the entity that would administer it.”
  • Spot zoning; plaintiffs argued that creation of a non-contiguous SID where affected properties are scattered over a large area, is akin to “spot zoning” — which is not valid in New Jersey — “wherein individual properties are zoned as someone wants them to be, but without relation to what the zoning is around them. “
  • Violation of state-imposed 2 percent property tax cap; plaintiffs believe it’s “highly probable” that the increase in property taxes would be excessive and violate the state-imposed 2-percent cap. The ordinance, they argue, “has no other purpose than to facilitate the increased tax bills for these property owners.”
  • Exclusion of some properties in the enlarged SID; plaintiffs describe the enlargement of the SID as “overinclusive,” including properties that do not appear to have the commercial use characteristics, notably commercial use, but also “underinclusive,” because its omits mixed-use buildings containing residential as well as business uses. The plaintiffs allege that would be “fundamentally unfair, not only to the property owners being included, but to those who would pay a greater amount of taxes because of the exclusion of similar properties.”
  • Constitutional violations. The ordinance, according to plaintiffs, violates the rights of affected property owners to both procedural and substantive due process of affected property owners.

The city’s attorneys filed their response to the complaint on March 10 in Union County Superior Court. The entire 17-page document can be accessed here. and the original complaint filed by Friends of Rahway Business, LLC, can be found here.

Here’s a good primer on SIDs and BIDs and the types of things that they do: What Is a BID?

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