A Union County judge denied a motion on June 12 to enforce a settlement and reconsider a dismissal, officially ending the case that began in 2015 to stop the expansion of a Special Improvement District (SID).

The seven-page denial by Union County Superior Court Judge Karen Cassidy on June 12, which explains much of the recent background, can be found here.

The Rahway Arts and Business Partnership (RABP) manages the Special Improvement District (SID) budget, which historically had been about $130,000 a year. City Council earlier this month approved a 2019 budget of about $750,000, which will be a more typical total with an expanded, citywide SID.

Legislation was approved in late 2014 to expand the SID, which levied an additional about 7 percent tax assessment on 138 downtown commercial properties, to nearly all commercial and industrial properties citywide. Friends of Rahway Business, LLC, filed a lawsuit to stop the expansion and a Superior Court judge initially ruled in 2015 against the expanded SID before an appeals court struck down that decision in 2017.

The case was scheduled to go to trial on Aug. 22, 2018 with some three items tentatively settled:

• Expand the seven-member board of trustees that oversees SID, with two local business owners to be appointed;
• New SID assessments would begin Jan. 1, 2019; and,
• The special assessment would be capped at $500,000 annually for five years.

William Michelson, a Plainfield-based attorney who represented the plaintiffs, said the only issue that remained was what to do with $640,000 that was collected in 2015, when the SID first was expanded, but held in escrow pursuant to the court’s order of July 22, 2015.

The city’s attorneys conceded in court documents that two items had been preliminarily agreed to but ultimately a settlement could not be reached. Any settlement agreement also must be approved by City Council and executed by the mayor, they contended. The judge advised the two sides to continue negotiations or the matter would proceed to a hearing. Shortly after, the city filed a motion to dismiss on Sept. 4, 2018.

Once the Appellate Division vacated the order in July 2017, Michelson said they came down hard on the plaintiffs and practically gave City Council free will on creation of a citywide SID. “We were left with very few cards to play,” he said, and being a small citizens group made it difficult to raise money for the legal costs of a trial.

Things discussed when looking for a settlement are not items that you proceed with if you win or lose, City Administrator Robert Landolfi said in a recent telephone interview. Once the case was dismissed, there was need for a settlement, added Joe Brown, the city’s communication director.

Michelson is still critical of how the city pushed the measure through five years ago, only weeks after a mayoral election. “No one knew what was going on,” he said, and the city officials made it difficult to find out what they were doing and why. “When we finally got to see it, it wasn’t really that bad, but we only saw the documents a year after the case started,” Michelson said. “I don’t see what was gained, they could’ve had it early if the city was transparent about it,” he said. The only thing plaintiffs got for it was four years of not having to pay this tax,  he added.

It’s not too late for the city to add two members to the RABP board, Michelson advocated, which would simply provide more experience and management. The mayor could propose amending the ordinance, he said. Mayor Raymond Giacobbe, Jr., who was the 6th Ward council representative at the time, abstained from the 6-0-1- vote on the SID expansion ordinance because his family had property holdings that would be impacted. The St. Georges Avenue parcel has since been sold and a Wawa constructed on the site.