Jersey City has been a poster child for how incentives can spur massive revitalization of a city.
Mayor Steve Fulop, however, hopes that era is over.
“Five years ago, I made a concerted effort to kind of change that in two distinct ways,” he said. “One was to incentivize businesses away from the waterfront into areas like Journal Square in the south side of the city, and that’s largely been successful. The other part of it was to curtail or eliminate, which we’re working toward, some of the incentives that the city could grant downtown over here.”
Fulop was speaking last week at the business school at New Jersey City University, located in Exchange Place. It was during an invitation-only event of key business leaders from companies listed in the NJCU New Jersey 50 Index, a fund based on the 50 top public companies headquartered in the state.
“The reason I’m trying to do that, and we’ve been moving in that direction fairly aggressively, is because I don’t necessarily believe that it is a sustainable long-term model to be chasing business purely based on incentives,” he said. “I don’t think it’s healthy for the city and I don’t think it’s healthy, long term, for businesses that want to be here.
“I think Jersey City has a lot of assets that we can sell, and I think that the biggest concerns that we have … is really around some of the infrastructure, which is a little bit beyond our control — particularly around the PATH infrastructure and where the Port Authority is investing, because that’s where we’re really tied into. So that is the biggest concern and obstacle to continued growth.”
Fulop said Jersey City has more to offer than just incentives. He said that, even despite its tremendous growth, it is a bargain compared with New York City. He feels that factor alone should help the city maintain its growth, even if there is another downturn in the economy.
Fulop was careful not to criticize Newark’s bid for Amazon — “I’m hopeful Newark gets it,” he said — but he also said he wished he could have a do-over.
“If I were to look back on how I approached even the Amazon incentive component and how the city approaches that, I probably would have approached it differently,” he said. “As I’ve had the chance to think about how we approached it, and what we did well, and what we didn’t do well … I would have probably approached that very, very differently. Because I don’t really believe that incentives are only what’s going to drive people to want to be here.”
Fulop, who has a solid relationship with Newark Mayor Ras Baraka, said he wished they had talked about a joint effort, saying Jersey City had more opportunities with housing, while Newark has more opportunities with space and other attributes.
“What would I have done differently is that I probably would have been more proactive with Ras,” he said.
Another wish, Fulop said, is to get away from tax abatements and payments in lieu of taxes.
“It’s a useful tool that’s become an expectation by many in the development community — and it was never intended to be that way,” he said. “It was intended to be some sort of enhancement to get a project, that maybe wasn’t financially viable, moving.
“It became part of their financing package that they just expected as a fait accompli that they would get the PILOT or abatement here in Jersey City. We have not done a PILOT of any sort in over a year now. I’ve had a deliberate effort in curtailing that … and it hasn’t really changed the growth of the city, to be honest with you.
“We’re going to be more thoughtful and selective on how we’re approaching them going forward. It’s not like a blanket. People shouldn’t expect that just because you’re acquiring the property that you put it into your financial model (and) that it’s a given.”
Atlantic City Mayor Frank Gilliam agreed.
Gilliam acknowledges Atlantic City still has plenty of room (and need) for growth, but he is concerned about the use of PILOTs, too.
“Atlantic City has not really used PILOTs that frequently to actually be able to say that we have a robust PILOT program or even if it’s helped us or not,” he said. “I know that a lot of our PILOTs are more with long-term low-income housing.”
Gilliam said he wished the city could have a do-over on some of those, too.
“We’re actually taking a very deep dive into those particular contracts because we’re finding (that we were) being taken advantage of, due to the fact that a lot of those low-income housing is not up to our quality of living,” he said.
“So, our PILOT issue is much different than Jersey City’s. … We’re actually revisiting all the PILOTs to basically figure out a way that we can monetize or, at least for some of these entities, to put more money back into the facilities — not only to have folks living in a quality house, but also to change the status of our neighborhoods.”