Posts Tagged ‘Eric Jackson’

Trenton’s Most Foolish Ordinance Yet

Even the State of NJ thinks the recently passed   “New Jersey Economic Opportunity Act of 2013” is a bad idea.  However, the Act was confirmed by Trenton’s   City Council and made applicable to Trenton by Ordinance 13-58.

The Act is meant to stimulate certain types of investment and create jobs in NJ. However, it does so at a high price of over $400,000 per job in tax credits and the loss of local property tax revenue for 20 years.  It is targeted at four NJ cities including Trenton and requires those cities to forego substantial taxes that would otherwise be collected from property owners.   The State’s Office of Legislative Services (OLS) did an economic analysis of the Act which estimates that in the best of circumstances the State’s   investment would return 10% over 20 years.   That’s .05% per year.     We’d be better off investing in a savings account.

The OLS summarizes its findings below:

The Office of Legislative Services finds that the revenue impact of the substitute (the Act) is indeterminate with certain revenue losses due to tax incentive agreements which may or may not be fully offset by revenue increases from expanded business activity. The magnitude of the revenue losses from tax incentive agreements cannot be known because ERG and GROWNJ have no aggregate award cap from January 1, 2014 through the program expiration on July 1, 2018.

What’s worse is that the .05% yearly return assumes that the alternative is that no new   jobs are created unless this Act is in place.  That’s a horrible assumption and the OLS so much as admits it.  Read the full analysis here.

So why did our City Council sign on for a bill that is so terrible for both the State and the City of Trenton?

It’s hard to say and there has been much speculation amongst activist.  Some of facts surrounding the passage the Ordinance are as follows:

  • Council passed it in a hurry with little to no public comment and on a Friday evening when the public was not likely to be in attendance at the meeting.  This was suspicious.
  • One person who did make it to the meeting was a developer from Robert Torricelli’s Woodrose development who stands to benefit from the Act.
  • Days  later  that same Woodrose development  handed  out  500 free Turkeys at their  development site  in Trenton and invited local politicians Marge Caldwell-Wilson and  Eric  Jackson  to  be seen as  having something to do with the gift.
  • Robert  Torricelli was  reprimanded in the US  Senate for corruption

So on the surface this deal is smelly and reeks of connected developers getting rich on the backs of taxpayers.

Given the OLS’ analysis it’s clear that NJ taxpayers are being shafted.  The question is, “are Trenton taxpayers getting any benefit?”

First, we have to assume that Trenton taxpayers are suffering from this bad investment in a similar manner to our suburban friends.    Our State income tax dollars are being wasted.

Then there’s the matter of lost property taxes that many in the activist community have complained about.   This is trickier.

The deal is that a developer would pay no new taxes on improvements to a property for 10 years.   During years 10 – 20 taxes on improvements would gradually be raised to reach 100% by year 20.

So this could stimulate new taxes, just not in some of our lifetimes.    There is no guarantee that any property in Trenton could ever be developed (many abandoned properties have negative value).   So getting something on those difficult plots of land  and having the State stimulate that future tax benefit does have a positive benefit.  Perhaps that’s what our Council members are reacting to (I’m giving them the benefit of a doubt).

But here are the problems:

The deal is unfair

This tax break is not available to all citizens or even all types of investment.  For instance, there are exclusions on retail investment such as stores and restaurants.  The deal is not available to homeowners or even condo owners.    You and I can’t benefit from this Act and are in fact subsidizing those that do. The state and city should not be in the business of preferring one type of investment and one type of investor. They’re not that smart.

The deal will have unintended consequences

Trenton does not have unlimited developable land.  The Act heavily incents developers to build non-retail commercial space or residential rental property.  If all the prime development spots were taken for these purposes, then the price of retail and owner occupied development will go up.   Many in Trenton’s revitalization community believe that if anything, Trenton needs to over index on owner-occupied housing and new retail amenities.  This bill is likely to make that more difficult.  In this regard we’re shooting ourselves in the foot.

There are better alternatives

A maxim in real estate development is that a building or land should find its highest and best use.   This Act warps that concept by preferring only certain developers with certain kinds of projects.   A better alternative is to establish a standard PILOT agreement and stimulus that are available to anyone investing  in our cities.  One such PILOT plan would offer a very high tax rate on land but a very low rate on improvements thereby rewarding high value or high density development no matter what type it is.  This PILOT could even be made optional to existing landowners.  This would be especially beneficial to home owners seeking to improve their homes.    It could do away with existing abatements and negotiated PILOTs (long an opportunity for abuse).    The state could directly and more transparently provide tax credits on the total value of a project of say $200,000 or more.  This standard subsidy gets the   State out of the dicey business of trying to manipulate the economy.

I suspect that the City of Trenton did not have a real voice at the table when this scheme was cooked up.  Certainly it was foisted on the citizens of Trenton in a rush.  This is a big problem as there is no evidence the State is acting in best interest of Trentonians.

An Act and Ordinance of this scale and importance (it fundamentally   changes our tax structure) should never be considered in the current political situation where a Mayor indicted on corruption charges related to real estate development has only 6 months left in his term.   Rather we need to let the next administration determine whether this deal fits into a strategic plan for Trenton.   Let’s vote on it by making it one of the issues in the upcoming election.

Our City Council has done the citizen of a Trenton a disservice by allowing us to be bullied into the deal. There is an online petition being run to show opposition to Ordinance 13-58. I encourage all to sign it.

Petition to Oppose Ordinance 13-58

My choice for Trenton’s next Mayor

After 24 years of mayoral leadership that has gone from bad to worse, we once again have the chance to change direction in Trenton.  Like we did in 2010, we’ll have a crowded field of candidates.  Unlike 2010, in 2014 we have several viable options.

In this very difficult time in Trenton’s history, we as citizens need to be equipped to make a smart choice.   We’ve all seen how poor choices at the voting booth can materially damage our city.  This time around:

  • Voters need to consider all aspects of what will make a good Mayor, and
  • The campaigns need to communicate clearly to voters.

The question I have for myself is, what can I do to help this process?  What can I do differently in 2014 to help elect a leader that will chart a more productive direction for Trenton?

I’ve tried quite a few approaches to improving Trenton.

  • I’ve blogged for years trying to bring new ideas for revitalization to the city.  The evidence will show that my blogging hasn’t helped.
  • I formed Fix Trenton’s Budget to provide an economic point of view in the 2010 election and later assist Mayor Mack in setting budget and economic policy.  The evidence shows that didn’t help.
  • I helped form The Majority for a Better Trenton in order to create an unaligned political force in the city.  It turns out the group had organizational challenges, so that didn’t help.
  • All along I’ve been an outspoken critic on Facebook, in the press, at City Council and on my blog.  Sometimes that makes me feel better, but it hasn’t helped.

As I’ve often said, doing the same things over and over again in Trenton and expecting better results is the definition of insanity.  So this election cycle I’ll do something I’ve not done before.

This election cycle I’m going to choose one candidate to not only support but also to volunteer for during the campaign.   This implies quite a bit.

It implies that I will have to make my own informed decision about the candidates well ahead of walking into the voting booth.   I’ve done some homework in preparation for my decisions.  I have:

  • Talked to each of the candidates I would consider,
  • Read their websites, and
  • Reviewed their track record in Trenton.

To put all of these conversations, impressions and histories into perspective I created an objective scorecard to help.  The scoring approach rates the candidates along several dimensions and weights the scores based on how important that dimension is for a good Mayor.  It’s like coming up with GPA for the candidate but allowing the flexibility to weight one course as more important than another.

Being numbers driven seems appropriate for me as I’m constantly encouraging city leaders to be objective, unemotional and fact driven in their approaches to our problems.   It’s sometimes hard to do but often provides clarity where a muddle of data and opinion cloud the issues.

For each dimension I scored the candidate 1-10.  The dimensions and weighting are as follows:

Table ‑1 Candidate Selection Criteria

Dimension Weight Description
Approach to Strategy 9% Thinks critically about cause and effect.  Is data and fact driven.  Results focused.
Planning 15% Organized, clear and thoughtful about actions and timing.  Considers risks.
Campaign 12% Well run campaign with people who share a focus on revitalization and diversity.
Motivations 9% Setting an example for urban revitalization in small post-industrial cities.
Management Style 12% Disciplined.  Has an air of gravitas.  Reads people well.  Transparent.
Track Record 12% Has participated in thoughtful activism in Trenton.
Budget awareness 15% Understands the budget and what drives it.  Appreciates its role as the central policy tool.
General Capability 9% Smart.  Hard working.   Well written and well spoken.  Well educated.
Sacred Cows 9% Has revitalization minded positions on regionalization, residency, reassessment, etc.

To be fair I didn’t talk to all of the candidates.  Walker Worthy’s strict partisanship and lack of presence in Trenton politics ruled him out as an option.   Kathy McBride’s frequent missteps, support for Tony Mack and lack of interest in policy rule her out.   Bucky Leggett was so uninspiring the last time he ran that I voted for Doug Palmer.  Each of the other four candidates:  Patrick Hall, Eric Jackson, Jim Golden and Paul Perez are fine people by all accounts, including my own.   They deserved serious consideration.

Of course, whoever I support may very well not win the election.  That’s not the end of the world and we have good options.   I certainly hope that even if I wind up on a losing campaign team, the winning Mayor will take me up on my offer to do whatever I can to help his administration succeed.  I made that offer to Tony Mack, he just didn’t follow through.

Also, I’m not going to say anything negative about any of the other candidates except maybe to critique a policy idea here and there.

After several months of talking and thinking about the next Mayor of Trenton I’ve decided I’d like to support Jim Golden to be our Mayor.

Jim is seeking to bring the best thinking in the country to bear on Trenton’s revitalization problems.  He has good initial insights especially on our crime issues. He has good experience in running large organizations.   He’s been openly committed to setting measurable goals and setting up feedback mechanisms to track our progress.

Jim was an early and vocal critic of Tony Mack and actively supported the recall effort.  He’s conscious of the budget and its limitation, especially the biggest component, police.

In every conversation I’ve had with Jim, he’s sought to think through pragmatic steps towards making Trenton more livable while eventually lowering our tax burden.  Finally, his motivations are simple and clear, he’s a retired resident of Trenton who wants a better town in which to live, so do I.

I’ll enjoy working with him both on the campaign and the transition into office.   I know his heart is in the right place and that he has the right skills and temperament.  Most importantly for me, he did the best in my candidate qualification scorecard, earning 7.7 out of 10 points.

I look forward to working with Jim and his campaign but wish all the candidates well.

The Backlash against “Born and Bred”

Trenton is a boosterish town.  It’s the kind of place where if a visitor said, “My, those buildings look grungy”, his host would say, “Oh no, that’s its patina”.

Ask any Trenton native and they’ll tell you how proud they are of the city, “I’m Trenton Proud”.


We’ve done such a great job running the place that our industry has left town, our education level is among the lowest in the state and we’re on the verge of bankruptcy.  Yea for us! Read the rest of this entry »