Friends of Rahway Business, LLC

OCTOBER 20, 2015

 

Rahway

          A judge threw out Rahway's efforts to expand the city special improvement district to include more than 500 businesses. (

RAHWAY — In a major setback for city officials' improvement plans, a Superior Court judge struck down Rahway's huge expansion of the Special Improvement District on Monday, saying the city wrongly tried to include nearly every non-residential property within the municipality.

Last November, the city council passed an ordinance that quadrupled the number of businesses in the district, from 138 to 521. All businesses in the district are assessed a special tax to be used for improving the district and the city.

Earlier this year, about 40 businesses owners formed the Friends of Rahway business and filed suit against the city, claiming the ordinance violated state regulations for improvement districts.

 

 

 

Superior Court Judge Karen Cassidy agreed with the business owners and threw out the ordinance.

Cassidy, in her decision, said the city admitted including all business properties within Rahway's border's in the new district, far more than state law intended for special improvement districts.

"It is improbable that the legislature intended an entire city should be considered an SID. If this were the case, every municipality within the state would have municipality-wide SID ordinances, collecting special assessments from each non-residential property," Cassidy said in her decision.

William Michelson, the lawyer who represented the Rahway business owners, said the special assessments were included in tax bills that went out in July. Michelson said it is uncertain what will happened to those added assessments that business owner have already paid.

"This is a black eye that the city did not need," said Michelson, whose office is in Fanwood.

Rahway Mayor Samson Steinman said the decision will delay plans for improvements to businesses. Revenue from the expanded district was intended to fund a variety of programs, including facade improvements and micro-loans for shop owners.

"I think this is a blow to small businesses in town," Steinman said.

Expanding the district was expected to boost the SID budget from $130,000 that had been collected annually for the last 20 years, to about $750,000, city officials said.

Steinman said he will review the decision with other municipal officials before deciding what action to take.