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Yes. Each year the Council must vote to adopt the budget.
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A Special Improvement District (SID) is a public/private partnership in which property and business owners elect to make a collective contribution to the maintenance, development, and promotion of their commercial district.
The idea for the SID is modeled on the shared maintenance program of many suburban shopping centers. Tenants of a mall pay a common area maintenance fee to underwrite services that enhance the appearance of the common areas and provide cooperative advertising for the mall and its stores.
A SID works in much the same way. However, because a SID has multiple property owners (not one as in a mall) they agree to the extra fee (assessment). Thus, stakeholders in a commercial district can align themselves in much the same way to improve their area as does a mall operation.
Several advantages from this arrangement are:
A Special Improvement District delivers a range of supplemental services in coordination with municipal services and invests in the long-term economic development of their district. These supplemental services and improvements may include the following:
Funds to pay for SID programs and services are generated from a special assessment paid by the benefited property owners. (Note: Many leases have a clause that allows property owners to pass the SID assessment on to their tenants.) The assessment is billed and collected by the Municipal government and then disbursed to the SID, which in turn delivers the District services.
A SID assessment is a fee that each property owner pays to support the operations of the SID. The sum of all the individual assessments that property owners pay comprises the total yearly assessment of the SID, and underwrites most, if not all, annual operating expenses. The total yearly assessment is unique to each SID. The amount paid by each property owner is determined by a formula that each SID creates for its district during the formation process. Formulas are based upon property size and or value.
Different properties may pay different assessments depending upon their type of zoning classification. For instance, commercial, business and retail properties are all assessed at 100 % of the assessment rate established. Not-for-profit owned and occupied properties generally do not pay an assessment, but may be charged a fee. City, State and or Federal Properties do not pay an assessment. Each district decides on their own how they will assess their unique different property classifications. A business that operates out of a residential property is usually assessed at a lower percentage of the full assessment but is assessed nonetheless.
While property owners and tenants could participate in a voluntary merchants association, the SID model presents two distinct advantages:
No. The services provided by the SID are supplemental to the services provided to the district by the municipality. For example, if a SID provides sanitation services, it will still receive the same level of service from the municipalities Public Works/Sanitation as it did before the supplemental services were added.
Each SID is governed by a Board of Trustees that is elected by the members of the district or in accordance with the by-laws. The Board has a fiduciary responsibility to the SID and hires the management that administers the SID on a day-to-day basis. The Board is divided into classes that include commercial property owners, business owners, retail tenants, public officials, and sometimes residents. The Board should be representative of the district, but the majority of Trustees must be property owners.
SID’s represent a long-term financial commitment; therefore the formation of a new SID requires the support of the property owners, business owners and the tenants in the district. A municipality creates a SID only when there is widespread support among the property owners, business owners and tenants who are fully informed about the proposed program.
There are usually three phases in the formation of a SID:
Some examples include Livingston, Springfield, Hoboken, E. Hanover, Rahway. However larger municipalities have several SID’s, for instance, Jersey City has 8 different districts, and Newark has multiple districts as well.
Livingston, Springfield, Hoboken, E. Hanover, Rahway, all have varying assessment rates.
They are suggested rates and the budget will be set annually, so can be changed. Right now the suggested rates are based on a budget that relies entirely on assessment funding. If other funding is available, i.e. state grants like Main Street funding, corporate donations, municipal funds such as parking utility or hotel tax funds, or any other such public funds, this would potentially lower the amount assessed, or increase the amount that could be spent.
The Board of the SID will propose a budget it will then be submitted to Council as an Ordinance, noticed to all property owners, and a hearing will take place. The final budget will be set once approved by Council.
SID Sub-Area Map-Enlarged (PDF)
Appendix A (PDF)
All are welcome to participate. There will be Board seats to fill, as well as many committees that will need volunteers. The Board will have term limits, with the design to have a rotation of Board members and the Committee positions will be building a bench for rotation onto the Board. All Board meetings will be open to the public.
The incorporating documents will be available AFTER the ordinance is approved, but before the budget is adopted. The incorporating documents cannot be finalized until the Ordinance is adopted.
Assuming this is both Board members and Committee members. They do not need to live in Princeton unless they are a resident designee. The Board will consist of a mix of property owners, business owners that are located in Princeton or they can be residents of Princeton. There will also be one council member and either the Mayor or Mayor’s designee, on the Board.
The landlord will be responsible for the payment of the assessment. Whether or not the landlord passes the assessment to their tenant is the landlord’s decision.
15 members. 2 from the governing body (Mayor, or designee, and one councilmember), 7 property owners, and 6 business owners, that may include non-profit (s), or resident member (s). (this is still in discussion)
There will be four incorporating officers, selected from the Steering Committee. They will, in collaboration with the Steering Committee, select the Board members.
Everyone who qualifies (i.e. is a Princeton resident, property or business owner), is welcome to join a committee and/or attend the open meetings. Board members will be selected based on the balance of property and business owners and with the goal of having a balanced board of minority and women-owned businesses and property owners.Ideally, having board members of sub-areas would be great but may be very limiting to try and achieve sub-area balance, minority and women-owned balance AND property owner/business owner balance.
Board membership will have term limits so a rotation of the Board will happen annually. The inaugural Board will be divided in thirds, with one, two and three-year terms, to assure new Board members may rotate in annually.
The SC compared rates to other municipalities’ SIDs. Some were much higher, but since the area encompassed all of Princeton, (not wanting to leave anyone out) it enabled the rate to stay low throughout town. The Tiers of 1, 1.5, 2, and 3% were based on the anticipated amount of benefit that each area would gain from the SID programs.
Palmer Square and the Shopping Center already operate much like a SID, by offering marketing, events, and additional services to their tenants, and whose costs are already passed onto their tenants. Therefore, it was determined that they would continue to offer their tenants those same services, and would not have to duplicate efforts. The goal being to build a synergistic plan between the three entities to leverage media buys, staffing, and resources.
Attachment A, SID ordinance (PDF)
The DMC will be a not-for-profit (501C) under IRS guidelines which prohibits such activities.