BRICK – The governing body voted to renew an ordinance that gives “Mom and Pop” business owners a break by waiving permitting and inspection fees for renting storefronts that have been empty for a year or more and measure 5,000 square feet or less.
Some 21 small businesses have taken advantage of “The Storefront Revitalization Program,” that first introduced in 2015, said Mayor John G. Ducey during the June 11 council meeting.
“This is a program that has been working very well and filling all of the empty storefronts we used to have around town,” he said. “It encourages mom and pop start-up businesses to go into those empty spots rather than building new or going into bigger spots.”
Ducey said the program has been well received around the state, with other municipalities asking the mayor how to go about doing it.
“Our township went through all the heavy work of talking to the DCA [Department of Community Affairs] into allowing us to do this program; we were the first ones in the state,” he said.
According to township records, there were $35,022 in waived fees since the program began. By way of comparison, the total collected fees from 2017 to the present day is $6,784,885. Therefore, the waived fees make up about one half of a percentage of the total fees collected.
The governing body voted 6-1 in favor of the ordinance with lone Republican Jim Fozman voting against it.
Fozman said that with the recent municipal tax hike of just under a penny of $100 of assessed property value, it doesn’t make sense for the township to waive the fees.
“We did this for two years, I thought it was great to get a jump on the businesses. We had a tax increase this year when we could have had a zero rate, but here we are giving away taxpayer money to start a business in town for somebody else,” Fozman said.
Ducey said there aren’t that many qualifying storefronts left. “We filled them all,” he said, but “at the same time we want to continue to incentivize” those who are considering neighboring towns to open in Brick.
When strip malls aren’t filled, weeds start going, they become blighted, people complain, and other tenants move out, Ducey said.
“That’s why we have code enforcement,” Fozman said.
“Yeah but who wants an empty strip mall? That’s an odd position to take,” Ducey said.
Council President Andrea Zapcic asked Township Business Administrator Joanne Bergin if the tax assessment on commercial properties is related to the vacancy rate.
It is, Bergin said, and so is the lease amount.
“So when we fill up these vacant properties, then the tax assessment would go up and we would realize that as a ratable?” Zapcic asked. “We actually collect more taxes when we fill up our storefronts? Am I correct on that?”
Yes, said Township Attorney Kevin Starkey. The analysis of commercial properties is different from residential, which is done by comparable sales. Commercial is often done by an income approach, he said.
“They often find out what value the property has by looking at how much rent the property brings in, so yes, more tenants in these spaces increases the assessed value which then increases the income to the municipality through property taxes,” Starkey said.
Fozman asked if empty stores result in a lower tax rate for the owner of a strip mall.
Starkey said that when a strip mall is vacant, it has a lower value, and when it’s filled it has a higher value.
“It varies for each one,” the attorney said. “As a concept, the more stores that are in our malls in town, the higher the value, the higher the income, the higher the tax revenue is to the township.”
Fozman said it goes both ways.
“When it’s empty then they can appeal the taxes,” he said.
“They certainly can,” Starkey said.
Before voting in favor of the ordinance, Councilwoman Marianna Pontoriero said she believes that the investment of a one-time waiver of fees that resulted in 21 businesses opening in Brick helped the town increase ratables.
“I hope we get another 21 businesses in our town that are small businesses…and let them know Brick is a good town to operate in, so I vote yes,” she said.
The next council meeting will be on Tuesday June 25 at 7 p.m.
