As seen on: NJ.com
By: Steve Strunsky
When Lynette Lashawn’s retail clothing business outgrew her Newark home, she couldn’t afford rent on city storefronts with decent walking traffic and had to open her Off the Hanger store in neighboring Bloomfield.
And while she and her partner did eventually move the store to Newark, Lashawn said she still hears fellow entrepreneurs complain about their rent, which makes up about 85% of her overhead.
So she welcomed what may be a first-of-its kind initiative by Newark Mayor Ras J. Baraka that’s poised for adoption by the City Council Wednesday. The measure is intended to encourage creation of affordable ground-floor retail space at the base of the apartment towers that have steadily gone up during Newark’s development boom of the past decade.
“I think it’s a great idea,” said Lashawn, 47, who was “born and bread” in Newark. “Especially for entrepreneurs, of course, because we’re always the ones taking the hit.”
The retail ordinance is among a package of affordability measures proposed by Baraka following his May election to a fourth term leading the state’s largest city and amid a nationwide focus on affordability that’s a key issue in next month’s midterms.
A vote to adopt the ordinance is scheduled for Wednesday’s 12:30 p.m. meeting of the council, which unanimously introduced the measure on Sept. 23.
That same day the council adopted a measure intended to make moving into a Newark apartment more affordable, by prohibiting landlords from passing along the cost of a broker’s fee to new tenants.
If adopted, the affordable retail space measure will allow Baraka’s Department of Economic and Housing Development to negotiate rents on storefronts with developers seeking tax abatements for building they plan to construct.
In exchange for agreeing to “affordable” commercial rents, a developer would be entitled to a discount of up to 1% on the payments in lieu of taxes, or PILOTs, they would make under an abatement agreement.
Developers could also opt for an extension of up to five years on the term of their abatement. The new measure would encourage the creation of affordable retail space the same way the city encourages construction of affordable housing: by piggy-backing affordable components onto otherwise market-rate projects.
For example, Newark’s “inclusionary zoning” ordinance requires that 20% of all apartments in a new building of at least 15 units be set aside for people earning moderate, low and very low incomes relative to region’s median family income, with rents set accordingly….