NEWARK, NJ - The city administration had to tell council members they may not negotiate with developers to get benefits for their wards before approving tax abatements for projects.
East Ward Councilman Augusto Amador expressed frustration over a past controversial project that impacted traffic and pollution in his ward. He did not name the project, but asked city administrators if it would be appropriate for council members to negotiate with developers to make sure the project gives back to the ward in some way.
“To my surprise, when the tax abatement came before us for approval or denial, to my surprise, the list of benefits that the city was getting from this company, nothing was listed specifically for the East Ward,” Amador said Tuesday during a council meeting.
Developers sometimes negotiate to provide services for local residents to make a project more appealing to get approval during the planning phase or for tax abatements. A developer whose project has more than 30 units must also set aside 20 percent of apartments as affordable under the city's inclusionary zoning ordinance.
One councilman expressed shock when COO and interim Director of Economic and Housing Development (EHD) Natasha Rogers said council people are not allowed to negotiate with developers.
“It’s contrary to the roles of what a council person is elected to do,” Rogers said when asked about it during a presentation given to the council about the EHD. “You’re supposed to legislate, investigate and budget the process.”
West Ward Councilman Joseph McCallum, Jr. responded with, “Wow.”
“That's the definition in the book,” McCallum said. “But the formality is that we do a whole lot more than that and that's why the councilman (Amador) is saying that. We need to be in the process because at the end of the day, it falls back on us.”
The West Ward councilman has advocated for his ward in the past. He previously told TAPinto Newark that when he meets with a developer, there are certain things that he asks for before a project gets his support.
Rogers said that each council person is a key component when the EHD negotiates a benefits package with a tax abatement for a project.
Business Administrator Eric Pennington concurred with Rogers. However, he said a council member can ask that a tax abatement that comes up for a vote be deferred until the benefits package for a project in a certain neighborhood includes something for their ward.
“It is the administration's position - and the law - that it is wholly inappropriate for the council to negotiate for a particular project that it will later vote on,” Pennington said Tuesday at the council meeting. “It gives the appearance of impropriety and it gives the clear indication that there's some quid pro quo that's going on that you, in my opinion, should not engage in.”
The city also has a pay to play ordinance on the books. It was approved under Cory Booker administration's and prohibits developers from donating to city politicians.
Under the inclusionary zoning ordinance, developers are sometimes allowed to contribute to the city's Affordable Housing Trust Fund in lieu of constructing subsidized units on-site. That detail raised concern for residents at a recent zoning board meeting for a project in the East Ward’s new MX-3 zone.
Central Ward Councilwoman LaMonica McIver also inquired what happens when a developer who is required to pay into the Affordable Housing Trust Fund does not do so.
“What are we doing legally to get our money rather than sending letters every other month to people who are ignoring us on purpose?” McIver asked during the meeting.
“What we know for sure is that most developers are complying to the housing trust fund,” Rogers responded. “I would like to know what the utilization rate of that is. The end result is that if you're out of compliance then the legal recourse is to pull your abatement."