HOW IS TRENTON DOING VIS-A-VIS BUSINESS?
Ted Zangari, chair of the Redevelopment Law practice group at the Sills, Cummis law firm and a member of Real Estate New Jersey's editorial advisory board, takes a cautious approach to this week's poll question. Most respondents (75%) expressed their frustration, saying Trenton is asleep at the switch when it comes to business. The remaining respondents were split evenly between the remaining two choices: the state government is doing a great job (13%) and the government needs to improve, but is trying (13%). Zangari gives his take on the situation below:
"Trenton hasn't yet made the connection between economic development and its direct relation to real estate development. State policymakers do not seem to appreciate that there can be no ribbon cuttings, new jobs or new revenue sources without groundbreakings.
"This disconnect is quite troublesome when one considers that, with much of the state's developable land now off-limits due to preservation efforts, what's left to fuel New Jersey's economy are the more challenging smart growth areas that can take years to assemble, entitle and construct.
"Smart growth areas are infinitely more challenging for developers than the greenfield sites of yesteryear—developers used to be able to buy relatively clean land in large parcels from one seller. Now they have to negotiate with multiple property owners and often encounter environmental contamination. The greenfield developer often built low-rise structures and used surface parking, while the smart-growth redeveloper must often utilize more expensive steel and concrete high-rise structures and deck parking.
"The added time and expense of smart-growth redevelopment are on top of unfunded mandates like affordable-housing contributions and prevailing wage requirements that were already rendering the easily developable greenfield sites financially questionable. You're seeing smart-growth redevelopment projects scaled back, postponed or killed. This is not an option for a state that has nowhere else to grow jobs and housing.
"In the final analysis, large-scale smart-growth projects outside of sure-bet places like Hoboken and Princeton won't begin to move forward without exemptions from many state regulations that are more relevant to sprawl development and gap financing in the form of new incentives and grants. And without development in smart growth areas--in the suburbs, in the urban core, on brownfield sites and abandoned railyards, along waterfronts and above train stations--the economic engine of New Jersey will ultimately grind to a halt.
"Governor Corzine has stated that the state can't tax its way out of the fiscal mess in Trenton but must grow its way out. Well, that growth will require affordable housing for the workforce of companies considering expanding or relocating here, and tracts of land large enough to support new research labs, office headquarters and distribution centers. The simple reality is that with development restrictions on much of the Highlands, Pinelands, Meadowlands and Coastlands, it all comes down to Planning Areas 1 and 2. If not there, then where?"
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