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AN ORDINANCE AUTHORIZING THE CREATION OF A SPECIAL IMPROVEMENT DISTRICT IN THE CITY TO BE KNOWN AS THE GREATER NEWARK TOURISM IMPROVEMENT DISTRICT.
Deferred 6F-b 011613
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WHEREAS, there exists a need and desire to increase and improve the marketing and development of Newark and the greater Newark region as a year round destination and to avail itself of and leverage its geographic location relative to Newark International Airport, New York City and the greater northeast region of the country; and
WHEREAS, Newark has experienced some recent investments and development, such as NJPAC and the Prudential Center, that have had a measurable impact in attracting tourism; and
WHEREAS, there is a need to take affirmative and significant steps to continue such efforts and to further support the investments that have taken place so far through careful and considered marketing and development efforts and to facilitate supporting businesses and industries to capitalize and expand upon such improvements; and
WHEREAS, the hotel industry is a crucial aspect to such efforts to expand upon and improve the marketing and development of Newark and the greater Newark region as a year round destination in the region and the establishment of a funding mechanism and a program of self-help initiatives specially-benefitting the hotel industry is expected to result in the promotion of the above goals for the overall betterment of the City as well.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
Section 1: Definitions.
a. "Special Improvement District" (sometimes referred to as the "District"), means an area within the Municipality designated by municipal ordinance as an area in which a special assessment on property within the District shall be imposed for the purposes of promoting the economic and general welfare of the District and the City.
b. "District Management Corporation" means the Greater Newark Tourism Improvement District Management Corporation" (also referred to as the "Management Corporation"), an entity to be incorporated pursuant to Title 15A of the New Jersey Statutes and designated by this Ordinance to receive funds collected by a special assessment within the District, as authorized by N.J.S.A. 40:56-65 et.seq. and this Ordinance and any amendatory supplemental ordinances.
Section 2: Findings. Pursuant to N.J.S.A. 40:56-65, et seq. (the "Act"), the Governing Body of the City of Newark hereby determines the following:
a. That the enhancement of business and leisure tourism present an untapped source of employment opportunities and tax revenues which can enhance the economic well-being of the City of Newark and its residents.
b. That the hotel industry properties and businesses described by Bl;ock and Lot and street address as set forth in Schedule A of this Ordinance are an integral, vital economic and social component within the City and that the creation of a Special Improvement District including and benefitting such properties and businesses will serve to enhance the safety, welfare and economic growth of the District and, consequently, the residents of the City as a whole.
c. That through creation of a District Management Corporation to provide administrative and other services, the hotel property and businesses owners and operators of the District, and residents and consumers, will benefit, and the City will have added ability to promote tourism and economic growth and employment.
d. That all costs for the administration and management of the District should be funded by a special license fee assessment imposed and collected by the City on the hotel properties identified in Schedule A who benefit from and facilitate tourism within the District and within the City. Such levy shall be collected by the City and shall be transferred to the District Management Corporation to effectuate the purposes of this Chapter and to exercise the powers granted to it pursuant to this Chapter.
e. That it is in the best interests of the City and the public to create a Special Improvement District and a Management Corporation to administer the District.
f. That the hotel industry and business community should be encouraged to provide self-help and self-financing programs to meet local and regional needs, goals and objectives through the formation of an independent District Management Corporation formed under Title 15A of the New Jersey Statutes.
Section 3. Establishment of the District.
a. Based upon the findings hereinabove set forth and the interests of the hotel business owners, merchants and property owners comprising the District, there is hereby established the Greater Newark Tourism Improvement District ("TID" or the "District") as a Special Improvement District within the City of Newark pursuant to the provisions of the Act.
b. The District shall consist of all hotel properties within the City of Newark, which are identified by street address and by Block and Lot designation in Schedule A hereto. Included among such properties identified in Schedule A are two properties that are currently under construction, which properties shall not be subject to license fee assessment until after obtaining a certificate of occupancy. Schedule A may be amended by Ordinance to add new hotel properties or to delete properties which have a change of use from hotel to other uses.
c. This Ordinance contemplates that other contiguous municipalities may form similar special improvement districts and such municipalities special improvement districts, which are authorized to participate in the TID established by this Ordinance and share in the benefits of the efforts of the District Management Corporation based upon license fee assessments to be established that are commensurate with level of benefit received by such participants. Any such participating municipalities' special improvement districts shall pay license fee assessments to and be managed by the District Management Corporation designated pursuant to Section 5 herein.
Section 4. License Fee Assessments.
a. All costs of improvements and maintenance, other than those costs of improvements and maintenance normally incurred by the City of Newark out of general funds, shall be financed through a business license fee, pursuant to N.J.S.A. 40:56-85, and determined by the District Management Corporation.and approved pursuant to N.J.S.A. 40:56-80. Hotel owners in the TID shall pay a license fee assessment of not less than 1.5% of the hotel room rate charged and actually paid and shall pay a license fee assessment of not less than 1.5% of room rates charged and actually paid. For example, if a hotel has 75 rooms and rents out 50 of those rooms at a rate of $100 per room, the hotel shall pay a license fee assessment of $75.00 for that day. The license fee assessment rate may be increased only if requested by a majority of the Board of Directors of the District Management Corporation.
b. No license fee assessment shall be due based upon rates collected on stays in rooms from 91 days and thereafter for any rooms rented for a stay of greater than ninety (90) days, but there shall be license fee assessments due for the initial ninety (90) day period. No license fee assessment shall be charged based upon any room occupancy that was booked or reserved and paid for prior to December 1, 2012. Any hotels subject to an assessment imposed by any other special improvement district within the City shall be entitled to deduction from the license fee assessment due pursuant to this Ordinance in an amount equal to the assessment paid by such hotel owner into such other special improvement district. Such deductions shall be determined by dividing the annual assessment paid to the other special improvement district by twelve (12) and deducting that amount from each monthly license fee assessment payment due pursuant to this Ordinance.
c. License fee assessments shall be collected by each hotel owner or operator as a regular additional "room charge" imposed upon such hotel owners and operators based upon actual room rentals. Hotel owners and operators shall pay all such license fee assessments in quarterly installments due with regular real property tax payments each February, May, August, and November, which payments shall be received by the City Tax Collector and paid over to the Management Corporation by the end of each month in which the license fee assessments are collected. The City Tax Collector shall withhold from each monthly payment an Administrative Fee of .0025% of the amount actually collected by the Tax Collector. All license fee assessment payments collected by the Tax Collector shall be placed and maintained in a special account that shall at all times be segregated from general municipal funds.
d. The City shall pay over 25% of the budget for each of the first three quarters of the tax year in February, May and August. In the final quarter, the City shall turn over the remaining license fee assessment funds actually collected and shall be under no obligation to fund or subsidize any shortfall in anticipated license fee assessment revenues.
e. Unpaid license fee assessments shall become a lien against the underlying property and shall be collectible in the same manner as any other municipal property taxes and assessments as provided by the laws of the State of New Jersey.
Section 5. Designation of the District Management Corporation.
a. There shall be formed a New Jersey non-profit corporation called the "Greater Newark Tourism Improvement District Management Corporation" (hereinafter the "Management Corporation"), which shall be the District Management Corporation for the TID.
b. The Management Corporation shall be an organization without membership.
c. The Board of Directors of the Management Corporation shall consist of twenty-five (25) persons who shall, in the first instance, be selected by the Brick City Development Corporation Tourism Advisory Committee. Thereafter, with the exception of the At-Large Directors, the Board of Directors shall be responsible for the appointment of future and replacement Board members. The representative of the Board of Directors shall be comprised of the following:
(i) Nine (9) Hoteliers (which may include Hotel owners and/or directors), this number may be increased as more hotels enter the District or decreased if any hotels cease operations in the District.
(ii) three (3) At-large representatives, which shall include:
(a) the CEO of Brick City Development Corporation,
(b) a Member of the Newark City Council, and
(c ) the Mayor's Designee;
(iii) the remaining members shall be comprised of representatives from the following industries:
(a) representatives of transportation industries
(b) representatives from the restaurant industry
(c ) representatives from areas attractions
(d) representatives of the media industry
(e) representatives from the arts/culture industry
(f) representatives of area associations.
This organizing Board shall, upon appointment, assume the management of the District and shall adopt bylaws governing the procedures of the Board.
The non-Hotel Directors shall each have a vote with a value of 1 person = 1 vote. Each Hotelier Director shall have a vote with a value of 1 person = 2 votes.
d. The Management Corporation, as the managing entity, shall have all powers necessary and requisite to effectuate the purposes of this Chapter and the District. Such powers shall include, without limitation:
(i) Adoption of bylaws for the regulation of the affairs of Management Corporation and the conduct of its business and the prescribing of rules, regulations and policies in connection with the performance of its functions and duties.
(ii) Employment of such persons as may be required to carry out the business of Management Corporation and to fix and pay their compensation from funds available to the management entity.
(iii) Retention of legal counsel.
(iv) Application, acceptance, administration, and compliance with requirements respecting an appropriation of funds or a gift, grant or donation of property or money.
(v) Making and executing agreements which may be necessary or convenient to the exercise of the powers and functions of the management entity, including contracts with any person, firm, corporation, government agency or other entity.
(vi) Administration and management of its own funds and accounts and payment of its own obligations.
(vii) Borrowing money from private lenders and from government entities.
(viii) Acceptance, purchase, rehabilitation, sale, lease or management of property in the District.
(ix) Enforcing the conditions of any loan, grant, sale or lease made by the management entity.
(x) Undertaking improvements designed to increase the safety or attractiveness of the District.
(xi) Publicizing and promoting the District and the businesses included within the District boundaries.
(xii) Taking any other actions that are necessary and proper to achieve the purposes of this Chapter and that are otherwise permitted by law.
e. The Management Corporation shall utilize affirmative action goals and guidelines in its hiring and expenditures whenever possible. Pursuant to N.J.A.C. 17:27-5.2, the Management Corporation will not discriminate against any employee or applicant for employment because of age, race, creed, color, national origin, ancestry, marital status or sex. The Management Corporation will take affirmative action to ensure that such applicants are recruited and employed, and that employees are treated during employment without regard to their age, race, creed, color, national origin, ancestry, marital status or sex.
Section 6: Annual Budgets; Reports.
a. The Management Corporation shall operate on a calendar year basis, January 1 through December 31, inclusive.
b. Not later than December 1 of each year, the Management Corporation shall submit a detailed business plan and budget for the upcoming year, for approval by the Governing Body pursuant to N.J.S.A. 40:56-84. The budget shall be accompanied by a report explaining how the budget contributes to the goals and objectives for the District.
c. The budget shall be introduced, approved, amended and adopted by resolution passed by not less than a majority of the full membership of the Governing Body.
d. The Management Corporation shall cause an annual audit of its books, accounts and financial sections to be made and filed with the Governing Body. Such audit shall be completed and delivered to the Governing Body within four months after the close of the fiscal year. A certified duplicate copy of the audit shall be filed with the Director of the Division of Local Government Services in the State Department of Community Affairs within five days of the filing with the City. The Management Corporation shall employ a certified public accountant licensed by and practicing within the State of New Jersey to perform the required audit.
e. The Management Corporation shall submit an annual report to the Governing Body pursuant to N.J.S.A. 40:56-80 within 30 days of the close of the fiscal year. The report shall consist of a narrative covering the previous year's operation and detailed financial statements.
Section 7: Municipal Powers Retained.
Notwithstanding the creation of the Special Improvement District, the City of Newark expressly reserves and retains all its police powers and other rights and powers related to the area within the District.
Section 8: Triennial Review.
The City Council shall review and assess the effectiveness of the TID on or about October 15, 2015, and shall consult with representatives with an interest in the hotels paying the assessment hereunder, and consider such factors as room rates, occupancy rates, and reports from included hotels.
Section 9: Severability.
All ordinances or parts of ordinances inconsistent with the provisions of this Ordinance shall be repealed to the extent of such inconsistency only. Should any section, paragraph, clause or any other portion of this Ordinance be adjudged by a Court of competent jurisdiction to be invalid, such judgment shall not affect or impair the remainder of this Ordinance.
Section 10: Effective Date.
This Ordinance shall take effect upon final passage and publication as required by law.
STATEMENT
This ordinance authorizes the creation of a Special Improvement District within the City opf Newark to be known as the Greater Newark Tourism Improvement District for the hotel industry properties and businesses as set forth in Schedule A attached herin