The repeal of the city ordinance restricting chain stores in downtown Jersey City has left some small business owners feeling betrayed and some City Council members feeling confused.
At the request of Mayor Steven Fulop and downtown council member Candice Osborne, the city passed an ordinance in 2015 that restricted chain stores in order to help protect mom and pop stores downtown. The ordinance said only 30 percent of commercial space in the Downtown district can be rented to businesses that have 10 other outlets within 300 miles of Jersey City.
“We were told when we passed this that it was legal.” – Candice Osborne
“This is the reason I always thought the City Council should have its own attorney,” Osborne said. “We were told when we passed this that it was legal.”
The repeal of the ordinance will come up for a public hearing and final passage at the June 7 council meeting. Some council members are expected to raise objections to the repeal.
Similar restrictions against chain stores exist elsewhere in the country, as near as Montclair.
Downtown is an area around the Grove Street PATH station. It has a mixture of brownstones and other residential properties. Ground floor businesses operate along Grove Street, Newark Avenue, and number of other streets in the area.
Because of the wealth of the area, it is become attractive to larger chain businesses, putting pressure on local shops that may lack the resources to compete. The council repeal would allow building owners to rent to chain stores.
It seemed like a good idea in 2015
When promoting the ordinance in 2015, Fulop said part of the attraction of Downtown is the somewhat quaint feel. Many people have compared the Grove Street area to Greenwich Village. There are a number of art galleries, many restaurants, and small boutiques.
“That part of the city is at the tipping point,” Fulop said. “We do not want to lose the mom and pop stores we have because people want to do business with them.”
But state business associations and larger businesses have opposed the ordinance from the start. They would like to tap into the wealth of the downtown community.
The restriction affects any proposed store that is in one of the downtown redevelopment zones, or in a building that has received a tax abatement.
“Redevelopment plans give the development community extremely beneficial zoning and this is a part of the requirements they must fulfill as a result of that benefit,” said Osborne.
But a new planning director for the city reviewing the ordinance said the law may violate interstate commerce provisions because of the wide geographical range it uses which crosses over state boundaries, city officials said.
Matt Ward, of the Department of Planning, told the council in April that the restriction may not comply with federal laws.
“We need to do more study on case law,” he said, noting that the law might be seen as a violation of state and federal laws, in particular federal regulations governing interstate trade. “They may be covered under the equal protection clause of the 14th Amendment.”
Ward said the city would look to propose a revised ordinance that would not be in violation.
Similar ordinances have been successfully enacted in Virginia and North Carolina and have apparently withstood legal challenge.
Is it a lost cause?
Earlier this year, Ariel Zaurov, co-owner of Downtown Pharmacy, successfully lobbied Mayor Fulop to block the CVS because the large store proposed for a few blocks from his two stores would create what he sees as unfair competition.
“If another independent pharmacy was to come into the area, I’d say, fine, that’s competition, but we can’t compete with a store like CVS which would be open 24 hours a day,” Zaurov said. “If it was not legal, why was the law enacted? This is not a time for the mayor to buckle. I understand the mayor doesn’t want to litigate, but putting this two blocks from another pharmacy may be the death of us. I don’t know what the city was thinking.”
Several council members said they intend to save the ordinance and intend to raise the issue at the June 7 meeting.
“There are nine council members and only a couple of told me they are opposed to the repeal,” Zaurov said. “It feels like a lost cause.”
Al Sullivan may be reached at email@example.com.