April 13, 2009: In early March the mayor of Hoboken, New Jersey was tarred and feathered by a mob of city residents enraged by a gigantic property tax increase. April Fool late! Twas only an effigy of Mayor Dave Roberts that got the T & F treatment. Still, it's the thought that counts. On May 12th, a mayoral election will be held. Roberts won't be on the ballot; he prefers to leave City Hall on a rail of his own making.
Mile square Hoboken is the jewel of Jersey's Gold Coast, the strip of real estate across the Hudson River from Manhattan. Since the late 1970's wage slaves to the city have flooded Hoboken. Their influx turned a post-industrial dead zone into revitalization heaven. Condo towers were tossed up in Tinker Toy time by developers jazzed with public money (HUD being a prime contributor) government-backed EZ loans, and assorted tax breaks. Local pols delivered the bacon; pay-to-play was the name of the game. Sidewalk cafes blossomed. Bar culture boomed. On weekends chic young booze hounds from all over Jersey crowded the streets looking for a hook-up and a hip place to hurl. Brawling was big too.
Hoboken residents who couldn't get with the glamor-- or the rent gouging-- headed for Hudson County's less glittering burgs. Some folks jockeyed for the few affordable housing cribs not filled by the relatives, friends, and employees of pols and developers. In the early daze of Hoboken's rebirth real estate fever reached such a pitch that it burst into flame. Tenements full of recalcitrant low income tenants were torched by landlords eager to revitalize. The dispossessed struck a few matches too. The incendiary period of the late 70's/early 80's took a number of lives and earned Hoboken the title of Arson City. The period was immortalized in the film “Delivered Vacant”. Beneath its new urban success story Hoboken has never stopped seething. Albeit in less murderous ways.
Circa Arson City the first wave of Hoboken newbies were largely middle income, with careers based in NYC. Some in finance, others in art related or public service professions. Finance types tended to go condo or rent, the others bought brownstones or lofts and got involved in local activism. Wham! High minded progressive met historically corrupt machine. (Democrat to the max, Republicans get scraps.) Over the years good government types won major battles; including keeping Hoboken's waterfront a public promenade rather than a condo amenity. But the war still goes the other way. And strangely, reformers elected to local office, be it in Hoboken or the parent entity of Hudson County, often end up governing just like the hoary pols they replace. Do lashings of public cash and too much power bring corruption as surely as April showers bring flowers? Or is there something in the Hudson County water?
Which in Hoboken sometimes runs brown due to antique water mains. The companion of antique sewers.
In Hoboken's Monsoon season (aka, when it rains for several days) many a basement turns cesspool. Ever since the first condo tower rose to kiss the monoxide sky-- Hoboken lies between maws of the Holland and Lincoln tunnels-- the city's public servants have been so busy greasing wheels for developers they've had no time to redo the city's overburdened 19th century infrastructure. No matter. Homeowners man sump pumps and develop killer pecs. Another plus on the Hoboken health front; traffic clogged streets give drivers time to meditate. And scoping for parking spaces (the pearl beyond price) sharpens vision.
Features such as these, plus the daily Mardi Gras of municipal politics, have kept Hoboken on an upward real estate trajectory. The first wave of middle income migrants was followed by wealthier waves. Chic booze hounds became ever more so. Even Manhattan's hoi polloi are proud to call Hoboken home. (Though they sometimes pretend it's an NYC boro.) When Jon Corzine, former CEO of Goldman Sachs, was crowned governor by Jersey's political bosses he was living in Hoboken. And the real estate prices--! It's not uncommon to find folks who've paid half-a-mil for a one bedroom condo.
Truly, the housing bubble was a miraculous thing.
Property tax assessments in Hoboken predate the bubble high. In the words of one seasoned activist: “Over the years the taxes went up only a little. The rationale was that the development, of which there was a lot, would bring in more money.”
Unless protected by a developer's tax abatement or crony connections, those who came late to the real estate party pay the highest property taxes. (Condo owners in particular.) A recent increase jacked taxes into the strat. The mob that tarred and feathered Mayor Dave Roberts (in effigy) was powered by newer property owners. The tax increase was initially said to be 47%. Shortly after the effigy incident, it dropped to 23%. Mayor Roberts and Judy Tripodi, the state fiscal monitor in charge of city finances, said a mistake had been made. An “incorrect estimate [was] given out by Hoboken finance workers”.*
Hoboken's fiscal year runs from June to June. Last Summer the city council refused to pass the municipal budget presented by Mayor Roberts; the state was required by law to take over the city's finances. Council members who nixed the budget said its numbers were false and hid a mountain of debt. A criticism which has been made for years.
Hudson County's political scene breeds paranoia. Motives are seldom what they seem. Corruption does the Byzantine Twist. Pols get too clever by half and screw not only their constituents but themselves. In light (or darkness) of this atmosphere, even some critics of Hoboken's budget process were suspicious of the state takeover. Suggesting that Mayor Roberts and his city council supporters sat on their hands and let it happen. Suspicion was fed by the fact that the state agency overseeing the takeover is headed by Joe Doria, former mayor of nearby Bayonne. Doria, a Hudson County machine man bar none (and nothing) was airlifted out of debt-ridden Bayonne into his state job as Commissioner of the Department of Community Affairs (DCA) by Governor Jon Corzine. Not a minute too soon. Rumor sez Mayor Doria (in effigy) was about to be dipped and breaded.
Note: Being DCA head gives Joe Doria statewide power over numerous development related issues. He also chairs the New Jersey Redevelopment Authority, the Housing and Mortgage Finance Agency, and Council on Affordable Housing. As well as the New Jersey Meadowlands Commission, a zoning, planning, and regulatory body which controls large swaths of 14 municipalities in northeast Jersey.
Whatever the back story re the state takeover, Commissioner Joe Doria appointed Judy Tripodi, a former member of the DCA, as Hoboken's fiscal monitor. Tripodi gave the municipal budget a hard look and discovered what locals already knew; expenses were massively understated, deficits and over expenditures were eye-popping, and revenue was smoke and mirrors. The Roberts budget came in around $80 million. As redone by Judy Tripodi, it was roughly $121 million. A mega property tax increase was needed. Tripodi declared that the city's tax levy had been kept “artificially low”**.
Hoboken's real estate newbies are clamoring for a city wide property revaluation. Old timers are a tad less enthused about this form of reform. The idea of a look-see at income levels in the city's subsidized and tax abated housing has its supporters. All in all, economy is the watchword. A goodly number of cops and firemen in command positions will be demoted to smaller paychecks. The mayor's salary hasn't been clawed back from its budget line, but the new guy/gal in office*** will doubtless want to work for a dollar a year. Hoboken pols have so many other ways of earning a buck.
Mayor Dave Roberts, a former fireman who ran as a reformer back in the day (his predecessor went down for bribes) owns a hefty hunk of Hoboken real estate. His bar does OK too. And his fireman's pension keeps coming. Roberts presided over a ballooning, fudged budget for eight years. But the budget mess is rooted in practices that predate him. Such as machine reliance on armies of in-sync appointees, public contractors, and consultants. Take legal beagles. For a mile square city (pop less than 40,000) Hoboken seems to require an inordinate amount of assistance from high priced attorneys who just happen to be Jersey political bosses or are wired into the same. Weird accounting science isn't new either. Never put off till tomorrow pie-in-the-sky revenues you can claim for today.
Housing bubble illusion helped pile Hoboken's pie extra high. There would always be new real estate buyers who'd pay more than the last. Their property taxes would cover (sort of) budget excess, as would revenues from businesses that catered to their lives. Which by and large would be supported by a Wall Street that would never falter. Eventually, Hoboken came to rely solely on a real estate based economy, as powered by the financial industry and public money. No backup system was needed.
Even in post-industrial doldrums Hoboken retained a number of light industries. Particularly at the rear of the city. As the Gold Coast boomed these industries continued to chug along, employing blue collar workers from Hudson County's immigrant populations. But as more and more land was needed for luxury residential development, light industry got pushed out. Upon occasion, developers used eminent domain (the right of government to seize private property for public use) to speed the plow. That Hoboken, the jewel of the Gold Coast, continued to be designated in need of redevelopment by government cash cows (HUD being a prime contributor) helped justify the “public use” of eminent domain.
Thankfully, a few manufacturing facilities survived. Word has it that large amounts of tar and synthetic feathers are being produced in underground factories at the back of Hoboken. Each barrel that rolls off the assembly line is carefully stamped:
For Use On Effigies Only.
Carola Von Hoffmannstahl-Solomonoff
*Hoboken tax hike not 47%, after all; final number is 23%, Carly Baldwin, Jersey Journal, 04/08/09
**Memorandum to City Council Members, Judy Tripodi, Fiscal Monitor, 03/06/09
***Alas. Lil' Kim will not be running for Hoboken mayor as reported by ABC Eyewitness News in early April.
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