Redeveloper Pay-to-Play is Coming to Newark

The City of Newark has had a contractor pay-to-play executive order in effect since 2007, which specifically excludes redevelopment contracts.  All that is about to change.  In one week, a new redeveloper pay-to-play ordinance will take effect in Newark.  The Newark redeveloper pay-to-play ordinance has been under consideration for quite some time, but was not passed by the City Council until May 4, 2011.  The ordinance will take effect on Thursday, June 2, 2011 and bars redevelopers from contracting with the City of Newark if the redeveloper has made or solicited a contribution greater than $300 to a covered recipient within the year period prior to the contract.  The ordinance defines the term “redeveloper” to include: any person or entity entering into a contract with the city, or with another redeveloper, for the rehabilitation of any area in the City of Newark.  The definition includes: those with a 10% or greater ownership in the entity, partners, officers, subsidiaries, and the spouses and adult resident children of the 10% or greater shareholders, partners and officers. Covered recipients include:   

• A holder of or candidate for Newark elective office;
• A Newark municipal political party committee;
• An Essex County political party committee; and
• Any PAC that regularly engages in the support of Newark municipal campaigns.

The ordinance also contains a $3,000 aggregate limit on contributions to covered recipients during the four-year municipal election cycle. The Newark redeveloper ordinance permits covered persons and entities to make and solicit contributions up to the reduced limits set forth above both during the one-year period prior to entering into a contract with the City of Newark and during the term of any such contract. Unlike many contractor pay-to-play ordinances, not only does the Newark redeveloper pay-to-play ordinance cover contributions by the persons and entities listed above, but the ordinance also covers contributions by certain professionals, consultants and lobbyists contracted or employed by the business entity ultimately designated as the redeveloper.