During the past 30 years, Sharut Furniture in Passaic, N.J., has survived the nationwide decline of the furniture industry as more and more companies import furniture from China and other countries. Unfortunately, having survived the free market, Sharut may still not survive because of a homegrown menace—local politicians’ desire for more tax dollars.
The family-owned business property is located inside of Passaic’s Eastside Development project, the city’s largest. Since 2005, the project’s plan has continually changed. Originally, the plan called for the redevelopment of 99 acres, complete with commercial, residential and industrial areas, but the developer for the residential portion of the plan backed out in December 2006. In light of the setback, Passaic has shifted its focus to developing 25 acres, more than half of which rightfully belongs to Sharut.[1]
Despite there being major questions about whether such a project would ever become a reality, city officials insisted that the remaining parts of the redevelopment area be taken for the proposed retail area and the mere promise of more taxes that could be generated.[2] Unfortunately for the owners and employees of Sharut Furniture, their manufacturing and distribution center lies on the land city officials want for that retail area, which would include a big-box store in addition to other cookie cutter businesses cities usually favor to replace independent businesses like Sharut.
Sharut Furniture began its operation making contemporary transitional furniture in New York 30 years ago. It moved to Passaic in 1993, and employs more than 100 local woodcarvers and carpenters, many of whom walk to work every morning. Today they continue to manufacture household furniture like bedrooms, home offices and entertainment centers. The fact that all of the furniture is made in the United States is a point of pride for Sharut’s owner David Einhorn.
According to Einhorn, in 2005 the city originally pitched the plan favorably to business owners in the area, citing the fact that the plan included a revitalized industrial area around Eighth Street, implying that businesses displaced by the other redevelopment areas would be able to move there. Since then, the land originally intended for that industrial redevelopment has been sold to a private landowner.[3]
But even moving within Passaic would have been a problem. “It would be difficult [to move] because of the size and scope of our operation,” Einhorn explained. “We’re sent orders from retailers like Macy’s and then we manufacture, deliver and install the furniture for those customers.”
Just the threat of eminent domain, however, has sent a chill over the business. Einhorn said he makes a commitment to every client and if he can’t deliver a product, a store is left with an empty showroom.
“Because of my commitment, I hesitate to go into large opportunities because I won’t know if I’ll be able to fulfill them in six or 12 months.”
Einhorn also explained that with the threat of eminent domain, he’s scared to allow his business to grow.
“We have over 100 employees now,” he said. “Growing requires an investment and with the uncertainty, I may lose the property before I see the results of that investment.”
While running Sharut, Einhorn has tried to keep up with the news regarding the city’s redevelopment plans. But he says there has been no communication from the city. He learns of changes in plans and public hearings from the local paper or from chatting with neighbors. Attempts to meet with the mayor and speak at public hearings have been met with indifference and a sense of inevitability in the implementation of the plan.
Einhorn is not against the plan either. He is just against the imposition of the plan on his property without any of his input in regard to the development: “If we are able to do the same plan the city is looking for, would it not be easier for the city to work with us and at least give the property owner the benefit of the redevelopment, considering that we would be losing our business?”
The City of Passiac, meanwhile, would like to replace this business that has made a mark on the local community with another run-of-the-mill business that one can find in any number of cities and towns across the country—all in the name of higher tax revenues. According to Einhorn, Passaic city officials do not understand the character of their own city and do not realize the unique place that the Sharut woodworkers and carpenters occupy in the city’s business community.
“We would to love to stay where we are, from the location to the labor pool—everything,” says Einhorn. “If you want to kill your industrial area, that’s fine, but there will be repercussions.”
It is one of lesson of eminent domain abuse few cities learn before it’s too late. Hopefully, Passaic officials will soon come to realize this reality.
