N.J. reviewing Mount Holly's UEZ program

When Mount Holly was run-down and broke in the 1990s, a prominent Burlington County family stepped in to revive the township with a blend of community service and business savvy.

Audrey Winzinger was among the volunteers who applied to make Mount Holly an Urban Enterprise Zone (UEZ) as part of a state program aimed at spurring economic development in struggling communities. Then she joined the local board that helps decide how the money is spent.

Companies and properties owned by Winzinger's mother, Joanne, went on to receive at least $700,000 in UEZ funds that helped drive Mill Race Village, a group of shops that replaced a neighborhood of shoddy buildings and absentee landlords.

In recent months, Mill Race Village has urged its retailers to write to lawmakers and Gov. Christie to keep the program, which faces cuts amid New Jersey's fiscal crisis.

But the Mount Holly program is drawing scrutiny. The state UEZ Authority is reviewing records to determine if some of the people involved have conflicts of interest, according to Lisa Ryan, a spokeswoman for the Department of Community Affairs.

The nature of that review is unknown, but a close examination reveals how the funds disbursed in the Burlington County seat have ties to several Urban Enterprise Zone Board members, most notably Audrey Winzinger.

In March, Christie said he would freeze UEZ money to help plug the budget deficit, though shovel-ready projects will be funded under a compromise reached this week. The state forgoes $100 million a year in tax revenues to fund 32 UEZs.

Christie also directed a review of whether UEZs stimulate economic development, while an auditor's report in April found the program in need of more accountability.

Joanne and Audrey Winzinger denied conflicts of interest, noting that Audrey Winzinger did not vote specifically on her mother's projects. State policies allow companies with ties to a board member to receive UEZ money, as long as the board official does not vote on the allocation.

Also, local boards do not have unilateral influence over how funds are spent. With applications for UEZ loans, for example, an independent loan service makes recommendations to the local board, and actions generally need state approval as well.

The UEZ designation permits participating businesses to charge 3.5 percent sales tax, or half the standard rate. Those funds then go back into the zones to encourage businesses with loans and grants for marketing, improvements, and expansions.

The program hasn't been a cure-all: The downtown still has vacant storefronts.

Yet Audrey Winzinger said the program stretches the dollars of private investment "so much further," and speeds up development of a critical mass of retailers that can make an area a destination, pointing to the 18-store Mill Race Village as an example.

To John Tegley, the program was Mount Holly's last hope when he was township manager in the 1990s. And as he saw it, the Winzingers were interested in fixing up the township's run-down properties when nobody else was.

The family is best known for Winzinger Inc., a construction and demolition company in Hainesport. Its chairman is Audrey Winzinger's father, Robert Winzinger; the president is Joanne Winzinger. Audrey Winzinger, a lawyer, said she is employed there to handle contracts.

Her sister, Robin Winzinger, has operated a popular restaurant in Mount Holly called the Robin's Nest since the 1980s. The area had been in decline, and getting people to come there could be tough, recalled Joanne Winzinger.

She said they formed a plan to buy the houses nearby, and put shops on the first floor and apartments above. With the Winzingers already in the demolition business, she said, they could put nicer materials in the upper-floor dwellings while keeping "the rent down downstairs, and then [the shops] could get UEZ help."

In the late 1990s, Joanne Winzinger began buying properties inexpensively there under Mill Race Inc., which named her as president and Audrey Winzinger as agent, according to business filings.

Audrey Winzinger listed herself as the contact for Mill Race Inc. on forms to certify it as a UEZ business, and records show she also met with a state UEZ official to ask how funds could help acquire and rehab properties.

By 1997, Mill Race had won an award for leading UEZ efforts downtown and received approval for grants to renovate building facades.

Substantial funding came in the form of a $300,000 loan approved in 2001 for the Mill Race Village streetscape, which the UEZ worked to make no-interest and forgivable as Joanne Winzinger was repeatedly past due on another UEZ loan, records show.

In 2006, Audrey Winzinger voted to authorize $100,000 in marketing funds for zone businesses. When the program was up for renewal in 2007, she offered praise and noted it had helped the Robin's Nest. She voted to continue it.

Also that year, she voted to authorize $310,000 for the Good Neighbor Loan program. Within months, the board approved such a loan for Mill Race of $205,000, without her vote.

Winzinger voted in 2009 with the board to raise the reimbursement rate for certain grants from 50 percent to 80 percent. Without her vote, the board four months ago approved the same type of grant for a Mill Race property.

Audrey Winzinger has also written to officials directing them how to process invoices for Mill Race, and she has spoken on behalf of the company before the board. But she said that while she sometimes helped out, she receives the same pay from Winzinger Inc., listed as her source of income on disclosure forms, whether or not Mill Race does well.

"It's not like these grant programs are set out to be given to any specific person," said Kevin Mizikar, the Mount Holly UEZ coordinator until funding cuts led to the elimination of his job last month.

"I think when I vote on the Good Neighbor Loan program or really anything, I'm voting because it's a good thing for the UEZ businesses, for Mount Holly," said Audrey Winzinger.

Citing rule changes requiring higher-cost, prevailing-wage labor on many UEZ projects, she said the board increased the reimbursement rates because not enough businesses were using the grants.

In a UEZ Board discussion of the new rules in fall 2006, Audrey Winzinger said it would be hard to find three construction companies to give a quote using prevailing wage. "We are going to have to be lenient," meetingminutes state.

The Department of Labor and Workforce Development has confirmed it is investigating a Mount Holly UEZ project for alleged violations of prevailing-wage rules.

The project, which has ties to other board members, is to reconstruct 137 and 141 High St., properties that had long been in disrepair at a key intersection near the Burlington County Courthouse.

Richard Alaimo, who helped write the original UEZ application and sits on the board, voted for the demolition and acquisition of the site in 2001. Following delays, in 2007 he wrote to the UEZ with an estimate for his firm to do related engineering work, for which it was paid that year.

The Alaimo Group, also a campaign donor to township council members, has done work associated with several UEZ projects in its capacity as the longtime municipal engineer.

Alaimo noted that at the time of his vote his company did not have a contract for the demolition, saying: "The township sometimes calls us and says, 'Do the job,' and sometimes they give it to someone else. . . . We're not assured of having any contract related to that work."

Lawyer James Grace and a partner were named developer and approved for a $475,000 loan before Grace joined the board in 2007. He said he joined because he wants to see Mount Holly improved; the township solicitor determined then that he had no conflicts of interest.

With Alaimo absent, Grace and Winzinger voted with the board in January to allow companies owned by or affiliated with board members to receive UEZ funds as long as they do not vote for them, in line with state rules.

The board rejected another policy that would have banned those ties altogether.