Rahway introduces 2026 budget with state aid, as downtown demolition sparks dispute
The city credits last-minute state funding for softening this year's tax increase, while a downtown demolition project reveals two conflicting accounts of how a blighted property ended up in the city's hands.
(The Central Jerseyan)
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Chris Howell | July 7, 2026
Rahway City Council introduced its 2026 municipal budget Monday night, along with financing measures tied to the water utility and a downtown parking lot expansion. Every item on the agenda passed. Councilwoman Joanna Miles was absent; all other council members were present and voting.
Business Administrator Matthew Pukavich told the council the city secured $2.175 million in legislative aid from the state last week, which the administration applied directly to this year’s budget. He credited Mayor Raymond Giacobbe’s advocacy at the state level, pointing to a sharp rise in state employee health benefit costs, inflation, and fuel and utility costs as the year’s key budget pressures.
The budget carries a 2.3 percent increase, Pukavich said, working out to about $84 more per year for the average household.
The figures behind the budget were not shared publicly before Monday’s vote. The city’s own paperwork says the full document will be posted on its website on Wednesday. A public hearing is set for the August council meeting.
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City Attorney Robert Landolfi described the water utility bond ordinance as routine refinancing rather than new debt. He said the city is rolling ten years of accumulated short-term notes for water utility work into a single $11.6 million bond issue, alongside a separate rollover of about $36 million in general fund notes, a move he said the city’s auditors recommended after finding it cheaper than continuing to reissue short-term notes each year.
“It’s not the issuance of new debt, it’s purely a financial decision,” Landolfi said.
Most of Monday’s public comment centered on plans to demolish several buildings near the train station, including the former Mangos restaurant, to build a temporary municipal parking lot.
Resident Andrew Garcia Phillips said the properties were bought years ago by a developer he identified as the builder of Metro Rahway and Reba, and described as a major donor to the Democratic Party and the mayor’s family foundation. He said the developer allowed the properties to sit vacant before petitioning the city to declare them in need of redevelopment, a request the city’s attorneys and engineers approved. He also cited an earlier variance for a 12-story building on the site, which he said the mayor had suggested would likely end up closer to six stories, and asked why the plan shifted to surface parking instead. He said the Mangos building has a significant asbestos problem requiring costly remediation.
Landolfi offered a different account. He said Mangos was purchased under a prior administration through the city’s former parking authority, which Mayor Giacobbe abolished as one of his first acts in office, for “running out of control.” He called the property a liability inherited from that earlier authority, not a decision of the current administration. He said the city rejected a development proposal for the site and that the temporary lot is meant to generate revenue as the city looks for “a meaningful development” later on.
The Central Jerseyan has not independently verified either account of the property’s ownership history.
The same ordinance also covers Main Street properties tied to the long-vacant former Monchy’s Colombian Grill, on the opposite side of downtown. Neither the council nor any public commenter addressed that portion of the ordinance on Monday.
The council awarded the cell tower lease sale contract to TPA VIII, LLC, doing business as TowerPoint, for $6,653,000, covering lease rights on the water tower on Westfield Avenue and the DPW property on Hart Street. Five companies bid, with a $6 million floor set in advance. Pukavich described the award as going to the highest bidder. The city has not said what the proceeds will be used for.
Editor’s note: The Central Jerseyan is free to read and supported by advertising. If you value this kind of local reporting and want to help sustain it, you can become a citizen supporter on Patreon. Your contribution helps fund continued coverage of local government, schools, and community issues.