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Jersey City files $400 million lawsuit against Port Authority over tax agreements

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Jersey City files a $400 million lawsuit against the Port Authority over tax agreements.
Jersey City files a $400 million lawsuit against the Port Authority over tax agreements. - (Steven Fulop / Facebook)

After first pledging to do so in November, Jersey City Mayor Steve Fulop announced Thursday that the city had filed a $400 million lawsuit against the Port Authority of New York and New Jersey over tax discrepancies for properties it owns.

Fulop has long contended that outdated deals between the city and the bistate agency on Port Authority sites have cost the city hundreds of millions in lost revenues.

Though attorneys for both sides engaged in preliminary discussions in an attempt to settle the matter out of courts, Fulop said Thursday that “those discussions did not resolve the issues between the city and the Port Authority.”

“We are moving forward with the lawsuit to ensure Jersey City receives its fair share in taxes from the Port Authority,” Fulop said. “We will not be bullied or pushed around.”

In November, then-Port Authority chairman David Samson told NJBIZ that the agency was “in compliance with its legal and contractual obligations.” In the wake of the George Washington Bridge scandal, Samson resigned from his post in March amid inquiries into potential conflicts between his business interests and public actions as chairman.

According to the city, the Port Authority owns 40 properties there but pays no real estate taxes on any of them, saving what would amount to about $18 million annually. Additionally, on 33 of the 40 properties, the city contends it sees no revenue from the agency with just $2.2 million annually coming in on the other seven properties as a result of payment-in-lieu-of-taxes or PILOT agreements between the two entities.

The city also claims it will pursue legal action to block the Greenville Yards waste transfer station, a $118 million Port Authority redevelopment project that would also be subject to a PILOT agreement.

“We feel confident we have a strong case against the Port Authority and will prevail on behalf of the Jersey City taxpayers,” Fulop said. “This type of inequity cannot continue and we are prepared to demonstrate how the people of Jersey City have been caused undue economic harm over the years. This is not just an issue of the Port Authority failing to pay ample taxes, it speaks to the larger issue of how the politics at the Port Authority have continued to negatively impact the residents of Jersey City and New Jersey.”

Although earlier today the Port Authority did not immediately respond to a request for comment on the suit, Port Authority spokesman Steve Coleman said in an email, "The vitality of Jersey City has been important to the Port Authority for many years, and that’s why we invested more than $1 billion to create a modern, robust PATH system that serves tens of thousands of city residents daily.

"It’s also why we acquired and invested millions in the Global Terminal, giving the city a thriving, job-creating port facility."

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Andrew George

Andrew George

Andrew George covers the Statehouse from NJBIZ's Trenton bureau. Born and raised in N.J., Andrew has also spent time as a reporter in D.C., Texas and Pa. His email is andrewg@njbiz.com and he is @AndrGeorge on Twitter.

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