Jersey City suing the Port Authority for $400 million

[MÇA]

Jersey City, Port Authority settle dispute over taxes
By Terrence T. McDonald
The Jersey Journal

Nearly four years after Jersey City filed a $400 million lawsuit against the Port Authority of New York and New Jersey, the two sides have agreed to settle the dispute.

The deal comes one month after both sides met in a federal courthouse in Newark for a three-hour hearing that saw the bi-state agency attempt to get the lawsuit thrown out.

There are few public details about the agreement, which neither side agreed to provide. A Port Authority spokesman said its board of commissioners is scheduled to consider approving it at a meeting next week.

In a statement, Jersey City said the Port Authority has agreed to pay the city $17.8 million for the ownership of a Washington Street parcel that will be the site of new PATH transformers; transfer ownership of the Powerhouse building to the city; increase tax payments it makes to the city by 70 percent annually; and perform a study on the feasibility of a PATH station in the city's Marion section.

"Today's announcement of our agreement with the Port Authority is the major step in reshaping our relationship with an entity that is a major force in Jersey City," Mayor Steve Fulop said in a statement. "This resolution is a positive one for our residents, bringing over $35 million to Jersey City as well as a renewed commitment to several important projects." Read more

[MÇA]

Judge OKs Jersey City suit against Port Authority
FEBRUARY 18, 2015, 2:56 PM    LAST UPDATED: WEDNESDAY, FEBRUARY 18, 2015, 6:45 PM
ASSOCIATED PRESS

NEWARK — A $400 million lawsuit against the Port Authority of New York and New Jersey over property taxes in Jersey City can proceed, a federal judge ruled Wednesday.

U.S. District Judge Susan Wigenton denied the Port Authority's motion to dismiss the lawsuit, though she dismissed two counts in the nine-count complaint and ruled that they can be re-filed.

Jersey City Mayor Steven Fulop sued the Port Authority last May for what he claimed were unpaid taxes, penalties and fees for dozens of Port Authority-owned properties in the city. At the time, Fulop estimated taxes, payments in lieu of taxes and other payments would historically yield about $315 million in additional tax revenue and about $18 million per year.

"Today was an important win for the city as the judge refused to dismiss the lawsuit as the Port Authority requested,"  Fulop said. "This is validation that our complaint has merit and can now move forward."

In addition to operating the region's major airports, bridges and tunnels and the World Trade Center site, the Port Authority owns four PATH rail stations in Jersey City, a PATH command center, parts of the port complex and other properties. Read more

[MÇA]

Jersey City files $400M lawsuit against Port Authority, alleging unpaid taxes
By Terrence T. McDonald/The Jersey Journal
on May 22, 2014 at 12:15 PM, updated May 22, 2014 at 1:16 PM

Jersey City today filed a $400 million lawsuit against the Port Authority, alleging the bi-state agency owes back taxes on the dozens of properties it owns citywide.

Mayor Steve Fulop revealed to The Jersey Journal six months ago that he planned to file the suit, and in a statement issued by his spokeswoman today, he said the city "will not be bullied or pushed around" by the Port Authority.

Months negotiation between the Port Authority and the city have been unsuccessful, according to Fulop.

The city also intends to pursue legal action to block the Port Authority's planned $118 million waste transfer station at Greenville Yards on the city's southern end.

The lawsuit, filed in federal district court, will "ensure Jersey City receives its fair share in taxes from the Port Authority," Fulop said in the statement.

The bi-state agency owns 40 city properties, but pays "no real-estate taxes on any of them," the city's complaint reads. If the Port Authority paid traditional taxes, the city would gain $18 million annually, according to the complaint.

"While the Port Authority has benefited handsomely from its acquisition and ownership of properties in the city, the city has suffered an undue loss of taxes," the 62-page complaint reads.

A Port Authority spokesman could not immediately be reached to comment. Officials at the bi-state agency, which has been under fire for months for issues related to the controversial George Washington Bridge lane closures, have been mum about Fulop's lawsuit threat, saying they won't comment on pending litigation.

According to Jersey City, the Port Authority pays $2.2 million in payments in lieu of taxes (PILOT) for seven of its 40 city properties.

The city cites the Journal Square transportation hub as an example of where it loses money because of what it calls "outdated" PILOT agreements. The Port Authority pays almost $90,000 annually in tax payments for the 9.3-acre property, which the city estimates would generate $9.6 million in traditional taxes.

[MÇA]

Port Authority and Jersey City in talks over $400M lawsuit threat
By Terrence T. McDonald/The Jersey Journal
on February 14, 2014 at 3:30 PM, updated February 14, 2014 at 5:14 PM

Will the public be denied a chance to see Jersey City vs. the Port Authority hit a courtroom?

Mayor State Fulop last year announced he planned to file a $400 million lawsuit against the bi-state agency, accusing it of stiffing the city on tax payments for the 32 properties the Port Authority owns here.

At the time of his announcement, Fulop told The Jersey Journal he threatened to sue because all his attempts to meet with the Port Authority over the issue were ignored.

But, three months later, and there's still no suit. And that's because both the city and the Port Authority say they have been communicating about the impasse and talks, they say, are going well.

City spokeswoman Jennifer Morrill said Weiner Lesniak, the law firm hired to represent the city for $150 an hour (not to exceed $50,000), sent a “formal demand letter” to the Port Authority and the agency responded.

“We’ve had an initial meeting with the Port Authority’s new leadership, which was moderately productive,” Morrill said.

That “new leadership” is Deb Gramiccioni, who was appointed by Gov. Chris Christie to replace Bill Baroni as the Port Authority’s deputy executive director. Baroni resigned in December amid fallout from the George Washington Bridge lane closures fiasco.

Gramiccioni, asked to comment, also sounded a positive note.

“The Port Authority is committed to working with its host communities on all matters that impact their residents and our discussion with Jersey City Mayor Fulop was a productive beginning to what I am sure will be a continuing dialogue with him and his administration,” she said in an email from a Port Authority spokesman.

Morrill said the "formal demand letter" cannot be released.

Jersey City's lawsuit threat could end up going the same route as Newark's lawsuit against the Port Authority in 1998. Newark sought underpaid rent, and the two entities settled out of court, with the Port Authority agreeing to give Newark over $100 million in tax relief, plus $12.5 annually for capital improvement projects and $3 million in additional rent payments.

[CeeDub]

"Last year, it cleared $1.5 billion in net operating revenue and it plans to raise tolls again later this month"

Sounds like a cash cow.  As a public serving enterprise the salaries should be on par with GS-scales.  AND unless they are footing the bill for a seriously underperforming agency elsewhere, any net-plus revenue should be applied to tolls.

[MÇA]

KIYC: Jersey City threatens to sue Port Authority for lost revenue
Originally published: November 18, 2013 6:40 PM
Updated: November 18, 2013 8:26 PM

JERSEY CITY - A Kane In Your Corner investigation finds Jersey City officials may have a point when they complain that sweetheart deals made by the Port Authority of New York and New Jersey cost them hundreds of millions of dollars.

From Path Plaza to the Global Marine Terminal at Port Jersey, the Port Authority owns 32 parcels of Jersey City real estate. But the authority’s annual Payments in Lieu of Taxes, or PILOTs, have been unchanged in nearly 50 years thanks to an agreement dating back to 1967.

Nowhere is the impact of those deals more clear than at One Path Plaza, a 9.3-acre property in the heart of Journal Square. The property tax assessment today would be approximately $10 million, but the Port Authority still pays the 1967 rate of just $86,000. Over the decades, Jersey City officials say that single property has cost them $219 million in uncollected revenue.

In Port Jersey, the Port Authority’s annual PILOT payment is $1.3 million, as opposed to the current assessment of $1.6 million. The city says that property has cost them $9 million in uncollected revenue over the years. In some of its Jersey City properties, the Port Authority makes no annual payments at all.

“For the Port Authority to take the position that a payment in 1967 is acceptable in the year 2013 – that same dollar amount – is just, you know, I think anybody would say it’s really outlandish,” says Jersey City Mayor Steven Fulop.

The Port Authority certainly appears to have the money to pay a more current tax valuation. Last year, it cleared $1.5 billion in net operating revenue and it plans to raise tolls again later this month. The Port Authority also pays some of the highest salaries of any public sector employer. Five employees currently make more than a quarter of a million dollars a year, including Executive Director Patrick Foye and Deputy Director Bill Baroni, who each draw salaries of $289,667.

The Port Authority declined requests for an interview, but Chairman David Samson did make a brief statement to NJ Business Magazine. “We usually do not comment on threatened or pending litigation, but I can tell you the Port Authority is in compliance with its legal and contractual obligations,” Samson said.

[Bobblehead]

Another take on that.

Political Insider: Jersey City has the Port Authority in its cross hairs
By Agustin C. Torres/The Jersey Journal
November 19, 2013 at 1:31 PM, updated November 19, 2013 at 1:34 PM

Can you hear me now!

Wow, Jersey City decided to do a wee bit of truck inspection early this morning at Port Jersey where there was over a mile long back up of trucks heading to such operations as Global Terminal, a containerization shipping company.

Jennifer Morril , a spokeswoman for Mayor Steve Fulop's administration, denies that the inspections has anything to do with the city's intention to sue the Port Authority of New York and New Jersey over claims that the bi-state agency is making low in leu of taxes payments on properties it owns in the municipality. Wink, wink.

Actually, the city made a short inspections test run yesterday morning just outside the port facility, according to city sources. Police also were making inspections at several other areas in the city, so no one can say Port Jersey was targeted, although it certainly requires some well-planned preparations to put the facility in the cross hairs.

Holy Frank "I am the Law" Hague, the inspection was definitely sparked by the Port Authority's refusal to speak to city officials or even acknowledge their existence. It may have been fatal calculation because there is great deal more that the Fulop administration can do to attract attention.

Inspections could resume at any time and the city is capable of causing some major shipping delays in New York Harbor and the loss of millions of dollars, according to my city sources.

Believe me, a better deal with the Port Authority is a major goal for Fulop and it's obvious he's taking it quite seriously. "It's good for the city," he says when asked if there may be political repercussions in pulling the Port Authority's tail. Actually, it is the Port Authority, a major patronage mill, that should be cognizant of possible political fallout, according to city sources.

The next move is the Port Authority's, unless they believe it was just random inspections.

[MÇA]

Police checkpoints at Jersey City terminal lead to truck traffic backups
By Terrence T. McDonald/The Jersey Journal
on November 19, 2013 at 11:26 AM, updated November 19, 2013 at 11:47 AM

Police checkpoints at Port Jersey in Jersey City this morning led to hours of gridlock at the marine terminal, which is owned by the Port Authority of New York and New Jersey.

The checkpoints, initiated by Jersey City police, started yesterday morning, but kicked into high gear today at about 8:30 a.m. Traffic was at a standstill on both Port Authority Boulevard and on Pulaski Street as a result. Both roadways lead out of Port Jersey toward Route 440.

City officials say police issued 52 tickets this morning to truck drivers.

City spokeswoman Jennifer Morrill said this week’s checkpoints aren’t related to Fulop’s threat to sue the Port Authority for $400 million over unpaid taxes. But the action will certainly aggravate tensions between the city and the bi-state agency.

A Port Authority spokesman did not immediately return a request for comment. Officials at Global Terminal and Container Services, which leases much of Port Jersey, were reportedly furious about the delays, but they did not return requests for comment.

Two men who run food trucks near Port Jersey Boulevard and Pulaski Street said tractor trailers were stopped dead coming out of the terminal this morning as police inspected their vehicles. One said when truck drivers tried to cut down Pulaski Street to get to Route 440, city cops stationed cars there to stop them.

“It was all backed up,” said one of the men, who asked that The Jersey Journal not print his name because he didn’t want to get involved in a spat between Jersey City and the Port Authority.

The operation didn't appear to affect any traffic on Route 440.

In a presentation last week to the City Council, Fulop said most port-related trucks travel along Route 440 from Port Jersey Boulevard to avoid tolls on the New Jersey Turnpike. More than 1,220 trucks pass through per hour during peak times, causing congestion, pollution and road damage, according to Fulop.

Today, the mayor said the city is putting an emphasis on “truck safety.”

"These inspection have and will be ongoing in many areas of the city,” Fulop said in a statement. “There is no reason why truck traffic should not be complying with all applicable laws as the safety for residents on Jersey City roads is paramount."

Port Authority officials have mostly declined to comment on Fulop’s lawsuit threat, though last week, David Samson, its chairman, said the agency complies with all its legal and contractual obligations.

Fulop claims that the Port Authority doesn’t pay taxes on most of the 32 properties it owns in Jersey City, and on the properties that are taxes, the agreements bring in so little revenue to the city that it causes “undue economic harm.”

[MÇA]

Port Authority Chairman replies to Jersey City Mayor Fulop's accusations
By Terrence T. McDonald/The Jersey Journal
on November 18, 2013 at 3:00 AM, updated November 18, 2013 at 3:04 AM

In response to Jersey City Mayor Steve Fulop’s claims the Port Authority is behind on taxes to the city to the tune of roughly $350 million, the bi-state agency’s chairman, David Samson, told NJBiz Friday that the Port Authority complies with all legal and contractual obligations.

Port Authority officials have been mostly mum about Fulop’s claims, even as the mayor threatens to sue the agency for $400 million. But Samson implied to NJBiz that Fulop’s claims aren’t true.

“We usually do not comment on threatened or pending litigation, but I can tell you the Port Authority is in compliance with its legal and contractual obligations,” Samson said.

Fulop revealed last week that the city plans to file the lawsuit, saying of the 32 properties the agency owns in Jersey City, it doesn’t pay taxes on more than two dozen, contrary to a state law that requires the agency to sign payment-in-lieu-of-taxes agreements with the municipalities in which it operates.

The mayor took a shot at Samson’s comments on Twitter.

“Well, they finally woke up + r wrong,” the mayor posted.

[Darna]

I understand that the city wants the PA to pay taxes for the property the PA owns but for which it has failed to enter PILOTs.  That seems pretty clear.  The law mandates tax agreements; they failed to enter tax agreements.  They owe JC money. But I still don't understand how JC plans to sue based on "outdated and unfair" tax agreements and expect a recovery on those grounds.    Can someone explain to me please?

[jehu]

Yeah. I am not arguing that they aren't dysfunctional. The issues at times are purely economic fluctuations and NJ/NY appointing political choices to fill the executive board at the PA.

[Bobblehead]

It is no secret that the Port Authority is dysfunctional.

[jehu]

Part of the issue with increased fares is port costs and the willingness of shipping companies to use southern ports if our costs get too high.

PA is basically forced to cover increased costs for ALL of its operations through public transportation costs.

I think once the new dredging and bridge raising is done and the PA can accept the larger ships they will start raising fees on that end of their business model ( if you can call it that).

Jersey City Mayor Steve Fulop: Time to stand up to the Port Authority: Opinion
By Steven Fulop
November 14, 2013 at 6:59 AM, updated November 14, 2013 at 7:12 AM

Ask any New Jerseyan or New Yorker what their least favorite government entity is and the answer will most likely be the Port Authority. This is a reputation earned from decades of callous disregard for most any individual or company who questions its direction.

Tolls going up too much? Tough. We need more money and we aren’t really going to tell you why. PATH fares getting too expensive? Deal with it.

But to the friends on the inside, generosity rules the roost. For example, the licensing rights to the World Trade Center name, worth millions of dollars, were sold to a former employee for $10. . . .

[MÇA]

must be loving the fact that the PA can't or won't say anything to refute the city's assertions. He's already won the battle in the court of public opinion by hitting them early and often. Looking forward to see how the NYC papers cover this.

[Bobblehead]

Jersey City Mayor Steve Fulop: Time to stand up to the Port Authority: Opinion
By Steven Fulop
November 14, 2013 at 6:59 AM, updated November 14, 2013 at 7:12 AM

Ask any New Jerseyan or New Yorker what their least favorite government entity is and the answer will most likely be the Port Authority. This is a reputation earned from decades of callous disregard for most any individual or company who questions its direction.

Tolls going up too much? Tough. We need more money and we aren’t really going to tell you why. PATH fares getting too expensive? Deal with it.

But to the friends on the inside, generosity rules the roost. For example, the licensing rights to the World Trade Center name, worth millions of dollars, were sold to a former employee for $10. . . .

[Bobblehead]

Port Authority officials appear in Jersey City, still mum on Fulop lawsuit threat
By Terrence T. McDonald/The Jersey Journal
November 13, 2013 at 3:36 PM

Top officials at the Port Authority of New York and New Jersey declined to comment today on Jersey City Mayor Fulop’s plan to sue the bi-state agency for $400 million, roughly the figure Fulop says the agency owes in unpaid city taxes.

Bill Baroni, the Port Authority’s deputy executive director, said the agency would not comment on any issues that appear headed toward litigation. A Port Authority spokesman gave the same response to The Jersey Journal yesterday.

“The city of Jersey City and the Port Authorty has for some time continued to deal with these issues, under Schundler, under Healy and now under Fulop,” Baroni said today. “These are important issues and we’ll continue to be focused on them.”

. . .

[Bobblehead]

Inaccurate headline in the NYPost, but whatev. . . It goes into more detail about the reasoning behind the suit.

Jersey City mayor to sue Port Authority
By Associated PressNovember 13, 2013 | 3:12am

NEWARK — The mayor of New Jersey’s second-largest city plans to sue the Port Authority of New York and New Jersey for $400 million to compensate for what he claims the agency has underpaid in property taxes and other payments spanning several decades.

. . . “For years, in fact decades, the Port Authority has been derelict as a property owner in Jersey City,” Fulop wrote. “If this was any other property owner, legal action would have been taken much sooner. But because of the political influence of the Port Authority, Jersey City taxpayers have suffered. We intend to right this wrong.”

[Bobblehead]

Jersey City suit targeting Port Authority has vocal critic in central Jersey
By Terrence T. McDonald/The Jersey Journal
November 13, 2013 at 7:32 AM, updated November 13, 2013 at 8:39 AM

The governors of New Jersey and New York are mum about Jersey City Mayor Steve Fulop’s plan to sue the Port Authority for $400 million, as is the bi-state agency, but a Republican state senator from central Jersey is hopping mad about it.

“Jersey City wants everyone other than its own residents to pay the city’s bills,” state Sen. Michael Doherty, R-Washington, said in a statement from his office yesterday. “Mayor Fulop claims long-standing tax agreements with the Port Authority have caused a ‘severe negative impact on Jersey City taxpayers,’ yet he makes no mention of the $2 billion of questionable tax exemptions that the city has doled out which shifts the burden of maintaining city services to other Hudson County and state taxpayers.”

. . . .

In a statement, Fulop said Doherty “has a track record of defending this bloated government agency.”

======================================================

And here is a good comment on this article:

JoeUnionCounty 1 hour ago

Jersey City produces more in tax revenues to the state than Senator Doherty's entire district. The tax paid by his residents are almost zero earned in his district. They make their money in places like Jersey City and spend it where they live. The people of Warren County get farm tax abatements. Like a past Republican Governor all they need is to grow trees to get massive real estate abatements. No one who lives in Warren County gets paid in Warren County except Republican politicians. The tax abatements in many cases are required by the state. It is the state of New Jersey that REQUIRED tax abatements to provide guarantees on the housing construction financing at Newport. When many of the businesses that moved over from New York again it was the State of New Jersey that required Jersey City to give tax abatements. Senator Doherty if he had any intelligence would have looked into this before he spoke. He is probably a lawyer.

[MÇA]

A note from and the official press release:

"I am sharing with you some information regarding a lawsuit that the city will be initiating against the Port Authority for $400,000,000 in payments pending the City Council approval tomorrow. The Port Authority has long felt that it can bulldoze host communities and ignore requests. You can read a detailed PowerPoint presentation with information on the relationship also at www.cityofjerseycity.com"
 
--

Jersey City to Sue Port Authority for $400 Million for  Missed Tax Payments
& Undue Economic Harm; Agency Has been Completely Unresponsive to City Requests

JERSEY CITY – Mayor Steven M. Fulop announced today that the city will file suit against the Port Authority of New York and New Jersey for $400 million for missed tax payments and undue economic harm caused to the taxpayers of Jersey City by the bi-state transportation agency.

“This legal action is the result of economic damages caused by the Port Authority’s unfair and outdated tax agreements with the City that has resulted in the loss of hundreds of millions of tax dollars over several decades,” said Mayor Fulop. “The Port Authority has repeatedly failed to fulfill their legal obligations which has caused a severe negative impact on the Jersey City taxpayers."

"Since taking office, I have reached out to officials at the Port Authority both formally and informally numerous times which has been documented, yet they have failed to respond," continued Mayor Fulop.  "As they have been completely unresponsive, we have no other option but to act on the behalf of our residents.”

A bi-state port district authority, the Port Authority does not pay traditional property taxes, but instead enters into PILOT agreements (payments in lieu of taxes) with the City of Jersey City. These PILOT agreements – many of which date back several decades – state that the payments equal the last tax amount paid into perpetuity.

For example, for Journal Square PATH Plaza, purchased by the Port Authority in 1967, the agency only pays $87,000 in annual PILOT payments, whereas the current assessed tax rate $9.5 million.

“For years, in fact decades, the Port Authority has been derelict as a property owner in Jersey City,” said Mayor Fulop.  “If this was any other property owner, legal action would have been taken much sooner. But because of the political influence of the Port Authority, Jersey City taxpayers have suffered.  We intend to right this wrong.”

“This is the same agency that while continuing to short change the people of Jersey City in property taxes, has repeatedly hiked PATH fares and tolls for our residents and all those in the New York metropolitan area,” added Mayor Fulop.

Currently, for all Jersey City properties owned by the Port Authority – excluding the Holland Tunnel which is tax exempt – the agency pays the City $2.2 million annually.  Those same properties are assessed at a rate that would result in $18.2 million in property taxes annually to the City.

Some Port Authority properties do not have any PILOT agreements in place – which is a requirement.  As such, the attorney will also review the City’s right to impose and enforce additional PILOT agreements that have not been enacted.  A case in point is the office building at 2 Montgomery Street, which was purchased by the Port Authority in 2010 and for which the agency currently pays no taxes to the City.  Taxes are estimated at $1 million for the property, which is located in the city’s waterfront financial district.

The administration will introduce to the City Council at their next meeting a resolution authorizing the hiring of Weiner Lesniak LLP to begin legal proceedings against the Port Authority.

Previously, Weiner Lesniak, along with a forensic accounting firm, was able to obtain settlements on behalf of the City of Newark totaling in excess of one billion dollars in damages, as well as new revenues for the city, which included damages due to past underpayments of rent and fees plus additional new revenues for the remaining term of the leases and agreements.  The law firm’s efforts in Newark also resulted in the Port Authority’s agreement to change the methodology by which it calculates its payments to City of Newark pursuant to its various agreements with the City.

[Bobblehead]

This New York Times op-ed by James Doig last year points out some of the problems with the Port Authority.

[stephen]

Wow. Recovering some cash would be great, but I hope it at least changes the power dynamic around here.

[Kindelan]

Go get 'em Steve!

[Bobblehead]

Jersey City to file $400M lawsuit against Port Authority, citing 'unfair' tax agreements
By Terrence T. McDonald/The Jersey Journal
November 11, 2013 at 5:23 PM, updated November 11, 2013 at 7:48 PM

Jersey City plans to file a $400 million lawsuit against the Port Authority of New York and New Jersey, saying “outdated and unfair” tax agreements between the city and the bi-state agency have led the city to lose out on hundreds of millions of dollars in tax revenue.

• Tweet