Mayor: Jersey City to Sue Port Authority for Taxes

NEW JERSEY 101.5

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.

In a statement released Tuesday that was accompanied by a 26-page presentation featuring colored graphs and pie charts, Mayor Steven Fulop accused the Port Authority of using outdated or nonexistent agreements to avoid paying millions of dollars per year on properties it owns in Jersey City. Fulop said he has attempted to speak or meet with Port Authority officials about his concerns but has been rebuffed.

"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."

The Port Authority operates three major New York-area airports, toll bridges and tunnels into New York City, the PATH rail system and the ports of New York and New Jersey as well as the World Trade Center site, and annually reports revenues in the billions of dollars. Four of its PATH rail stations are in Jersey City, along with the recently opened PATH command center. Part of the ports complex also lies within the city limits.

Two years ago, the Port Authority implemented a series of toll hikes on its bridges and tunnels through 2015 that many criticized as too steep.

The Port Authority owns 32 plots of land in Jersey City, according to Fulop's accounting, for which it pays the city a total of about $3.5 million per year in payments in lieu of taxes, or PILOTS. The property taxes on those plots would be about $18 million per year.

Twenty-four of those properties have no required PILOT agreements, however, according to Fulop, who said that makes the Port Authority liable for at least $1.3 million per year in PILOT payments or $4.8 million per year in property taxes.

Fulop claims the Port Authority has failed to execute PILOT agreements for the 24 properties and that the existing PILOT agreements "intrinsically cause economic harm to Jersey City over time and are seemingly biased towards PANYNJ."

As an example, he cited the PATH Plaza at Journal Square, bought by the Port Authority in 1967. The city receives $87,000 per year in PILOT payments on a property that would now be taxed at $9.6 million per year, Fulop said.

A Port Authority spokesman said Tuesday the agency does not comment on pending litigation.

(Copyright 2013 by The Associated Press.  All Rights Reserved.)