The Jersey City Council is expected to vote on a $682,000 settlement for a tax credit dispute with Plaza X Urban Renewal Associates LLC, also known as Harborside Plaza 10, at Wednesday’s meeting.
By John Heinis/Hudson County View
“This matter arises out of a dispute involving a formerly tax abated entity (Plaza X) relating to credits for land tax payments made by the entity for Q4 2021, Q1 2022 and Q2 2022 that were never credited to the entity,” the resolution before the council says.
” … The Acting Corporation Counsel recommends a settlement to compensate the Plaintiff the total sum of six hundred eighty two thousand dollars ($682,000) because the risks and costs involved with conducting a trial includes the possibly of a verdict that exceeds the amount of the settlement.”
The four-count lawsuit, filed in Hudson County Superior County in May 2023, alleges that the 17-story building at 3 Second St., that received a 20-year tax abatement from the city in October 2000, with a clerical error corrected in January 2001.
“Under the Agreement, when the Project attained Substantial Completion, Plaintiff for the next twenty years, was required to pay an ‘Annual Service Charge,’ in lieu of conventional taxes on improvements to the Property,” the lawsuit says.
“Also under the Agreement, Plaintiff was required to make quarterly “Land Tax Payments” in the amounts determined by the Tax Assessor and Tax Collector.”
The lawsuit further states that 15 years in the 20-year agreement: Rather than issuing a credit from the previous four quarters against the third quarter Annual Service Charge, they began issuing credits on a quarter-by-quarter basis.
Ultimately, Plaza X estimated that the city owed them over $800,000 in either land tax charge credits or a reimbursement, which they communicated to the city in a letter dated August, 2nd, 2022.
“The City initially responded and claimed there were certain, unidentified ‘discrepancies’ with Plaza X’s calculations. Eventually, however, the City referred the matter to its Law Department and stopped communicating with Plaza X altogether. On November 30, 2022, Plaza X again wrote to the City requesting a meeting to resolve the issues. The City did not respond to that letter, forcing Plaza X to initiate this lawsuit,” the court filing asserts.
“In addition, in 2021, Plaza X successfully appealed the tax-assessed value of the Property, resulting in a reduction in the amount of property taxes it owed. However, even after its appeal, Plaza X inadvertently paid annual service charges based on the pre-appeal assessed value of the Property and therefore overpaid on its annual service charges.”
City spokeswoman Kimberly Wallace-Scalcione said the change in methodology caused the lawsuit to be filed and the city.
Additionally, they are looking to resolve this now since “because a settlement has been negotiated on this formerly tax abated property for a credit going forward.”
The Jersey City Council convenes for their caucus this afternoon at 4 p.m., and then their regular meeting on Wednesday at 6 p.m. Both will stream live on Microsoft Teams.
