Jersey City Mayor Steve Fulop
Jersey City Mayor Steve Fulop halted the citywide reval in 2013 because he wanted to help Downtown property owners, alleges the co-owner of the company hired to perform the work. Reena Rose Sibayan | The Jersey Journal
(Jersey Journal file photo)
JERSEY CITY -- "Downtown property owners have the most to fear from a revaluation."
Those are the words of Neil Rubenstein, the man who co-owns the company hired to perform Jersey City's tax reval in 2011 before Mayor Steve Fulop halted all work in 2013 and refused to pay the company any more money.
Rubenstein's thoughts about how the reval would affect Downtown property owners are included in dozens of documents submitted to Hudson County Superior Court by attorneys for the reval firm, Realty Appraisal Co., and for lawyers representing Jersey City in Realty Appraisal's civil action against the city. The trial is expected to begin Monday.
The West New York firm has not made public comments about its two-year battle with Jersey City -- it alleges the city owes it $1.17 million for reval work performed before it was halted -- but the court filings reveal the arguments the two sides intend to make.
Rubenstein alleges in a sworn statement filed with the court on Aug. 18 that Fulop called off the reval soon after he was elected mayor in 2013 because of pressure from homeowners that formed his political base and not, as Fulop alleges, because Realty Appraisal hired a former top city official to help it win the reval contract.
Owners of Downtown brownstones, townhomes and condos "knew their properties were among the most under-assessed in the city," Rubenstein said. "They had the most to gain from halting the revaluation, and that was what their councilperson promised he would do if elected mayor."
City spokesman Ryan Jacobs noted that Realty Appraisal is accused in Monmouth County of receiving inside information from a government official before receiving a six-figure contract for an Ocean Township reval.
"This proves that shutting down this company's work in our city was right because they were not operating on the level," Jacobs told The Jersey Journal.
Were it not for Fulop's gubernatorial aspirations, the reval trial would likely interest only Jersey City taxpayers. But a quick resolution in court could mean Jersey City would have to move ahead finally with its first citywide reval since 1988, one that could prove unpopular with much of the city and threaten Fulop's political prospects.
Brian O'Reilly, formerly Jersey City's business administrator, is the focus of a legal fight between the city and Realty Appraisal, which performed the citywide reval until Mayor Steve Fulop canceled it in 2013. Reena Rose SIbayan | The Jersey Journal
'WE SHOULD BE SUING THEM'
Jersey City's defense in the reval case comes down to one man: Brian O'Reilly, formerly the city's business administrator and, for a brief time after he retired from that job, an employee of Realty Appraisal.
Here's the timeline: the city was ordered by county officials in April 2010 to perform a reval; at the time, O'Reilly was the B.A., and a former city tax assessor; in May 2010, the City Council authorized the contracting process to seek reval companies to perform the work; in September 2010, the city asked for proposals from reval firms; and in February 2011, the council awarded a $3.2 million contract to Realty Appraisal, with Fulop voting against.
The city argues that O'Reilly getting a job with Realty Appraisal around October 2010 -- as the firm was seeking to be hired by Jersey City -- tainted the process and gave Realty Appraisal an unfair advantage.
In a July 10 court filing, a lawyer for the city alleges O'Reilly, before retiring from the city, appointed all the members of a committee tasked with reviewing bidders for the reval work, a committee that ended up unanimously recommending Realty Appraisal's bid. After being hired by Realty Appraisal, O'Reilly helped the firm create a presentation it gave to that city committee about its bid before the council awarded the reval contract, city attorneys allege.
Those arguments echo what Fulop told The Jersey Journal in 2013 after he canceled the reval, saying Realty Appraisal, which provided the lowest by far of four bids to perform the work, benefited from "having "access to information that no one else had."
"If Realty Appraisal thinks that they're going to sue us for damages, I mean, the reality is we should be suing them for damages," the mayor told The Jersey Journal then. "They shouldn't be in a situation of proceeding with ... potential fraud or illegal information."
Rubenstein argues that the city's corporation counsel -- at the time Bill Matiskoudis -- provided a letter saying O'Reilly had no involvement in the reval process while he was B.A. and that then-Mayor Jerramiah Healy appointed members to the committee that judged the reval companies' bids.
A request for comment from Rubenstein for this story was not returned. O'Reilly could not be reached to comment.
DOWNTOWN VALUE ON THE RISE
Downtown Councilwoman Candice Osborne declined to comment on Rubenstein's allegation that Fulop canceled the reval because it would hurt Downtown property owners. Osborne, like Fulop, cited the ongoing litigation.
Attorney David Wolfe, who has represented Jersey City property owners in tax appeal cases, and is chair of the New Jersey State Bar Association's real property tax and practice committee, said he would "certainly expect" Downtown homeowners to "bear a greater percentage of the tax burden" after a reval.
Downtown homes have "appreciated more" in value since the city's last reval in 1988 -- and have benefited from expanded retail and transit options, like the light rail system -- so owners there could see a big tax hike, Wolfe said.
Fulop's office declined multiple requests to comment on a recent development in the reval fight: New Jersey's announcement last week that it may force a reval in Jersey City. That news was praised by state Sen. Mike Doherty, a Republican from Warren County who said he pushed Gov. Chris Christie to get the Jersey City reval started.
Doherty, a critic of the Democratic Fulop's abatement policy and of the disproportionate share of school funding the city gets from the state, said state lawmakers need "accurate real estate assessments" to make decisions about the amount of state funding Jersey City and its school district receives.
Doherty added that he's happy the state may step in because, he alleges, the city will keep its reval lawsuit going on as long as possible to stop the reval from happening while Fulop is mayor.
"Mayor Fulop never wants this lawsuit resolved," he said.
Terrence T. McDonald may be reached at tmcdonald@jjournal.com. Follow him on Twitter @terrencemcd. Find The Jersey Journal on Facebook.