Judge: 77 Hudson Developer ‘Has No Right’ to Challenge Jersey City’s Abatement Decision
By Jon Whiten • Aug 6th, 2010 • Category: Blog, News, Politics
Developer K. Hovnanian’s attempt to force Jersey City to revise its tax abatement deal for the 77 Hudson condo building has been dismissed by a Superior Court judge, who found that “Hovnanian has no legal right” to the amended deal.
The developer had gone to the city seeking a sweetened abatement deal after one was given in June to the developer of Crystal Point, a high-rise building at the Hudson River and 2nd Street. Hovnanian came to the city in August looking for a similar deal; the company argued that by not doing so, Jersey City was giving Crystal Point an unfair advantage in the tight luxury condo market.
But the Healy administration, under fire for its handling of abatements and its governance in general following last July’s corruption sweep, held its ground against Hovnanian. It refused to change the terms of the deal, arguing that Crystal Point was “in an area that is clearly more remote” than 77 Hudson, which is near Exchange Place.
In October, the City Council unanimously voted against the developer’s application for an abatement change. Then in April, the city’s Tax Enhancement Committee did the same, and Hovnanian took the matter to court.
In the filing, Hovnanian argued that the city’s denial was “arbitrary, capricious and unreasonable,” that it violated good faith and fair dealing, and that it violated both the U.S. and New Jersey constitutions.
The city moved to dismiss the charges, and in the ruling handed down last week, Superior Court Judge Mark Baber dismissed the case with prejudice, meaning Hovnanian cannot file the suit again.
“The city was under no obligation to grant or modify the initial abatement request or Hovnanian’s request for an amendment and violated no rights, constitutional or statutory, enjoyed by Hovnanian when it did so,” he writes.
Baber finds that the law has little say when it comes to enforcing what abatement terms a city chooses.
“Like the original decision whether to grant an abatement, the decision whether to agree to an amendment is discretionary on the part of the municipality,” he writes. “Other than requiring the ‘mutual consent of the municipality and the urban renewal entity,’ the statute sets no standard under which a developer like Hovnanian would be would be entitled to an abatement or to an amendment of a previously approved abatement except by agreement.”
Hovnanian’s argument that it had been treated unfairly, Baber continues, “overlooks the fact that the entire abatement scheme … envisions a consensual relationship between the municipality and the developer.”
City attorney Bill Matsikoudis says he’s “gratified” that the court “recognized the City Council and mayor’s discretion in the awarding of tax abatements.”
Judge’s Decision in 77 Hudson Abatement Case
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Jon Whiten is the founding editor of the Jersey City Independent; he now works for a public-policy nonprofit in Trenton.
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