Legal Challenge for Jersey City’s West Side Avenue Special Improvement District

West Side Avenue Jersey City
West Side Avenue, Jersey City. Photo via Google Maps/Street View.

A new courtroom battle is brewing over the City Council’s decision to create a controversial new tax on properties along a western corridor, as the owners of a Jersey City gas station are looking to void an ordinance that created the West Side Avenue Special Improvement District (SID).

In December last year, Jersey City’s council created the aforementioned district, the seventh of its type in the city. Its aim is to revitalize West Side Avenue and the surrounding area through a variety of programs that will be paid for by a new assessment on commercial properties, which would run $18 per square foot of retail storefront space.

On January 31, a local company called COB Gas Services filed a lawsuit against the city challenging the ordinance. The group owns a gas station at 2379 Kennedy Boulevard that would be subject to the new tax under the ordinance, as their property runs along a stretch of Communipaw Avenue included in the West Side Avenue SID.

In their complaint, COB Gas says they initially received a letter from the city on December 6 that advised them about their plans for the SID. The property owners then showed up to the December 19 council hearing on the matter, where they voiced their opposition to the ordinance.

About 30 other people spoke about the SID, according to the lawsuit, which claims that “a vast majority of those making public comments…strongly opposed the adoption of the ordinance and the creation of the West Side Avenue SID.” The ordinance nonetheless passed by an 8-0 vote and went into effect earlier this month.

The legal challenge to the ordinance says that the council “provided no substantive responses or explanations supporting the creation of the West Side Avenue SID or, more particularly, the extension of proposed West Side Avenue SID up and down Communipaw Avenue.” COB Gas additionally says they made two Open Public Records Act requests to the city in January that requested “all background reports, studies, correspondence, resolutions or recommendations” regarding their property’s inclusion in the zone, to which officials responded by telling them there were “no records to display.”

That reality, according to COB Gas, shows the city failed to comply with the SID Statute requirement, as the wording of the state law “contemplates some preliminary assessment and study into the possible creation of a SID, as opposed to the adoption of a SID ordinance with absolutely no analysis, studies, or community outreach.”

COB Gas says that per the ordinance, they have attempted to appeal their property’s inclusion in the SID to the city’s Tax Assessor. They claim in the complaint to have filed an appeal on December 19 but have not yet gotten a response. Per language in the ordinance, the Tax Assessor should have been required to hear the company’s appeal by January 18.

COB Gas seeks to have the ordinance, and by extension, the SID, declared null and void. The city has not yet responded to a request for comment on the matter.

The legal challenge is the second one launched recently against moves the council made at the end of last year; several businesses filed suit in December over Jersey City’s 1% employer-paid payroll tax, which went into effect at the beginning of 2019.

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