Tax Break Denied to Developer in Jersey City

After purchasing the site known as 77 Hudson in 2006 for $65 million, developer K. Hovnanian recently had its lawsuit seeking a better tax abatement dismissed with prejudice by a Superior Court judge.  The project first gained notoriety when one of the project’s units sold for $6 million several years ago.

K. Hovnanian sought a new tax abatement agreement in 2009 after a better abatement was granted to Hovnanian’s competitor, Crystal Point.  Crystal Point’s abatement went from 16% over 20 years, to a graduated percentage over 30 years.  Hovnanian sought a similar deal which would result in a more than $1 million savings annually, but Jersey City’s Council voted to deny the new deal.

Hovnanian’s complaint alleged the Council’s denial was arbitrary and capricious; violated the implied covenant of good faith and fair dealing; violated its due process and equal protection rights under the U.S. Constitution; and violated the uniformity clause of the New Jersey State Constitution.

For more on the story, see the following news links:

The Jersey Journal (August 6, 2010)

The Jersey Journal (April 4, 2010)

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.