Two months after Realty Appraisal was awarded a contract in 2011 to perform a citywide revaluation, city officials added a one-paragraph addendum that was not approved by the City Council. This change is “illegal,” according to city spokeswoman Jennifer Morrill, and could impact a breach-of-contract trial between the city and the appraisal company.
“The tax assessor under the previous mayor changed the contract to a cheaper, untested method of appraisal without ever going back to the council for approval, which is illegal,” Morrill told The Jersey Journal.
Realty Appraisal has filed suit against Jersey City, seeking the roughly $1 million remaining on the contract after Mayor Steve Fulop halted the revaluation in 2013.
The city’s attorneys tried to make the addendum an argument during the trial, but they were blocked by Hudson County Superior Court Judge Francis B. Schultz. Phil Elberg, the lawyer for Realty Appraisal, argued that the city’s attorneys never mentioned the addendum during the pre-trial process and so it could not be used as an argument now. Schultz agreed.
“The rules matter,” Elberg said before Schultz ruled in his favor. “You can’t show up at trial and come up with a whole new theory.”
The city is bracing for a loss when Schultz makes his final decision and expects to get a fairer hearing outside of Hudson County.
“If the judge finds against us, we will appeal as we feel (the addendum) is material information that would have hurt residents,” Morrill said. “The stakes are too high to put Jersey City residents through a revaluation that is murky at best.”
The City Council awarded Realty Appraisal a $3.2 million contract in February 2011 after it submitted the lowest by far of four bids to perform the city’s first revaluation since 1988. The city has argued that Realty Appraisal had an unfair advantage over other bidders because it had hired Brian O’Reilly, who was the city’s business administrator until he retired in 2010 and went to work for Realty Appraisal.
Two months after the revaluation contract was approved by the council, the city’s tax assessor, Ed Toloza, signed an addendum to the contract allowing Realty Appraisal to use a specific appraisal manual to appraise all properties. This change, which was not approved by the council, resulted in the company being allowed to alter, after the fact, the standards it used to perform the revaluation, the city’s attorneys argued.