Jersey City’s four-year-old limits on Downtown chain stores are facing a legal challenge from the owner of an Erie Street building who claims the restrictions are a “blatantly illegal scheme” that have kept him from attracting a major retail tenant.

Developer Alfonso Carrino’s 8 Erie St. JC LLC filed the seven-count lawsuit in federal court on Friday, saying the chain store restrictions were nothing more than a “publicity stunt” to help Mayor Steve Fulop attract support from voters in parts of the state hostile to large corporations. The limits were first enacted in 2015, when Fulop was still eyeing a run for governor.

The restrictions apply in portions of the Downtown but do not affect large swaths of the Hudson River waterfront, including Newport. Carrino alleges in his lawsuit those areas were carved out because the city knew major developers like LeFrak and Mack-Cali would mount a legal challenge.

The lawsuit, which targets the city, the council, the planning board and the Jersey City Redevelopment Agency, represents the second major threat to the city’s chain store ban. In 2017 Fulop, who by then had halted his nascent gubernatorial campaign, asked the council to repeal the restrictions, saying they may not survive a legal challenge. The council voted to keep them in place.

The lawsuit says the chain store restrictions violate the commerce and equal protection clauses of the U.S. Constitution, state zoning laws, the doctrine of fundamental fairness and more. It wants the two ordinances that created the restrictions thrown out.

“There is no place for officials to use their control over the levers of government to prop up their own personal campaign prospects for higher office, at the expense of those who worked tirelessly to improve economic growth in the city,” the plaintiff’s attorney, Joseph Fiorenzo, said in a statement. “We are confident that the legal system will reject the egregious, politically motivated actions of the city, taken at the direction of the mayor, as detailed in the complaint, and that the ordinances will be found invalid.”

Asked to comment, city spokeswoman Kimberly Wallace-Scalcione said, “The goal of the ordinance was to protect the small Jersey City business owners that have invested in the city for decades against the big chain stores that now want to try and muscle out some of these small retailers. We will continue to fight for Jersey City small businesses.”

Carrino’s Erie Street property is located at the corner of Bay Street, a few blocks from the Grove Street PATH station and on the edge of the Newark Avenue pedestrian plaza. Formerly home to a telephone company switching station and then the Jersey City Police Department, it now includes apartments and a restaurant, Talde, which opened with considerable buzz in 2015 because of the involvement of “Top Chef” competitor Dale Talde. Numerous eateries have opened and then quickly closed in the building’s second retail space.

Carrino was tapped by the Jersey City Redevelopment Agency in 2012 to redevelop the property, which Carrino says turned into a nearly $9 million investment. There were extra costs because the site is located in a historic district, the lawsuits says.

At about the time the building was ready to be occupied, the lawsuit says, Fulop "hurriedly forced new legislation through the City Council:” the chain-store restrictions. The rules limit chains to a maximum of 30 percent of ground-floor commercial space in Downtown redevelopment zones, like the one that includes Carrino’s building.

The chain store rules changed the terms of Carrino’s deal with the JCRA solely for Fulop’s political benefit, the lawsuit alleges.

The curious case of Jersey City’s Krispy Kreme gets a mention in the complaint. The doughnut chain opened on Marin Boulevard in 2017 inside the zone where chain stores are restricted. The city argued that because the company identifies it as a “factory” location — meaning it makes doughnuts for smaller Krispy Kreme locations — it doesn’t count as a chain under the city’s rules.

“The defendants have selectively enforced the formula business restriction for their own benefit and to plaintiff’s detriment,” the lawsuit says.

Terrence T. McDonald may be reached at tmcdonald@jjournal.com. Follow him on Twitter @terrencemcd. Find The Jersey Journal on Facebook.