Jersey City has lost its appeal in the breach-of-contract case filed by the real-estate appraisal firm hired in 2011 to perform the citywide revaluation Mayor Steve Fulop halted when he was elected four years ago.

A three-judge appellate panel says in a decision issued this morning it would not overturn a lower court judge's April 2016 order that the city pay nearly $1 million to Realty Appraisal Co. The company said that was the amount it was owed when Fulop stopped its work on the reval and halted all payments to the firm.

One of the city's chief arguments that the Realty Appraisal contract should be thrown out was Brian O'Reilly's brief employment with the company after he retired from the city, where he was a business administrator and tax assessor. The city argued that O'Reilly helped steer the $3.2 million contract Realty Appraisal's way.

The appellate judges disagree in their 38-page ruling.

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A requests for comment from the city spokeswoman was not returned.

In a statement, Steve Rubenstein, who runs Realty Appraisal with his brother, said they are gratified by today's decision and repeated his claim that Fulop halted the reval to help his Downtown constituents who fear the reassessments will lead to steep tax hikes.

"The cost to Jersey City taxpayers for this four-year delay has been substantial: over $4 million for a different firm to start from scratch, as well as many hundreds of thousands of dollars in legal fees," Rubenstein said. "The four-year delay also cost the taxpayers in the most over-assessed neighborhoods of the city thousands of dollars in excess property taxes. Those taxpayers have borne an excessive share of the city's tax burden for many years."

Halting the 2011 reval was one of Fulop's first actions after being elected mayor in May 2013. A letter he sent the city's business administrator while still mayor-elect cited, among other things, "grave concerns" with the bid process that led to Realty Appraisal being hired. Schultz last year called Fulop's reasoning a pretext -- "the city simply does not want a revaluation, period," he said.

After Realty Appraisal sued for breach of contract, the city hired Bernardsville firm Shain, Schaffer & Rafanello -- the law firm of Peg Schaffer, the Somerset County Democratic chair -- to represent it in court. Schaffer was a supporter of Fulop's now-abandoned gubernatorial run. That legal tab has reached $500,000. The city will also be on the hook for Realty Appraisal's legal fees and daily interest on the initial judgment that stands at about $92,000.

Asked to comment, O'Reilly said the facts in this case are "irrefutable."

"I have testified under oath two times regarding questions that were presented to me, unlike others who have opinions regarding this matter who have not been sworn to tell the truth," he said. "Judges in this litigation have found the truth. I'm sure the public will do the same."

The city has since started a new reval that is expected to wrap up later this year. The process is intended to square each property's assessment with its market value.

New Jersey tax officials last year ordered Jersey City to conduct the reval, the city's first since 1988, saying local taxes are not distributed fairly if the assessed-to-market-value ratio is so low. The average property in Jersey City is assessed at just 23.66 percent of its market value.

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