Jersey City plans to file a $400 million lawsuit against the Port Authority of New York and New Jersey, saying “outdated and unfair” tax agreements between the city and the bi-state agency have led the city to lose out on hundreds of millions of dollars in tax revenue.

The city also alleges that the Port Authority has refused to enter into tax agreements on many of the 32 properties it owns in Jersey City, agreements that would lead to an extra $1.3 million in tax revenue for Jersey City every year.

Efforts to address the tax issue with Port Authority officials have been met with silence, according to Mayor Steve Fulop, who met with The Jersey Journal today to reveal the details of the suit.

“We’re not going to get bullied around by them,” Fulop said. “We’re going to do whatever we can to make them treat Jersey City fairly.”

The city plans to file the lawsuit as early as Thursday. The City Council on Wednesday is set to approve a no-bid contract to high-powered law firm Weiner Lesniak to represent the city in the suit, at a cost not to exceed $50,000.

This is surely just the opening salvo in what Fulop aide Brian Platt said will be a "very long, bloody" war with the powerful Port Authority.

A phone call seeking comment this afternoon from the Port Authority was not immediately returned.

The suit seeks $315 million that the city says is what it would have collected if the Port Authority had been paying traditional taxes on all its city properties, and an additional $85 million in penalties, interest and damages.

The Port Authority, which had net revenue of $4.1 billion in 2012, pays $2.1 million in taxes each year to Jersey City, where the agency owns and operates the Journal Square transportation hub, Greenville Yard and 30 other properties.

According to the city, the Port Authority, created in 1921 to ease commerce and transportation between the two states, had originally sought to pay no taxes on properties it acquired in New Jersey. Subsequent lobbying by municipalities led to payment-in-lieu-of-taxes (PILOT) agreements, with the Port Authority paying no more than the taxes that were paid by the prior owners of the properties.

This effort to prevent municipalities from losing out on tax revenue has instead created “undue economic harm,” according to Fulop.

“They’ve taken advantage of this in order to manipulate cities like Jersey City and other host cities,” he said.

Fulop’s administration points to the Journal Square PATH center as an example of how Port Authority benefits from not paying traditional taxes. The agency pays $86,729 annually thanks to its PILOT agreement on the lot, the same amount it paid when it acquired the 9.3-acre property back in 1967, city officials say.

Jersey City estimates that a private taxpayer would pay $9.6 million in taxes annually on the property today, and that the city has lost out on nearly $219 million in taxes in the 46 years the Port Authority has own the parcel.

“It’s ridiculous,” Fulop said.

City officials also contend that the Port Authority, which is required by state statute to enter into PILOT agreements with municipalities when they acquire property, don’t always do so, leaving the city losing $1.3 million annually on 24 agency-owned lots.

One example is 2 Montgomery St., which the Port Authority bought in 2010 for $26.2 million and has not paid any taxes on, city officials say.

If the agency paid traditional taxes on these 24 properties, the city would realize an extra $18 million annually, they say.

Jersey City's proposed lawsuit is not unprecedented. In 1998, Newark sued the Port Authority seeking underpaid rent. The two entities settled in 2002 (thanks to deal brokered with help from then-Gov. James McGreevey, whom Fulop hired to run the city's jobs program), with the Port Authority agreeing to hand over $100 million in tax relief to Newark, plus $12.5 million annually for capital improvement projects and $3 million in additional rent payments.

Fulop told The Jersey Journal that he had scheduled a meeting with Port Authority Deputy Executive Director Bill Baroni to discuss the tax issue. Baroni canceled without cause, according to the mayor. Multiple emails on the subject to Port Authority officials were ignored, as was an Oct. 29 letter from Fulop to Patrick J. Foye, the Port Authority’s executive director, the mayor said.

Last month, Fulop told WNYC that communicating with Port Authority is "like talking to a dead person."