The List: Firms Benefit from $1.3 Billion in Incentives to Set Up in Camden
Of the $4 billion earmarked for a controversial business tax-incentive scheme to bring companies to New Jersey or keep them here, a big chunk has gone to firms relocating to Camden
Last month, elected officials in Camden celebrated the grand opening of the Philadelphia 76ers practice facility, located next to the BB&T Pavilion concert venue on the Delaware riverfront. Other than bringing a professional basketball team to the beleaguered city, the opening marked Camden’s first large-scale construction project to be completed under the state’s controversial Economic Opportunity Act of 2013, which provides tax credits to new or relocating businesses that meet certain criteria.
Three years into the dramatically overhauled incentive program, nearly two dozen private firms have received $1.3 billion worth of credits to build in Camden. That’s out of a total $4 billion approved statewide so far.
The generous packages for the city are by design. With the law pushed by its former state senator Donald Norcross, Camden received many bonus incentives to lure investment that might not otherwise come. Recipients have to earn their awards by fulfilling their capital investment and employment promises. But while construction crews may be welcomed as an encouraging sight in what’s often labeled America’s poorest and most crime-ridden city, critics caution that the investment is politically driven, won’t help residents, and will likely saddle state taxpayers with costly bills.
Among the many complaints is that all but one of the companies taking advantage of the Camden incentives (the Sixers) is moving from within Camden County or from neighboring Burlington County. Though most promise to create new jobs in addition to those they’re relocating, none are obligated to hire Camden residents and many of the positions require technical or professional skills the local population lacks.
Opponents like New Jersey Policy Perspective and Americans for Prosperity warn that the per-job cost to the state is exorbitant and may not be recouped if the companies only stay for their required 15 years out of a 30-year benefit calculation.
Ideally, these companies will infuse the city with new employees who will leave the office to buy lunch from local taquerias and baguettes and wine to take home from shops that will pop up to serve them. But several of the projects are insulated — either nestled within their own corporate campus or surrounded by 1,000 parking spots and wedged against the highway back to the suburbs. Some local activists have expressed concern about a proposed shuttle to carry waterfront workers five blocks between the new buildings and downtown.
Finally, at least four of the companies have direct ties to George Norcross, considered South Jersey’s primary Democratic powerbroker and Donald’s older brother. George Norcross is also the chairman of Camden’s Cooper University Health Care, and an ally of Governor Chris Christie. Norcross spokesperson Daniel Fee emailed, "George has dedicated an extraordinary amount of his time and resources to helping rebuild Camden and his work with community leaders and elected officials is beginning to show results … Private investment is coming back, and bringing thousands of jobs with it."
Here’s an update on where some of these projects stand, listed in order of their per-job cost. Status updates were provided by city spokesperson Vincent Basara.
1. EMR Eastern, $728,386
Approved in September of last year, this project’s $728,386 cost per job made it the most expensive per-employee incentive in state history. Thanks to a $253 million incentive package, the German metal-recycling company is moving its American headquarters from Bellmawr (Camden County) to half a dozen new buildings near Camden’s port district seven miles away. The company has already purchased a shredder — its primary piece of equipment — and has completed some renovations to the site. It’s about to start the major construction and renovation phase. Executives have told the Economic Development Authority (EDA), the agency that manages the incentives programs, that the campus will allow them to add 285 new jobs to the 201 the company has at an existing Camden scrapyard and preserve 62 jobs they’d considered moving to New Orleans. Though the port district is zoned for heavy industry, residents in the adjoining Waterfront South neighborhood complain about pollution-related health problems and beg city leaders to stop adding these types of companies to those that are already there.
2. Holtec International, $658,227
As the first project to be announced, in July 2014, much has been made of the energy design and manufacturing firm’s decision to use its $260 million award — the third largest in state history, after the stalled American Dream Meadowlands mall and Atlantic City’s closed Revel Casino Hotel — to build a technology campus on 50 acres in the Camden Port District. The walls have been enclosed and crews are fitting out the interior. PSE&G is finishing a power station that will house a generator for the Florida-based corporation, and parts of Broadway that have to be moved are back open. It marks the single-largest private investment in the city’s history. George Norcross holds a position on its governing board. The campus will create at least 235 permanent new jobs and bring over 160 from an existing site in Marlton (Burlington County). However, the 1,000 new jobs that Holtec’s CEO hopes to create may be overly optimistic; on Thursday, Newsworks.org reported that the company has no orders for the small nuclear reactors it’s going to build and questioned whether any customers will be willing to bet on this untested nuclear technology. There is a silver lining: Holtec has already made good on a pledge to help ready Camden workers for its jobs by supporting training programs at local schools.
3. Resintech, Inc., $523,840
Though the EDA announced this award just one month ago, crews have moved quickly to reroute a water and sewer line and some railroad tracks around the Federal Street site of the chemical manufacturing plant that serves the water and wastewater industry. CEO Jeffrey Gottlieb promises to build to LEED-gold environmental specifications, add 92 new jobs, bring 173 over from West Berlin (Camden County) and consolidate several hundred more from Pennsylvania, Maryland and California. Resintech has donated money to Rowan University for at least two out of the past three years; this is notable because Rowan runs Cooper’s medical school, and Norcross and Christie unsuccessfully sought to sever Rutgers’ Camden campus from the rest of the university and merge it with Rowan. Since being sworn into Congress in late 2014, Donald Norcross has steered more than $3 million in federal grants to Rowan. No one at Resintech could be reached on Sunday and a spokesperson for Rowan didn’t know if Gottlieb had other connections to the university.
4. Lockheed Martin, $428,000
Facing defense department budget cuts, the Maryland-based security, aerospace and IT firm threatened to reduce the size of its New Jersey workforce if the EDA didn’t grant it the awards it requested. In November 2014, the EDA complied and extended incentives worth $107 million, two-thirds of the cost to build two laboratories in the waterfront’s L-3 office building and the Waterfront Technology Center. The company has since relocated 250 workers to Camden and has accepted a separate state incentive package to keep 1,000 employees at its Moorestown (Burlington County) facility and at least 4,300 total in New Jersey. The move brings desirable professional-class workers to the city; however, they’ll be using space that formerly housed equally desirable L-3 defense contractors. In the 2015-16 election cycle, Lockheed donated $10,000 to Donald Norcross’ re-election campaign.
5. ACTEGA North America, Inc., $400,000
Announced this past August, the $40 million award to this German company that develops and produces coatings, inks, and adhesives for the packaging and printing industries has received little notice. Though the total award is relatively low, the per-job cost is high, given the project creates just 21 new jobs and retains 79 from its current location in Delran (Burlington County.) What’s notable is that the company will use a site along Admiral Wilson Boulevard that was cleared for a ShopRite that has now officially pulled out of negotiations with the city.
6. Philadelphia 76ers, $328,162
With the new practice facility open and running, construction crews are putting finishing touches on office space they anticipate will be ready by January. Once it’s finished, the $82 million, 120,000 square foot center will bring 250 employees over from Philadelphia and is expected to create positive exposure for Camden and import players for children’s charity events. According to published reports, Philip Norcross, brother to George and Donald, represented the team in its efforts to sell its unused tax credits on the secondary market. Though the team’s award package didn’t exceed the amount of its investments, as others have, it’s still legally allowed to profit off the state tax credits it received but doesn’t need.
7. American Water, $235,901
Since receiving a $164 million award to move out of Voorhees (Camden County) and into Camden instead of Philadelphia, the largest publicly traded water utility in the country has decided to anchor its headquarters in the mixed-use development that Liberty Property Trust is planning to build along several riverfront blocks. Parts of the Liberty complex, which is said to have secured a hotel tenant, are in a pre-construction phase, meaning American Water itself hasn’t broken ground yet. Executives hope to finish construction by the end of 2018 but in the meantime, the utility that contracted Philip Norcross as a lobbyist has taken over most of Camden’s water and sewer systems and has been working to privatize Atlantic City’s water supply. If Christie and State Senate President Steve Sweeney (D-Gloucester), also a tight Norcross ally, succeed in their state takeover of the coastal city (something the Local Finance Board gave them permission to do last week) they’ll be able to seize the public asset, valued at $100 million, and sell it to American, whose representatives have expressed interest.
8. Subaru of America, $196,388
After the Economic Opportunity Act extended generous provisions to car manufacturers looking to expand and consolidate the centers of their North American empires to Camden, Cherry Hill (Camden County)-based Subaru selected a city parcel being developed by Campbell Soup Company as its next home. With the help of a $117 million credit, the company will move 500 of its white-collar workers to a new headquarters and promises to create 100 more jobs there over the next 10 years. The building’s frame is complete and the walls are going up. However, Subaru’s president was quoted threatening to halt future plans for adjacent training, engineering, and service facilities if Christie follows through on a surprise pledge to end a 40-year-old income tax reciprocity agreement with Pennsylvania. Many of Subaru’s employees live in the commonwealth, which compounds the problem that the corporation is building on an insulated border parcel filled with parking spots hard against a highway that connects Camden to Philadelphia and its eastern suburbs. They won’t have to venture into the city of Camden at all. Though there’s been some disagreement in the press between company and city officials as to whether they’re working together to bring Camden residents onto the payrolls, the auto manufacturer has built a mechanic-training facility in North Camden and its corporate website says Subaru has already donated $800,000 to “worthy causes” in Camden.
9. Cooper University Health Care, $107,500
With Cooper Health System anchoring the “meds” piece of downtown Camden’s prized “eds and meds” development strategy, it’s debatable if the non-profit chaired by Norcross would have moved any of its employees out of New Jersey. Yet that’s what Cooper administrators told the EDA in order to qualify for credits to consolidate 353 back-office positions within Camden County to the L-3 building, which they’ve since done. In a statement, Cooper said the award would allow it to “continue to play an important role in Camden's renaissance, which will benefit the entire South Jersey region." The message seems to have resonated. Thanks to a formula that allows companies to discount state taxes for each employee retained or hired, the health-care system received $40 million worth of credits for $9.1 million worth of construction.