Philadelphia developer Carl Dranoff is accusing city officials in Camden of endangering his deal to sell the Victor Building apartment tower to a Denver-based real estate company in a lawsuit that alleges breach of contract.
Victor Urban Renewal Group LLC, the Dranoff entity behind the former RCA Victor record factory’s conversion into luxury apartments, claims in the lawsuit that city officials are shunning their obligation to transfer tax breaks for the project to Apartment Investment & Management Co., or Aimco.
Aimco’s deal to buy 349-apartment Victor for $71 million must conclude before Sept. 4 and is conditional on the transfer of the tax break, according to the suit filed Wednesday in U.S. District Court in Camden.
The apartments are among six Philadelphia-area properties Aimco is buying from Dranoff Properties Inc. in a deal the companies said was worth $445 million when it was announced in June.
“The City of Camden has breached its contractual obligations and has deprived Victor Urban Renewal Group of its property without due process of law,” Dranoff’s attorneys wrote in the complaint.
The 2002 deal between Camden and Dranoff, part of the city’s urban revitalization efforts, exempted the Victor apartments from property taxes in exchange for an agreement to pay a much-reduced “service charge,” according to the lawsuit.
The deal stipulated that the tax break would be transferable if the property was sold to a buyer with “urban renewal” qualifications, such as the Aimco entity under agreement to buy the building, according to the suit.
Camden officials, however, have refused to place the transfer request on the City Council agenda for approval, the suit alleges.
Officials later summoned Aimco executives from Denver for a meeting on the request that was canceled two days before it was scheduled to take place and have since stopped returning calls and emails from Dranoff and his representatives, according to the suit.
The suit asks that the city be forced to transfer the agreement to Aimco, along with unspecified monetary damages.
Camden city spokesman Vincent Basara did not immediately respond to a message seeking a response to the allegations in the lawsuit.
A Dranoff spokeswoman said the developer was traveling and not available for comment. An Aimco spokeswoman did not immediately respond to an email seeking comment.