Changing Skyline: It's what makes Subaru a tax dodge

sub-600
Rendering of Subaru’s new headquarters in Camden. ( SOURCE: Granum Architects/Interiors and Brandywine Realty Trust )

Over the years, New Jersey officials have come up with one scheme after another to revive Camden, the state's poorest city. First, there was the entertainment zone along the Delaware waterfront. Now, there is the Gateway District off Admiral Wilson Boulevard, near Campbell Soup. All have involved oodles of tax breaks, acres of surface parking, and relatively few jobs for the long-suffering residents of Camden.

Subaru of America is the latest beneficiary of the state's generosity, and it appears to be following the same script in the name of bolstering Camden's anorexic economy. The company, now based in Cherry Hill, received city planning approval Tuesday for a new North American headquarters and training center in the Gateway District, on a four-acre site once occupied by Sears' stately, columned department store.

To hear state and city officials tell it, Subaru's decision to take up residence in Camden is the first step in establishing a vibrant new urban district on the edge of downtown. But what it really does is import sprawl into a city hungry for density. And New Jersey taxpayers will be the ones to pick up the tab for this wasteful, antiurban land deal.

When suburban companies make the move into cities, they typically bulk up in height to fit in with their urban compatriots. Not so here. Subaru will leave a relatively tall building (seven stories) in the suburbs for a shorter one (four stories) in the city. Subaru's new home, sized for 600 employees, will be a lonely island in an asphalt sea containing 1,031 parking spaces.

Should any employees be adventurous enough to commute by PATCO, the River Line, or NJ Transit bus to the Walter Rand Transportation Center in downtown Camden, they will face almost a mile's walk along the mini-highway of Martin Luther King Boulevard. Only 65 percent of Camden adults have access to cars, so the lack of transit hits them hard. Bike paths and new transit stations have been promised, but in some vague, far-off future.

The entire 13-acre Gateway District, which includes the Subaru project, is being developed by Brandywine Realty Trust, the company responsible for the cluster of glass towers at Philadelphia's 30th Street Station. It's pitching Gateway as Camden's answer to the Navy Yard. If so, it's a poor-man's version, with no meaningful street grid, no inclusion of interesting older buildings, no aspiration for true urbanity.

As a company, Subaru has gotten a lot of mileage out its reputation for environmental responsibility. Yet here, it seems oblivious to those concerns. The New Jersey Conservation Foundation has been begging the company to include the same rain gardens Subaru has in Cherry Hill to help control flooding on Admiral Wilson. A request for a bike-trail connection to Gateway Park has also gotten little traction.

The project would be bad enough if Subaru were decamping to Camden on its own dime, but this deal was made possible by the Christie administration. Thanks to the state Economic Development Authority, Subaru will receive $118 million in tax credits over the next decade to move 3.9 miles down the road from its existing building.

The project happens to cost $118 million, meaning Subaru gets a brand-new headquarters practically free. On top of that, Camden has to forgo property taxes for at least a decade - possibly two. Consider Subaru as Christie's headquarters to nowhere.

Christie certainly didn't invent this kind of economic policy. Corporate poaching has become politicians' favorite tool for claiming they are tackling job creation. Usually, it turns out to be a money-losing shell game, says Greg LeRoy, who heads Good Jobs First, a Washington group that tracks economic development policy.

Few states practice jobs poaching with the abandon of New Jersey, he says.

Just recently, the Garden State poached two biggies from Philadelphia: The 76ers practice facility was lured to Camden with $82 million in tax credits, and Destination Maternity agreed to shift its offices from its Spring Garden Street plant to Moorestown for $40 million. In a crazy bit of reverse commuting, Lockheed Martin will move from Moorestown to Camden for $107 million in credits.

No doubt, Philadelphia would try the same tricks on New Jersey if it could. Subaru was said to be considering the Navy Yard, and its lucrative tax breaks, before New Jersey stepped in with a sweeter offer.

Tax breaks aren't necessarily a bad thing. A Robin Hood economic policy that moves companies into distressed places like Camden can spur revival. But only if it's hitched to an urban development policy.

If the Christie administration really understood what made cities tick, it would have made Subaru's tax breaks contingent on moving to a downtown site, where employees could venture outside for lunch and errands, encouraging small businesses. Who knows? Some might have even been persuaded to take up residence in the city's reviving neighborhoods so they could walk to work.

There is certainly no shortage of downtown sites. Camden just used eminent domain to tear down an eight-story downtown office building next to its transit center. Unfortunately, its replacement is a parking garage. Putting Subaru above the garage would have been so much more powerful. At Gateway, they'll drive in and drive out.

Even if Subaru insisted on a suburban-style building, the state could have at least required the company to give qualified city residents first dibs on job openings. As part of the deal with the state, Subaru must add 100 employees over 10 years. The problem is, they can be from anywhere.

At $1.18 million for each job created, "it's not the highest price ever paid, but it's up there," says LeRoy. "The state will never break even at that price."

Camden is far from a lost cause. Rutgers University has done wonders with Cooper Street, and urban pioneers are putting down roots. Almost a dozen showed up at Tuesday's hearing to protest the Subaru plan. An architect, Eduardo Guzman, told me he just bought an old firehouse and planned to move his firm, DCM, to downtown Camden. "No one is offering me tax breaks," he noted.

For $118 million, Camden deserves more than an inaccessible, climate-killing suburban office park. It's what makes a Subaru a real disappointment.



ingasaffron@gmail.com

215-854-2213@ingasaffron

www.philly.com/saffron

This story was corrected: The name of the company moving from Moorestown to Camden is Lockheed Martin. Holtec is moving to Camden from Marlton.