Three South Jersey companies seeking to move to Camden, including the insurance brokerage led by Democratic power player George E. Norcross III, on Thursday got approval from the state Economic Development Authority for tax incentives worth $245 million.
Conner Strong & Buckelew, based in Marlton, along with the Michaels Organization and NFI plans to build a $245 million, 18-story office tower on the waterfront as part of a development project already underway. According to the proposal, the completed building would be the tallest structure on the waterfront.
The proposal includes a piazza that would overlook the Delaware River with views of the Philadelphia skyline. It would move almost 900 existing jobs into Camden and could be ready for occupancy by August 2019.
The firms thanked the EDA in a joint statement Thursday.
"We are committed to Camden's future and expect to invest tens of millions of dollars to build The Camden tower on the city's waterfront, continuing the amazing growth and investment the city has seen in the last decade," the statement said. "It’s an exciting time in Camden's history and we look forward to being a key part of its future."
In September 2015, when developer Liberty Property Trust announced plans to transform the city's waterfront into a corridor of offices, shops, a hotel, housing, restaurants and walkways, Norcross indicated he would move his firm there. The Michaels Organization, a housing developer that has done work in Camden, and NFI, a supply firm, also said they would join.
The firms bought the Ferry Terminal Building on the waterfront last year, and may invest up to an additional $100 million in building apartments and a hotel planned there, according to the statement released last week.
The credits are contingent on the companies' making capital investments, and on the retention and creation of a certain number of jobs per company. They are paid annually over a decade after the companies complete construction.
The incentives can be recouped by the state for up to 15 years if the terms are not met. They are subject to depreciation, as well as state and federal taxes, and can be sold to other companies.
The incentives are awarded through the Grow New Jersey law, which was passed in 2013 after being championed by Norcross' brother U.S. Rep. Donald Norcross when he was a state senator. The program has led to an explosion of business development in Camden, and more than $1.5 billion in tax credits promised to companies that are now moving to the city. The law, which rewards companies that invest in struggling cities with tax credits, has attracted Subaru of America, Holtec, Lockheed Martin, and the 76ers, all of whom are building new facilities in Camden. Last month American Water Co. broke ground on a new headquarters planned for the waterfront.
State and city leaders say the developments will lead to more businesses and jobs and an improved local economy, as thousands more people will commute to Camden every day. Critics have said the deals are too generous because they largely involve the relocation of high-paying jobs from a few miles away in other parts of South Jersey, with no strategies aimed at addressing Camden's chronic unemployment. Many of the companies relocating also stand to pay far less in property taxes.
Many of the companies moving to Camden, including Michaels and NFI, have long-standing personal and professional ties to Norcross, who is also the chairman of Cooper University Hospital. In the past, Norcross has said he felt it was important to demonstrate his personal commitment to the city's revitalization.
Jon Whiten of New Jersey Policy Perspective, a liberal-leaning think tank that has for more than two years argued that the incentives will be costly to taxpayers, said the state is depending too heavily on the tax breaks to spur growth.
"New Jersey has put nearly all of its economic development eggs in a single basket: big tax breaks for less than 1 percent of the state's businesses," he said. "This is despite the fact that other baskets — like targeted job training and direct entrepreneurial assistance — are more affordable and provide a much better return on the state's investment."
Whiten cited research by Good Jobs First, a national policy resource center that examines subsidies and economic development, that found investing in job training programs costs less than large corporate subsidies.