Elected officials and developers donned white hard hats to break ground for a new hotel along the Camden waterfront, the first to be built in the city in 50 years.
Currently a parking lot next to what used to be Campbell’s Field, the site is slated to be transformed by the end of next year into a 180-room Hilton Garden Inn with panoramic views of the Philadelphia skyline.
According to Camden Mayor Frank Moran, corporate tax breaks from the state are making the construction of the hotel possible — just as they have spurred the development of gleaming new office buildings elsewhere in Camden.
“If it were not for the incentives that were provided to the city, what you see before us and what you’ll see soon when this is complete would not have taken place,” he said. “So for those that doubted the city and continue to doubt the city, you can’t argue this.”
Those tax breaks, awarded under a 2013 law known as the Economic Opportunity Act, have become a flashpoint between Camden boosters and Gov. Phil Murphy.
The tax break programs were designed to prevent corporations from leaving New Jersey and spur investment in cities such as Camden, which has received $1.6 billion in awards since 2013.
But a task force appointed by Murphy has dug up evidence of potential corruption and self-dealing in how some companies won the awards, including those affiliated with George Norcross, a South Jersey powerbroker with deep Camden ties.
That investigation has infuriated Camden and South Jersey officials, who issued an angry news release last week declaring the governor was not welcome in Camden ”unless and until he stops attacking the city.”
Further escalating that feud, Norcross and a handful of firms linked to him sued Murphy Tuesday in Superior Court in Mercer County.
The lawsuit alleges the task force investigating the tax incentive programs was unlawfully created.
The group is seeking the dissolution of the task force, as well as the repayment of $1.3 million in public funds that went to the New York-based law firm counseling the task force, whose lead attorney isn’t licensed to practice in New Jersey, according to Norcross’ lawyers.
Meanwhile, the tax incentive programs are due to expire at the end of June, and there is no consensus in Trenton whether to renew or revamp them.
$56 million hotel project, $18 million tax break
The hotel project, estimated to cost $56 million, was awarded an $18 million development grant from the state, according to memos written by an executive with the Economic Development Authority, which administers the tax break programs.
Conner Strong & Buckelew, the insurance brokerage where Norcross serves as executive chairman, had a 30% stake in the project when the grant was approved in June 2017, as did NFI and The Michaels Organization.
Those three companies separately received a combined $245 million in tax breaks to build an 18-story office tower just south of the hotel site.
Ownership of the hotel project changed hands five months after the grant was approved and is now owned by six different entities.
Kam Babaoff, chairman of Ensemble Real Estate Investments, one of the owners, said cobbling together financing for the project was tricky, with several banks rejecting his company’s proposal because the project was located in Camden.
“In the course of trying to finance this project, we got many, many noes,” he said Tuesday. “We would call bankers that would do projects for us, and they would say, ‘Where’s the project?’ and we would say ‘Camden,’ and they would say, ‘We can’t get that passed our investment committee.’ And that’s all we needed to hear to make us even stronger and more determined to get this done.”
Camden’s last true hotel, the Hotel Plaza, was closed in 1985 and demolished in 2014.
Moran said Tuesday the new Hilton Garden Inn, which is expected to open by October 2020, would bring 75 jobs to the city.
The EDA memos said the hotel will create 55 permanent jobs and 240 construction jobs.
Camden is not the only major city in New Jersey that has struggled to support a hotel. Trenton’s only hotel, built by the city about 20 years ago, was shut down by the state in 2017 over numerous safety violations. It has not reopened, despite numerous efforts.
The Associated Press contributed to this report.