CAMDEN, N.J. (AP) — Under Republican Gov. Chris Christie, New Jersey has authorized more than $2 billion in economic development tax breaks since 2014, often to corporations with notable political connections. One grant went to a developer who owes millions of dollars on an unpaid state loan, an Associated Press review found.That total of tax breaks handed out by New Jersey's Economic Development Authority is more than the total amount issued during the decade before Christie took office.
The aid has gone disproportionately to businesses in Camden, a beleaguered city of 77,000. Development projects in the city received $630 million in future tax breaks last year. In his January state of the state address, Christie said that the money in future tax breaks awarded to Camden development projects means the city is "seeing a new tomorrow."
As Christie considers a Republican presidential campaign, a Camden renaissance would offer a useful counterpoint to New Jersey's lackluster economic performance. But a closer look at the grants — which will amount to nearly four times Camden's annual budget — indicates they may do less for the city than advertised and more for Christie's political alliances.
Most of the jobs coming to Camden are filled by existing employees who currently work just a few miles away. One tax break exceeded the value of the company that received it. And nearly all the recipients boast notable political connections.
The Christie Administration's Camden incentives raise questions about the governor's stewardship of New Jersey's finances — and whether Christie's claims of revitalizing Camden will resonate with Republican voters opposed to corporate welfare.
"Giving huge subsidies to companies moving from the suburbs of Camden to the city is just off-the-charts crazy territory," said Michael Doherty, a Republican state senator. "If you're a high-profile individual, you can get the EDA to make decisions to your benefit."
Christie spokesman Kevin Roberts said in an email that critics of the tax breaks "offer no alternative plans for creating jobs, growing the economy or renewing our urban centers."
Driving the 4 miles from Subaru's current U.S. headquarters in Cherry Hill to its new home in nearby Camden takes eight minutes. Making that trip will be worth nearly $118 million in tax breaks for Subaru.
Subaru's local relocation is not an exception: Most of New Jersey's Camden incentives have gone to projects that will simply transfer existing local employees to Camden, something that economists say is unlikely to add much to the regional economy.
Many of the tax breaks involve projects connected to Democrat George Norcross, a southern New Jersey Democratic powerbroker whose tacit support for Christie is widely viewed as vital to his 2009 victory over then-Gov. Jon Corzine.
Norcross is on the board of Holtec, a nuclear equipment manufacturer that will receive $260 million. He also sits on the board of Cooper Hospital, which received a $40 million grant and is the indirect beneficiary of two more. In recent years, Cooper has paid a combined $3 million to Norcross's insurance brokerage and a law firm owned by Norcross's brother, Philip, who also represented the Philadelphia 76ers basketball team in its successful pursuit of $82 million in tax credits.
Dan Fee, a spokesman for Norcross, said in an email that Norcross's only goal was Camden's revitalization. Economic Development Authority President Tim Lizura said his agency, not Norcross, decides what deals get made.
"Each approval stands on its own merits," said Lizura.
The scale of New Jersey's generosity has bolstered one profitable new industry: the resale of tax incentives by businesses that don't make enough money to use them. That camp includes both the 76ers and a company called DioGenix, which received a $7.9 million tax incentive last year to relocate to Camden. Two months later, DioGenix sold itself for between $8 and $10.9 million — to a buyer who expects to resell the tax breaks for at least $6 million.
As money has flowed to development in Camden, some trickled back into politics. Camden tax incentive recipients donated more than $150,000 to the Republican Governors Association during the time Christie ran it. But no donations are as notable as those from Pennsylvania developer Israel Roizman. Last February, the state awarded tax incentives worth $13.4 million to Broadway Associates 2010 LLC, a real estate development company he controls. The project in question: refurbishing 175 low-income housing units that deteriorated under two decades of Roizman's ownership.
Roizman received the tax breaks even though one of his companies owes New Jersey's Housing and Mortgage Finance Agency $6.2 million in unpaid loans on another Camden housing project. The agency still hopes to work out a repayment deal, spokeswoman Tammori Petty said.
Roizman is one of the region's top political donors, giving as much as $100,000 each year. Though Roizman was a campaign bundler for President Barack Obama, he donated $10,000 to the Christie-led governors association in late 2013, a few months before receiving his tax breaks. Last year, he gave the group the same amount.
Original Article
Source: huffingtonpost.com/
Author: JEFF HORWITZ and GEOFF MULVIHILL
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