From the Philly Inquirer:
A special task force appointed by New Jersey’s governor to investigate the state’s multibillion-dollar tax-credit programs released an extensive report Monday evening, finding that two powerful brothers – lawyer and lobbyist Philip Norcross and South Jersey power broker and businessman George E. Norcross III – enjoyed outsize influence over the tax-break legislation and its financial benefits.
Conner Strong & Buckelew, the insurance brokerage headed by George Norcross, and two other firms that partnered with the company to build an office tower in Camden collectively were approved for $245 million worth of tax credits in 2017. The report found that the Economic Development Authority’s “failure to investigate the red flags in these companies’ applications could have resulted in over $70 million in improperly approved tax-incentive awards.”
The law firm led by Philip Norcross, Parker McCay, and its clients “appear to have had a significant impact” on the Economic Opportunity Act of 2013, investigators found, pointing to draft copies of the legislation and internal email exchanges the task force obtained.
The law expanded the Grow New Jersey tax-credit program, which has directed about $1.6 billion to companies pledging to invest in the long-struggling city of Camden.
As a result of influence by “special interests” during the legislative process, the report found, the law was “structured to favor certain parties while disfavoring others in certain respects.”
This is the first report the task force has issued during its ongoing investigation. Among the companies the report examined was Cooper, which was awarded about $40 million in incentives in December 2014 to move office jobs from existing locations in Cherry Hill and Mount Laurel to Camden.
he task force said it found evidence suggesting that Cooper was never seriously considering relocating jobs out of state. Had the EDA calculated the award based on Cooper’s initial representation — that no jobs were at risk of leaving the state — the company would have won just $7 million in tax breaks, the report says. Cooper filed an updated form within a few days of its initial one, mentioning an alternative site.
Investigators pointed to a Nov. 25, 2014, email sent by a Cooper executive to a real estate broker that said Cooper needed a term sheet — a document outlining terms of a business agreement —for an office location outside of New Jersey to include in its application for tax credits.
“I need a credible location that is LESS expensive than L3” (a building on Federal Street in Camden), wrote Andrew Bush, Cooper’s vice president of real estate and facilities, to Jon C. Sarkisian, executive vice president at the real estate firm CBRE. Cooper ended up moving to L3.
Bush asked if the broker could secure a term sheet for 120,000 square feet of office space, suggesting the Centre Square building at 1500 Market St. in Philadelphia.
“No probability of us moving to Center Sq, so I don’t want to make too much noise,” Bush wrote.
“The obvious reference is that Mr. Bush was asking Mr. Sarkisian to provide a sham term sheet that could be supplied to the EDA as evidence of its bona fide intent to relocate outside New Jersey, when in fact Cooper Health had no such intention,” the task force report said.
EDA ultimately calculated its award for Cooper based on Bush’s representation to an agency underwriter that the company was considering relocating to Philadelphia, the report said.