A long-running legal battle between Camden and developer Carl Dranoff has been settled — but they’re still fighting

The City of Camden announced a settlement Friday that would end its five-year legal battle with Philadelphia developer Carl Dranoff over tax payments on luxury apartments he developed two decades ago at a once blighted property on the city’s waterfront.

But while the litigation may be over, the fighting between the parties continues.

Camden Mayor Victor Carstarphen celebrated the news of the settlement, contending that it would provide the city more than $7.75 million in monetary and property assets. In a blistering statement, he bashed Dranoff as a bully and “do-gooder pretending to be a part of our revitalization efforts when, in fact, he was lining his own pockets.”

Dranoff pushed back, challenging Carstarphen’s characterization of the deal, calling the mayor’s claims about him “false, misleading and defamatory,” and reiterating an accusation he’s made throughout the litigation: that his problems in the city stemmed from “a vendetta” that South Jersey power broker George E. Norcross III is pursuing against him through allies in the city government.

“This case was all about fairness and the ongoing corruption in Camden, and about how people and organizations that disagree with George Norcross are victimized and bullied with frivolous lawsuits and unjust tax bills and accusations,” Dranoff said. “It is he who should be called out for masquerading as a do-gooder.”

It was Norcross who first alerted Dranoff on Friday to Carstarphen’s accusatory statements about the settlement. Norcross, who is not a named party in the legal fight, forwarded the city’s news release on the agreement to Dranoff by email with no message, according to emails Dranoff shared with The Inquirer.

And by Friday afternoon, Norcross had decided to enter the fray himself. He blasted out Carstarphen’s statement to his public email list under the all-caps headline “FRAUD EXPOSED!!!” and later issued a statement of his own.

“Carl Dranoff has now admitted that he bilked the citizens of Camden, once one of the poorest cities in America, for millions of dollars,” Norcross said. “Today’s settlement represents a complete and total victory for the City of Camden and its citizens.”

Amid that back-and-forth, neither Camden nor Dranoff provided a copy of the settlement agreement, and its terms had not been filed on public court dockets.

But in describing the deal, both sides said Dranoff had agreed to pay Camden $3 million plus additional tax payments of $150,000 in each of the next two years on the apartment building known as the Victor Lofts.

As part of the deal, they said, Dranoff will also relinquish to Camden development rights to a blighted, city-owned property known as Radio Lofts, as well as a neighboring parking lot his company owned — though both sides disagreed Friday on the value of those assets.

Whatever the specific terms, the deal will resolve one of the most heated legal battles to play out in South Jersey in years, which has pitted two of the region’s biggest names in politics and real estate development against one another.

Dranoff made his name in real estate renovating historic properties and building luxury condo towers, many of them on South Broad Street in Philadelphia, including Symphony House and the Arthaus building.

In the early 2000s, he redeveloped a former RCA Victor record factory on Camden’s waterfront into the Victor Lofts, converting the blighted property into the first market-rate housing development in Camden in decades — a project that city leaders heralded at the time.

Norcross is executive chairman of insurance brokerage Conner Strong & Buckelew, and chairman of the board of trustees at Cooper Health System, both based in Camden, and a longtime player in Democratic politics. A Camden native, he’s been widely credited with efforts to spark a private investment-fueled turnaround in the city but his efforts have repeatedly drawn scrutiny from state government officials and law enforcement.

Dranoff has claimed, in deposition testimony, that he had a falling out with Norcross over a proposed real estate deal on Camden’s waterfront in 2016. Ever since, he has alleged, Camden officials loyal to Norcross have thrown roadblocks on other Camden projects in his path.

Specifically, Dranoff sued Camden in 2018 after it did not agree to transfer a tax agreement he originally negotiated with the city for the Victor building in the mid-2000s to a company to which he was hoping to sell the building. That lapse prompted the potential buyer — Denver-based real estate company Aimco — to pull out of the $71 million deal.

Dranoff claimed the city was obligated to approve the transfer under the terms of their original redevelopment agreement for the building.

Camden, though, responded with a suit of its own against Dranoff, alleging that he was the one who failed to live up to the terms of their contract and accusing him of hiding more than $9 million in profits it said he owed from the Victor redevelopment.

Under the 2002 agreement, Dranoff was exempt from paying property taxes on the Victor apartments over a period of years. In exchange, he had to pay an annual fee of $200,000 — plus any “excess net profits” realized from the project.

The two sides disagreed on how to calculate project costs and those “excess net profits,” leading to wildly different figures of what each side said was owed — Dranoff claimed he owed nothing, while the city said he owed $9 million.

They also clashed over whether Dranoff in 2002 disclosed to the city the full terms of a revenue-limiting ground lease on the building with another entity he controlled. Camden maintained Dranoff secretly divided expenses among the two entities in a way that was designed to hide his profits.

The developer said that city officials were fully aware of that arrangement when they first agreed to the lease and that those terms were essential to making the Victor redevelopment viable in the first place.

In his statement Friday, Dranoff said that Camden, as part of their settlement deal, had acknowledged that his $200,000-a-year calculation for taxes owed on the Victor Building was correct and that he could continue to pay under the same formula that he’s been using for the last two decades.

A city spokesperson said he couldn’t confirm that aspect of the deal.

The city had also accused Dranoff in its suit of stymieing the development of the vacant Radio Lofts building nearby, saying he tried to use his rights to the property as leverage in negotiations over the sale of the Victor building.

Dranoff had planned to build an 82-condo tower there, but the effort stalled amid unsuccessful efforts by the city to fund necessary environmental remediation. The city sent Dranoff a letter in 2018, saying it was terminating his development rights to the property.

Dranoff has said in a deposition that he tried to persuade the city to change the zoning so he could develop a commercial property, instead. Such a project would face less stringent environmental regulations.

But Dranoff says that plan ran into resistance from Norcross’ brother Philip, a lawyer who advised the Camden Redevelopment Agency.

In depositions, city and CRA officials said Philip Norcross and his law firm, Parker McCay, helped the city and CRA devise strategies for dealing with Dranoff, and that a lawyer from the firm had helped write the letter terminating the development rights to Radio Lofts.

A spokesperson for Norcross and the law firm denied those claims Saturday, saying neither Philip Norcross nor Parker McCay had ever advised the CRA.

In his statement Friday, Carstarphen called the Radio Lofts long-vacantbuilding a “scar on the city landscape” and vowed, once the settlement deal is approved by City Council, to “address [it] to enhance the quality of life for all residents in Camden.”

Dranoff, meanwhile, reiterated his commitment to Camden, too.

“I love the people of Camden, and we will continue to serve them as the proud owner of the Victor,” he said. “I settled the case to put this behind me and move on.”

While the settlement brings an end to the civil litigation, it may not be the last word on Dranoff’s business dealings in the city.

The Inquirer reported in June that the New Jersey Attorney General’s Office and FBI were investigating Norcross’ real estate deals in Camden — including his disputes with Dranoff.

Norcross, through his lawyers, has denied any wrongdoing.

This article has been updated to reflect a statement from a spokesperson for Philip Norcross.