Judge rejects Dranoff bid for ruling against Camden waterfront claims, keeping case on track for jury trial

A New Jersey judge has ruled that a jury must weigh in on Camden’s allegations against Carl Dranoff in the city’s lawsuit over the developer’s Victor Building project, rejecting a bid by Dranoff to have the suit tossed out of court.

State Superior Court Judge Steven J. Polansky said in an order filed Monday that he was denying motions for summary judgement by Dranoff’s lawyers in a dispute in which Camden claims the developer shortchanged the city on $9 million in project taxes and didn’t file required financial reports.

The order sets up a high-stakes courtroom battle — currently scheduled for June 28 — between Camden and the developer, who have been feuding over the project since its planned sale was scuttled by the city in 2018.

At the heart of the case is a dispute over whether Dranoff’s Victor Urban Development LLC violated an agreement to pay the city a share of its gains from the 349-apartment Victor Building.

“Defendants allege that they informed the city that they intended to make no profit. ... Plaintiffs contend that defendants represented the opposite,” Polansky wrote in an opinion accompanying his ruling. “This is the type of fact dispute that the court cannot resolve on summary judgment.”

Before setting his sights on Camden in the early 2000s, Dranoff had already made a name for himself in Philadelphia with such projects as the Locust on the Park apartments in the Fitler Square neighborhood.

At the time, the vacant wreck of Camden’s former RCA Victor record factory stood as a monument to the deindustrialization that had left much of the city blighted and forlorn.

He bought the iconic building in a deal that included a 2002 “tax agreement” with Camden officials that limited his payments to the city to $200,000 a year, then spent the following two years restoring the property into apartments.

Dranoff also planned to work with Liberty Property Trust on other properties, but those plans were never realized after what he characterized as a falling out with local officials.

By the spring of 2018, Dranoff had struck a deal with Apartment Investment & Management Co. (Aimco) to sell the Victor building, along with his entire portfolio of Philadelphia-area rental buildings, to a Denver-based investment trust for $445 million.

For the Victor to change hands, however, Dranoff needed Camden’s permission to transfer the 2002 tax break to Aimco. The city was legally required to pass on the tax cut but never did, Dranoff argued in a lawsuit.

Camden followed up with a suit of its own six months later. It accused Victor Urban Development of scheming to avoid paying what the city described as “excess profit” owed under the 2002 deal.

The city also claimed that the company neglected for more than 14 years to provide those annual financial reports.

Once Dranoff provided the disclosures in connection with his request to transfer the Victor tax deal to Aimco, they showed that excess profits owed the city were instead being retained by another Dranoff-controlled entity, Camden alleged.

Judge Polansky said in his opinion Monday that those “claims of unjust enrichment, fraud, and misrepresentation present fact questions sufficient to survive summary judgment.”

Camden also accused Dranoff in its suit of blocking the revitalization of a nearby vacant building known as Radio Lofts, which also had been part of the RCA Victor complex on the Delaware River waterfront. The city complained that he was clinging to an “options agreement” to redevelop the property that Camden official believe has lapsed.

Camden Mayor Frank Moran cast Polansky’s ruling as a victory.

“Judge Polanksy saw through Mr. Dranoff’s legal smokescreen to focus on the question of whether he unjustly benefited himself at the expense of the city,” he said. “We look forward to quickly moving ahead with this matter, as this has dragged on for far too long and Camden has already paid too high a price.”

Dranoff lawyer Aaron Krauss also said he looked forward to a trial.

“We believe that when a jury hears the value of what Carl Dranoff did and the amount of taxes he paid to Camden over the last two decades, they’ll conclude he doesn’t owe another dime,” he said.