A top Philly real estate and private equity investor may be called as a witness in George Norcross’ racketeering case

What at first seemed to be a lucrative development opportunity for one of Philadelphia’s top real estate and private equity investors has since turned into a protracted legal headache that may ultimately land him on the witness stand in one of the region’s most closely watched political corruption cases in decades.

Ira M. Lubert, 74, is not mentioned by name in the racketeering indictment New Jersey prosecutors unveiled against Democratic power broker George E. Norcross III in June. Nor has he been accused of wrongdoing.

Yet the charging document — in which Lubert is referred to throughout as “Investor 1″ — depicts him as a beneficiary of what prosecutors describe as a criminal pressure campaign orchestrated by Norcross and his brother Philip.

A well-known civic leader and philanthropist, Lubert has served on the boards of prominent institutions such as the National Constitution Center, Thomas Jefferson University Hospital, and Pennsylvania State University. In 2014, he and a business partner acquired a Camden waterfront office complex for $20 million below its appraised value, according to the indictment.

That deal was enabled, prosecutors say, by an extortion scheme in which Norcross and his allies pressured the nonprofit group Cooper’s Ferry Partnership into selling its interest in the property, known as the L3 Complex, for far less than it was worth while also forgoing millions of dollars in expected future earnings.

The alleged strong-arming also benefited Cooper University Health Care, the hospital network for which George Norcross is the longtime board chairman. Prosecutors say Cooper Health obtained millions of dollars in government-issued tax credits to cover its rent as a tenant and acquired a stake in the property.

Norcross and his five codefendants have denied any wrongdoing. Lubert’s role in the L3 transaction was reported by The Inquirer and other news outlets in 2019. Prosecutors have not accused him of having any knowledge of the alleged coercion.

Lubert, through an attorney, declined an interview request for this article, and it remains to be seen what he might say, under questioning, should he be called as a witness in Norcross’ eventual trial.

» READ MORE: A defiant George Norcross pleads not guilty, as attorneys attack racketeering case against the N.J. powerbroker

The indictment and additional reporting by The Inquirer shed new light on financial and political ties among Lubert, his family, George Norcross, and organizations linked to the power broker in the months surrounding the deal.

For instance, in an incident referenced in the indictment, Cooper Health invested $10 million into a fund run by Lubert’s son Jonathan shortly after the L3 transaction closed. The hospital network said in a statement the investment “had nothing to do with the purchase of real estate in Camden or elsewhere.”

In addition, Lubert — who had rarely donated to New Jersey political candidates or causes — gave $10,000 to a so-called dark money group closely affiliated with George Norcross in the months leading up to the L3 transaction, according to information obtained by The Inquirer.

Prosecutors did not mention the political contribution in the indictment, nor have they elaborated on the significance they see in Cooper Health’s investment in the younger Lubert’s fund. A spokesperson for Norcross declined to comment for this article.

» READ MORE: ‘New Jersey politics is a blood sport’ and other key takeaways from prosecutors’ case against S. Jersey power broker George Norcross

Lubert’s lawyer — William A. Harvey, a partner at the Philadelphia-based law firm Klehr Harrison Harvey Branzburg LLP — declined to answer written questions about the indictment and his client’s business relationship with George Norcross.

Lubert’s representatives previously defended his role in the L3 deal, saying in 2019 that Cooper’s Ferry lacked expertise in real estate development and that he and his business partner increased the value of that property by negotiating leases with tenants.

“As a leader in this region in private equity, real estate, and venture capital, Ira is referred hundreds of potential investments each year to review,” Harvey said in a recent statement. “Ira reviewed and underwrote the L3 opportunity like any other. Nothing at all special.”

Prosecutors have not specifically alleged why the Norcrosses wanted Lubert involved in the L3 deal. Lubert fits the indictment’s description of “Investor 1,” according to reporting by The Inquirer and records reviewed by the news organization.

In their 2019 statement, a spokesperson for the developer and his business partner, commercial landlord Howard Needleman, told The Inquirer that Philip Norcross and “representatives of Cooper Hospital” reached out to them in the spring of 2014 to gauge their interest in buying the property. They understood that Cooper Health was interested in becoming a tenant in the building.

This made sense to Lubert and his partner because Cooper Health had previously rented space in various buildings owned and operated by Needleman, and Needleman had partnered with Lubert on multiple real estate transactions, the spokesperson said.

Cooper Health, likewise, pointed in 2019 to its “long-standing and successful relationship” with Needleman dating back almost 25 years.

Involving Lubert made sense in other ways. He and George Norcross had an “ongoing financial relationship” at the time, according to the indictment.

They had unsuccessfully bid on a Cherry Hill country club together in 2013, and that same year Norcross had invested $500,000 in a data center company with Lubert — though, prosecutors said, they both lost money on that deal.

More broadly, Lubert, who lives in Center City, had a long track record of profitable investment and property redevelopment.

As cofounder of Independence Capital Partners, a cluster of private equity and real estate funds that manages billions of dollars, he has clients who have included retirement plans for Pennsylvania state workers and teachers. He has also invested in casinos, opening the Valley Forge Casino Resort in 2012 and later selling it for $280.5 million.

His real estate investment firm, Lubert-Adler, is one of Philadelphia’s largest property redevelopers. In the late 1990s and early 2000s, the firm invested $500 million into turning empty buildings mainly into apartments, including the Second Empire-style Victory Building on Chestnut Street.

More recently the firm helped transform a former industrial site on the banks of the Schuylkill into a nine-story office building whose tenants include food- and facilities-services giant Aramark Corp. It’s currently renovating Center City’s iconic 19-story Bellevue and converting a former power plant in Fishtown into a residential and hotel complex known as the Battery.

A philanthropist, he has given millions of dollars to a variety of causes and institutions, including gifts to United Way, Thomas Jefferson University Hospital, and the Lenfest Institute for Journalism, which owns The Inquirer but does not exercise editorial control over the news organization.

He and Norcross have shared interests in their philanthropy; since 2013, Lubert’s family foundation has donated more than $86,000 to the Cooper Foundation — Cooper Health’s charitable arm — whose chairman is Philip Norcross, tax filings show.

A champion wrestler while an undergraduate at Pennsylvania State University in the late 1960s and early ‘70s, Lubert later chaired the university’s board of trustees.

And in 2014, Drexel University’s LeBow College of Business named him “Business Leader of the Year” — a distinction it bestowed on George Norcross, an insurance executive, a few years later.

Though Lubert had donated hundreds of thousands of dollars to Pennsylvania politicians over the years, his giving in New Jersey was minimal at the time the L3 opportunity arose. His most recent donation to a committee or candidate for state office in New Jersey at the time was a $500 contribution about 20 years earlier, records show.

And yet in April 2014, according to information obtained by The Inquirer, Lubert donated $10,000 to General Growth Fund — a now-defunct nonprofit political group run by George Norcross’ allies and which is not required under federal law to disclose its donors.

The donation, which has not been previously reported, came around the same time the Norcross brothers were allegedly pressuring Cooper’s Ferry to partner with Lubert on the L3 deal.

Lubert’s attorney declined to discuss the contribution or say who, if anyone, solicited it.

No matter Norcross’ reasoning for allegedly wanting Lubert involved, by January 2014, the L3 complex was already under contract to sell to another entity: Cooper’s Ferry Partnership, a Camden-based nonprofit focused on redevelopment.

It had signed an agreement that month with the state Economic Development Authority to buy the property for $32.7 million, with the state offering a 10% discount on its market value due to Cooper’s Ferry’s status as a nonprofit, the indictment says.

That spring, Cooper’s Ferry reached an agreement, which ultimately was never signed, with Mack-Cali Realty Corp. and Keystone Property Group to complete the purchase with the nonprofit receiving a $9.3 million credit and a share of future profits, according to the indictment.

George Norcross, according to prosecutors, intervened in the deal.

He told John P. Sheridan Jr. — cochair of the Cooper’s Ferry board who was also CEO of Cooper Health — that the nonprofit “should not be in the development business,” the indictment says.

Norcross’ brother Philip, a lawyer who is also charged in the racketeering case, repeatedly pushed Cooper’s Ferry CEO Anthony Perno to turn the deal over to private investors including Lubert, the document states.

Cooper’s Ferry wanted to choose its own developer partner. But prosecutors say the pressure from the Norcross brothers continued.

Perno sought help from then-Camden Mayor Dana L. Redd, who was also a cochair of Cooper’s Ferry. She is now charged alongside the Norcross brothers, accused of instructing Perno to deal with Philip Norcross and warning the nonprofit CEO that his job was in jeopardy if he didn’t.

Eventually, Perno relented — agreeing to partner with Lubert and later sell Cooper’s Ferry’s interest in the L3 complex — fearing what he “understood to be a threat from Philip Norcross” and his “knowledge of [George Norcross’] conduct in the past,” the indictment says.

» READ MORE: George Norcross’ power: Real or imagined? Prosecutors highlight his reputation for hardball.

On Dec. 30, 2014, Cooper’s Ferry acquired L3 from the EDA at a discounted $33 million sale price it had already negotiated — one that would not have been available to Lubert and Needleman as for-profit investors, the indictment says. Lubert and Needleman provided the funding, made available through a bank loan, and Cooper’s Ferry transferred the property to the investors.

In the months before the deal closed, Lubert and Needleman’s mortgage bank commissioned an appraisal that valued the property at $54 million — about $20 million more than what was eventually paid to close the deal.

That difference was first reported by The Inquirer in 2019. A spokesperson for Lubert and Needleman said then that the eventual sale price was based on an earlier appraisal commissioned by the EDA and that the investors had increased the property’s value by negotiating leases with tenants, including Cooper Health.

Cooper’s Ferry, in the end, was paid $575,000 for its role in the transaction — and netted even less. After accounting for its own expenses, the nonprofit earned roughly $125,000 from the deal.

Lubert and Needleman’s spokesperson has said Cooper’s Ferry underestimated the costs of the transaction.

Representatives for the Norcross brothers, meanwhile, have disputed the notion that they played any improper role and note that neither man personally made money off the deal.

Cooper Health has said that Cooper’s Ferry’s tentative agreement with its preferred developers was never finalized and insisted that it lacked the financing to close the L3 deal. They accused the nonprofit of trying to force Cooper Health into an above-market rental agreement to secure the necessary funds.

Either way, by November 2014, Cooper Health applied to the Economic Development Authority for $40 million in tax credits as part of its plan to relocate hundreds of jobs into the L3 complex — incentives that were made available through a law prosecutors now say was written in part by Philip Norcross and his law partners.

To date, the hospital network has obtained $27 million in credits and sold them for $25 million in cash to cover its rent payments, prosecutors say.

Then, in March 2015, Lubert and Needleman sold a 49% stake in the L3 venture to Cooper Health for $2.45 million, the indictment says. (Cooper has said its board approved the investment a few months earlier in December.)

According to the indictment, the parties had agreed before the sale of the building was finalized that Cooper would become an owner, but the hospital network didn’t disclose those intentions to the EDA at the time because it feared its ownership stake would complicate its ability to secure tax credits as a tenant. Cooper Health has said that at the time of its application, it did not have an agreement to acquire an interest in L3.

Just a month later, in April, prosecutors say, Cooper Health invested $10 million into a fund run by Lubert’s son Jonathan. The younger Lubert, head of investment management firm JL Squared Group, isn’t mentioned by name in the indictment but is referred to as “a relative of Investor 1.”

Cooper Health told The Inquirer that its “financial investments are vetted by Cooper’s management team, an investment committee, and independent advisers.”

The hospital network’s management team made the investment with JL Squared Group following advice from an “independent adviser,” said spokesperson Thomas Rubino.

The investment “ended in 2019,” Rubino said, adding that Cooper’s board of trustees, led by George Norcross, “did not review nor approve the investment.” Jonathan Lubert, 44, didn’t respond to a request for comment.

In 2017, the new L3 owners refinanced their bank loan on the property and obtained $10 million — another benefit prosecutors say they received “as a result of the Norcross Enterprise’s conduct.”

In the years since, the L3 deal has come under scrutiny from multiple law enforcement agencies, culminating in June’s indictment.

Nevertheless, the elder Lubert has continued his political giving in South Jersey.

Since 2015, records show, he’s donated about $30,000 to super PACs backed by George Norcross and campaigns for Norcross’ brother Donald, a congressman. He wrote the most recent check in May.

Whether Lubert’s possible testimony at George Norcross’ eventual trial would help or hurt the defendant remains an open question.

Lubert, his attorney said, “may be a witness in the case for one or both sides.”