Philly developer Carl Dranoff sues George Norcross and his brother Philip following criminal racketeering indictment

A key potential witness in the racketeering case against George E. Norcross III has sued him, less than three months after a state grand jury accused the New Jersey power broker of using threats and intimidation to secure the rights to lucrative waterfront property in Camden.

The lawsuit, filed Wednesday by Philadelphia developer Carl Dranoff in Camden County Superior Court, includes many of the same allegations in the criminal indictment New Jersey Attorney General Matt Platkin unveiled in June. It also mirrors accusations Dranoff previously lodged against Norcross in a separate 2018 civil suit against the City of Camden, which ended in a settlement last year.

Dranoff maintains Norcross used his influence over local government to scuttle a 2018 deal Dranoff had arranged to sell a luxury apartment complex known as the Victor Lofts he had developed on the waterfront.

The complaint, which also names Norcross’ brother Philip as a defendant, asks the court to award Dranoff more than $50 million in damages on claims including civil conspiracy, tortious interference, and racketeering.

“Dranoff faced illegal and extortionate pressure tactics from the [Norcrosses’] criminal enterprise for years,” the suit says. “G[eorge] Norcross and his associates delivered on those threats, leveraging the power of the government of Camden … to interfere with a deal that was all but final, resulting in tens of millions of dollars of lost profits.”

Representatives for the Norcross brothers shot back Friday.

Kevin Marino, lawyer for Philip Norcross, dismissed the suit as “a transparent attempt to monetize the baseless allegations in the AG’s indictment.”

Dan Fee, a spokesperson for George Norcross, said it was Dranoff — not the Norcrosses — who had defrauded the citizens of Camden.

“Mr. Norcross agrees with what Camden Mayor Vic Carstarphen said when [that earlier 2018 civil] case was settled,” he said in a statement. “Mr. Dranoff ‘masqueraded around [Camden] as a do-gooder pretending to be part of our revitalization efforts, when in fact, he was lining his own pockets and depriving the city of badly needed funds.’”

The lawsuit comes as lawyers in Norcross’ criminal case are set to return to a Trenton courthouse next week to hash out a schedule for bringing that matter to trial. Though prosecutors have not yet said whether they intend to call Dranoff as a witness, the civil suit could complicate any testimony he might give.

Norcross’ lawyers are likely to use the lawsuit filed this week to attack Dranoff’s credibility and argue he now has a financial interest in their client being convicted — a strategy Fee nodded toward in his statement Friday.

Dranoff’s “out-of-state lawyers may not know all the facts about what [he] did to Camden,” Fee said. “But the record is clear, and Mr. Norcross looks forward to detailing it publicly for the first time while Mr. Dranoff sits in the witness stand.”

Dranoff first invested in Camden in the early 2000s, when he agreed to redevelop a blighted former manufacturing facility that had been sitting vacant for years into the city’s first new market-rate housing in decades — a building that would become the Victor Lofts.

To incentivize what was otherwise considered a risky investment, the city allowed Dranoff to make annual payments in lieu of property taxes, plus any “excess net profits” realized from the project. Property values change over time, so the set payments were seen as more predictable and business-friendly. Dranoff at the time also obtained the rights to develop another vacant property nearby known as Radio Lofts.

In early 2018, Dranoff reached an agreement to sell the building to Denver, Colo.-based real estate investment firm Aimco for $71 million, but to do so, he needed the city to transfer his tax agreement to the new buyer.

But that spring, Philip Norcross — a lawyer who regularly met with city officials in “stakeholder” meetings — urged the officials to make sure the transfer approval was “slowed down,” according to the indictment and Dranoff’s lawsuit this week.

The city has said that as officials reviewed the transfer request, they discovered Dranoff had failed to provide years’ worth of financial documents required by law.

Ultimately, Camden officials didn’t approve the transfer, prompting Aimco to drop out of the deal. And the city sent Dranoff a letter purporting to terminate his option to develop the separate Radio Lofts property.

Dranoff sued the city, saying it didn’t have a legal right to do that. The city countersued, saying it had discovered that Dranoff had failed to pay millions of dollars in “excess net profits.” The judge overseeing the matter noted at one point, that if proven, Camden’s claims against Dranoff would potentially amount to “a fraud upon the municipality and its residents.”

But before it got that far, the parties agreed to a settlement last September after five years of litigation that cemented Dranoff’s preferred understanding of the financial agreement governing how much he owes the city from the Victor building’s profits going forward. But he agreed to pay the city $3 million plus additional tax payments of $150,000 over the next two years. He also relinquished to Camden his rights to Radio Lofts and an adjacent parking lot — property the city valued at more than $4 million.

In their indictment last month, prosecutors alleged Dranoff gave in “despite believing he was in the right” because of the considerable cost of litigation and concerns that the corruption he says he experienced in Camden would interfere with his lawsuit getting a fair hearing in court.

In his new lawsuit this week, Dranoff’s lawyer’s said that he still maintains he was “swindled and extorted” despite that settlement agreement and that “the indictment makes plain that Dranoff has always been correct in this belief.”

“Dranoff,” they added, “stands as a cautionary tale to all those who would seek to take on entrenched corrupt interests to improve the region and its residents’ lives.”