For New Jersey city, tax-free development comes at a cost

CAMDEN, N.J. — It’s been a big summer for New Jersey’s most troubled city. In June the state’s Economic Development Authority (EDA) announced that the Philadelphia 76ers basketball team will move its practice and administrative facilities to Camden’s riverfront. (It will still play games in South Philly.) The practice facility will bring 250 jobs to Camden, although 200 of them are already filled and will simply be shifted from the existing site.

The next month, the agency unveiled a plan for Holtec International to establish a factory in Camden to manufacture nuclear-power-plant equipment. The company promises to bring 395 jobs — 160 of which are already filled and will be relocated from other factories — for the massive new facility in the southern, industrial strip of the waterfront. The deals were accompanied by a total of $342 million in tax subsidies and credits.

“In the bigger picture, an important part of the value of these incentives is the ripple effect they have on an area, particularly a distressed one,” EDA spokeswoman Virginia Pellerin told the Courier-Post after the announcement of the Holtec deal, the third-largest single tax break in New Jersey’s history.

Peter Toso, for one, is unimpressed. He is the owner of A Little Slice of New York, a pizzeria in a largely vacant block of downtown Camden. (Other denizens of the block include a storefront law office, a fruit shop and the long-abandoned Viral’s Food Market.) Toso opened his restaurant in 1992, just as the state’s and county’s first investments in the revitalization of Camden were coming to fruition. More than two decades later, his store remains one of the only small businesses in Camden’s downtown and riverfront areas, where most of the public investment has been directed.  

“All that development on the waterfront has done little to [nothing] for the city,” says Toso, whose pizzeria is a few blocks north of the stately City Hall and on the western outskirts of the sprawling Rutgers University at Camden campus. “[Downtown] we have a mass exodus at 4:30 [p.m.]. No one stays in the city and patronizes any of these establishments.”

Public subsidies for developments in Camden have been vast in scope. On the waterfront, there was the initial $52 million in state funds for the now privatized Adventure Aquarium (completed in 1992); an initial $20 million from public agencies and state, county and federal government sources for the Battleship New Jersey Museum and Memorial (opened in 2001); $17 million for the Susquehanna Bank Center (opened in 1995 under a different name); and at least $15 million for an aerial tram to Philadelphia that never came to be.

Cooper University Hospital, a few blocks inland, regularly receives public funding from the state, including $52 million in 2012, according to the The Philadelphia Inquirer. And the military contractor L3 Communications (a remnant of industrial goliath RCA) won an estimated $34 million to “stay put,” in the words of Cornell University professor Jefferson Cowie. The city received $175 million in aid when the state took over the powers of the city government from 2002 to 2010. But as the Inquirer’s Matt Katz reported in 2009, $100 million of that was directed toward large private institutions, including expansions of the aquarium and the hospital.

“The city is being reborn from the waterfront out,” Frances Burnstein, then–executive director of the suburban Cherry Hill Chamber of Commerce, told The Philadelphia Inquirer in 1988. “It will be a new Camden.” Fifteen years later, with no evidence of that rebirth and the state taking over the city’s legislative and executive bodies, the developer of the RCA Victor apartment building, Carl Dranoff, enthused, “Camden is happening. It’s not going to be the poorest city 10 years from now. Our property, which was once the symbol of blight, will be the symbol of a remarkable revival. How could it fail, with all the energy and creativity — and cash — flowing into it?”

Today Camden’s downtown and waterfront are well maintained, and the vacant buildings in the core are not in gross disrepair. That contrasts with nearby Chester, another small, deeply impoverished, postindustrial city 20 miles down the Delaware River. But the sights and sounds associated with urban life — bustling streets, small businesses crowded into storefronts, the buzz of corner conversations — are largely absent.

“For the overwhelming majority of people in Camden, it does not appear that those institutions touch their lives,” says Gordon MacInnes, president of New Jersey Policy Perspective, a liberal think tank. “This is not to say nothing has been done … but these are marginal improvements.”

Still, by most measurable statistics, Camden has deteriorated since the redevelopment efforts began. Unemployment is at 23.9 percent, and 35.2 percent of the population lives below the poverty line. The city’s finances are more ruinous than ever. Local sources, for example, contribute just 2.7 percent of the school district’s budget.

None of the projects unveiled this summer, meanwhile, require that a set percentage of the jobs created downtown or along the waterfront go to Camden residents. That exacerbates a longstanding issue. Of the 30,397 jobs in the city, only 4,261 are held by locals. Although a third of Camden households do not have access to a car, most of the area’s job opportunities are in the suburbs: 82.3 percent of employed Camden residents work outside the city.

The jobs that exist along the waterfront “are fairly low-paying, typically seasonal. People aren’t getting benefits, and the jobs don’t transition to bigger jobs,” says Sean Brown, founder of Young Urban Leaders, whose first job was a minimum-wage position at the aquarium. “The 30 people from Camden who get a job [at the 76ers complex] might be happy about it, but I’m not sure you can justify that with millions and millions in tax breaks.” (Holtec says it could bring as many as 3,000 jobs to the city, but it is legally required to maintain only 395 at the facility, and there is no guarantee that the hires will be from Camden.)

The promised ripple effect of downtown and riverfront development might be more obvious if the tax breaks for larger institutions were accompanied by aid for small businesses. But the tax subsidies and credits available through the state go mostly to larger institutions both in Camden and elsewhere. New Jersey’s Small Business Development Centers receive just a quarter of a million dollars a year from the state.

Along the riverfront, seas of parking lots surround the area’s entertainment centers, and the only bars and restaurants are those on the ground floor of the Victor condo building. “When [people] come in for a concert, they are directed in one route and directed out by another route,” says Raymond Lamboy, president of the Latin American Economic Development Association. “They are not allowed to deviate from that route.”

A couple of blocks inland, the L-3 Communications office building is sealed off from the surrounding area, with its own cafeteria and fenced parking lots. The company received $13 million from the county and $21 million from the state to stay put. There is little foot traffic.

In the early evening on a recent weeknight, the only businesses open downtown were a Subway sandwich shop and a 7-Eleven on the ground floor of a Rutgers University building — and, until 9 o’clock, A Little Slice of New York.

“I’m within 100 yards of Rutgers, within 100 yards of what was Campbell Soup and RCA, within two blocks of the waterfront,” says Toso, who moved to the suburbs a few years after A Little Slice opened in search of a better school district for his young children. He figured that, eventually, after all the redevelopment, the city would rebound and his shop’s fortunes along with it. “But 22 years later, I still have the time to sit and talk. If this pizzeria was in proximity to any other university in the country, I’d be out on the golf course right now.”