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BROWN & CONNERY, LLP


William M. Tambussi, Esquire NJ ID #031431983
Mark P. Asselta, Esquire NJ ID# 034151985
Michael J. Watson, Esquire NJ ID #026432008
360 Haddon Avenue
Westmont, New Jersey 08108
(856) 854-8900
Attorneys for the City of Camden and
the City of Camden Redevelopment Agency

SUPERIOR COURT OF NEW JERSEY


CITY OF CAMDEN and the CITY OF LAW DIVISION
CAMDEN REDEVELOPMENT CAMDEN COUNTY
AGENCY
Docket No.
Plaintiffs,
Civil Action
v.
COMPLAINT
VICTOR URBAN RENEWAL, LLC;
VICTOR ASSOCIATES, LP; (Demand for Jury Trial)
VICTOR GP CORP.; DRANOFF
PROPERTIES, INC.; CARL E.
DRANOFF; and JOHN DOES 1-10

Defendants.

Over the last fifteen (15) years, the Defendants have engaged in a concerted scheme to

deprive the City of Camden of over nine million dollars ($9,000,000.00) in tax revenue. Most

recently, the Defendants have attempted to use valuable City property as leverage to pressure the

City’s administration into complying with their demands. Refusing to capitulate to the

Defendants’ heavy handed tactics and demands, the City and the Camden Redevelopment

Agency have discovered the breadth of the Defendants’ unlawful activities. The City and the

Camden Redevelopment Agency now seek to obtain the legal relief – and substantial revenue –

to which the City taxpayers are contractually and lawfully entitled.

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Jurisdiction and Venue

1. Pursuant to R. 4:3-1(a)(4), jurisdiction is proper in the Superior Court of New

Jersey, Law Division, since the principal relief sought in this matter is monetary damages.

2. Pursuant to R. 4:3-2(a), venue is proper in the County of Camden because the

causes of action arose in Camden County and Plaintiffs, the City of Camden and the Camden

Redevelopment Agency, are residents of the County of Camden, in the State of New Jersey.

3. Pursuant to the forum selection clause in Paragraph 15 of the “Financial

Agreement” referenced herein, venue is further proper in the Superior Court of New Jersey,

Camden County Vicinage.

The Parties

4. Plaintiff, the City of Camden (“City”), is a municipal corporation organized and

existing under the laws of the State of New Jersey, with administrative offices located at City

Hall, 520 Market Street, Camden, New Jersey.

5. Plaintiff, the Camden Redevelopment Agency (“CRA”), is a public agency

organized and existing under the laws of the State of New Jersey, with its principal place of

business located at City Hall, 520 Market Street, Camden, New Jersey.

6. Defendant, Victor Urban Renewal, LLC (“Victor Urban Renewal”), is a New

Jersey limited liability company with its principal place of business located at 1 Market Street,

Camden, New Jersey.

7. Defendant, Victor Associates, L.P. (“Victor Associates”), is a New Jersey limited

partnership and is the sole member of Victor Urban Renewal, with its principal place of business

located at 1 Market Street, Camden, New Jersey.

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8. Defendant, Victor GP Corp. (“Victor GP”), is a Pennsylvania corporation and is

the general partner of Victor Associates, with its principal place of business located at 755 South

Broad Street, Philadelphia, Pennsylvania.

9. Defendant, Dranoff Properties, Inc. (“Dranoff Properties”), is a Pennsylvania

corporation with its principal place of business located at 755 South Broad Street, Philadelphia,

Pennsylvania.

10. Defendant, Carl E. Dranoff (“Dranoff”) is a Pennsylvania resident who resides at

440 S. Broad Street, Philadelphia, Pennsylvania. Dranoff has an ownership interest and

management interest in Dranoff Properties and in Victor Urban Renewal, Victor Associates, and

Victor GP (collectively referred to as the “Victor Entities”).

11. Defendants, John Doe(s) 1-10, are unknown persons or entities who may have

acted in concert with the other defendants and/or caused damage to the City. The names of each

such other persons or entities are unknown to the City and, on diligent inquiry cannot be

ascertained, but all such persons or entities, if any, are made defendants to this action.

Victor Urban Renewal’s Proposal for the Redevelopment and Construction of the “Victor
Project” and Its 2001 Application for a Tax Exemption

12. On or around August 6, 2001, Dranoff, in his capacity as President of Victor

Urban Renewal, proposed to redevelop a blighted 4.7 acre area in the City’s downtown section,

referred to hereinafter as the “Victor Project.”

13. In connection with its redevelopment proposal for the Victor Project, Victor

Urban Renewal submitted an August 6, 2001 application (“August 2001 Application”)

requesting approval for a tax exemption under the Long Term Tax Exemption Law, N.J.S.A.

40A:20-1 et seq. (“Long Term Act”). The August 2001 Application is attached hereto as Exhibit

A.

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14. The August 2001 Application was signed by Dranoff in his capacity as President

of Victor Urban Renewal; in his capacity as a general partner of Victor Associates; and in his

capacity as President of Victor GP.

15. The August 2001 Application included a proposed “Financial Agreement”

between Victor Urban Renewal and the City.

16. Upon information and belief, the proposed Financial Agreement was drafted by

Dranoff and his representatives.

17. The proposed Financial Agreement, among other things, stated that if the City

granted the requested tax exemption, Victor Urban Renewal would be bound by the provisions of

the Long Term Act.

18. The Long Term Act permits New Jersey municipalities to enter into financial

agreements with an “urban renewal entity,” to facilitate redevelopment projects such as the

Victor Project.

19. The August 2001 Application represented that Victor Urban Renewal was a

qualified urban entity, as defined under the Long Term Act.

20. The proposed Financial Agreement further stated that, in the event the City

granted the requested tax exemption, Victor Urban Renewal would agree to: (a) limit its profits

and dividends arising from the Victor Project during the period of any tax exemption; (b) pay an

Annual Service Charge to the City in lieu of quarterly tax payments; (c) provide the City with

annual financial reports for the Victor Project and calculations of all amounts due under the

Financial Agreement; and (d) pay to the City any profits in excess of the net profits (“Excess Net

Profits”) that Victor Urban Renewal was allowed to accrue under the Long Term Act.

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21. Under the Long Term Act, redevelopers such as Victor Urban Renewal are

required to agree to limit their net profits and to pay Excess Net Profits to the municipality who

enters into the financial agreement with the redeveloper, in order to justify the tax exemption.

22. The August 2001 Application further attached Victor Urban Renewal’s Certificate

of Formation, which represented that Victor Urban Renewal consented to a limitation of its

profits and dividends in connection with the Victor Project, for the time period in which it

received the tax exemption.

23. The August 2001 Application referenced a purported ground lease between Victor

Urban Renewal and Victor Associates (“Ground Lease”), wherein Victor Associates would lease

the Victor Project from Victor Urban Renewal and would pay an annual amount of $1.33 Million

as base rent to Victor Urban Renewal.

24. The August 2001 Application did not include the form of the purported Ground

Lease or a summary of its material terms.

25. The August 2001 Application also did not disclose that Victor Urban Renewal

would be allocated 75% of the expenses of the Victor Project regardless of its share of revenues.

The 2002 Financial Agreement

26. On August 23, 2001, the City passed Resolution No. MC-01:651, which approved

Victor Urban Renewal’s August 2001 Application for a tax exemption and authorized the City

administration to enter into the proposed Financial Agreement.

27. As of August 23, 2001, the date on which Resolution No. MC-01:651 was passed,

neither Victor Urban Renewal, Victor Associates, Victor GP, nor Dranoff had provided the City

administration with a copy of the Ground Lease referenced in the August 2001 Application or a

summary of its material terms.

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28. On August 21, 2002, the City and Victor Urban Renewal executed the proposed

Financial Agreement that was included with the August 2001 Application. The fully executed

Financial Agreement is attached hereto as Exhibit B.

29. The Financial Agreement was also signed by Dranoff, in his various ownership

and management capacities as to Victor Urban Renewal, Victor Associates, and Victor GP.

30. The Financial Agreement provides it is “expressly understood and agreed that the

City relies upon the facts, data, and representations in the [August 2001] Application….”

31. The Financial Agreement states that it is governed by the terms and provisions of

the Long Term Act, and obligates Victor Urban Renewal, “[a]t all times prior to the expiration or

other termination of this Financial Agreement, to remain bound by the provisions of the Act.”

32. As of the August 21, 2002 effective date of the Financial Agreement, neither

Victor Urban Renewal, Victor Associates, Victor GP, nor Dranoff had provided the City with a

copy of the Ground Lease referenced in the August 2001 Application or a summary of its

material terms.

33. The Ground Lease was not signed by Victor Urban Renewal and Victor

Associates until October 17, 2002, over one (1) year after the City passed Resolution No. MC-

01:651 approving the August 2001 Application and two (2) months after the City signed the

Financial Agreement.

34. The City is not a party to the Ground Lease, nor did it receive or sign any

documents acknowledging the material terms of the Ground Lease including a provision that

governed the allocation of project expenses to Victor Urban Renewal.

35. Upon information and belief, Dranoff and the Victor Entities did not provide the

City with a copy of the Ground Lease until March 21, 2018.

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36. Pursuant to the Long Term Act, the Financial Agreement granted Victor Urban

Renewal a tax exemption from all real property comprising the Victor Project, for a term

commencing on August 21, 2002 and extending for a period not to exceed thirty-five (35) years.

37. In lieu of paying real estate and other taxes assessed against the Victor Project,

Victor Urban Renewal agreed to pay an annual service charge to the City (“Annual Service

Charge”).

38. For the first 15 years under the Financial Agreement the Annual Service Charge

was fixed at fifteen percent (15%) of its “Annual Gross Revenue”.

39. Under the Financial Agreement, Victor Urban Renewal’s “Annual Gross

Revenue” is deemed to be the $1.33 Million annual payment from Victor Associates pursuant to

the Ground Lease.

40. For the last 15 years under the Financial Agreement the Annual Service Charge is

the greater of 15% of Annual Gross Revenue or a fixed percentage of what real estate taxes

would have been had the Financial Agreement not been entered into by the parties.

41. For all years, the Financial Agreement further limits Victor Urban Renewal’s

allowable profits from the Victor Project, based on an “Allowable Profit Rate,” in accordance

with the Long Term Act.

42. Pursuant to the Financial Agreement and the Long Term Act, Victor Urban

Renewal’s Allowable Profit Rate is 1.25% above its interest rate payable on the initial mortgage

financing for the Victor Project.

43. Under the Financial Agreement and the Long Term Act, the Allowable Profit

Rate is applied to the “Total Project Cost” of the Victor Project, resulting in the Allowable Net

Profits for the Project.

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44. Pursuant to the Financial Agreement and the Long Term Act, in the event Victor

Urban Renewal’s Net Profits exceed its Allowable Net Profits, then Victor Urban Renewal is

obligated to pay the “Excess Net Profits” to the City.

45. Given the contractual and structural relationship between Victor Urban Renewal

and the other Victor Entities, any calculation of the Total Project Cost, Allowable Annual

Profits, Net Profits, and Excess Net Profits needs to include the income and costs allocated to the

other Victor Entities, in connection with the Victor Project.

46. Under the Financial Agreement, Victor Urban Renewal also agreed to the

following financial reporting and payment obligations:

a. To submit to the City annually, within ninety (90) days after the close of
each fiscal year, reports of income and costs related to the Victor Project,
as Certified by a Public Accountant;
b. To submit to the City annually, within one-hundred and twenty (120) days
after the close of each fiscal year, the calculation of all amounts due under
the Financial Agreement, as attested to by a Certified Public Accountant;
and
c. To pay to the City, within ninety (90) days after the end of each fiscal
year, any Excess Net Profits in accordance with the Long Term Act.

47. In light of the contractual and structural relationships between Victor Urban

Renewal and the other Victor Entities, these financial reporting obligations included an

obligation to report the annual income and costs as allocated to the other Victor Entities, in

connection with the Victor Project.

48. By its express language, and consistent with the Long Term Act, the Financial

Agreement distinguishes between Victor Urban Renewal’s obligations to pay: (a) an Annual

Service Charge to the City; and (b) Excess Net Profits to the City.

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49. Pursuant to Paragraph (9) of the Financial Agreement, in the event of Victor

Urban Renewal’s default or breach of the Agreement, the City may terminate the Agreement if

Victor Urban Renewal fails to cure the default or breach within ninety (90) days of its receipt of

a written demand by the City to do so.

50. Under Paragraph (9) of the Financial Agreement, all tax exemptions afforded to

the Victor Parties shall terminate upon the City’s termination of the Agreement.

51. On May 4, 2004, Victor Urban Renewal completed its construction of the Victor

Project.

52. Under the Financial Agreement, May 4, 2004 is the “Date of Completion of the

Victor Project,” triggering several of Victor Urban Renewal and/or the other Victor Entities’

payment and reporting obligations including, but not limited to, the obligations to: (a) pay the

Annual Service Charge to the City on a quarterly basis; (b) provide the City with annual reports

of income and costs related to the Victor Project; (c) provide the City with calculations of all

amounts due under the Financial Agreement; and (d) pay to the City, within ninety (90) days

after the end of each fiscal year, any Excess Net Profits.

53. Between May 4, 2004 and March 21, 2018, Victor Urban Renewal failed to

provide the City with any of the annual audited statement(s) or the annual calculation(s) of any

amount(s) due, as required under the Financial Agreement.

54. Between May 4, 2004 and September 21, 2018, Victor Urban Associates and

Victor GP failed to provide the City with any of the annual audited statement(s) or the annual

calculation(s) of any amount(s) due, as required under the Financial Agreement.

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Victor Urban Renewal’s Financial Statements Submitted in March 2018

55. Upon information and belief, the Victor Entities did not prepare any financial

statements for the Victor Project, as required under the Financial Agreement, until or around

March 2018.

56. On March 21, 2018, Victor Urban Renewal provided the City with an

“Independent Accountants’ Report,” dated March 19, 2018, which purported to contain Victor

Urban Renewal’s reports of income and costs pertaining to the Victor Project, for the years

ended December 31, 2002 through December 31, 2017 (“March 2018 Financial Statements”).

57. The March 21, 2018 correspondence accompanying the March 2018 Financial

Statements advised the City that, “[i]t has come to our attention that we may have been remiss in

filing the annual reports required under the Financial Agreement for the Victor [Project].”

58. The March 2018 Financial Statements were prepared by Mayer Hoffman McCann

P.C., of Plymouth Meeting, Pennsylvania (“Mayer Hoffman McCann”).

59. The March 2018 Financial Statements contain annual Operating Expenses,

Ground Lease Revenue, and Net Operating Income that is purportedly limited to Victor Urban

Renewal.

60. The March 2018 Financial Statements indicate that Victor Urban Renewal’s

“Total Operating Expenses” ranged from $586,657 to $713,335, between May 4, 2004 and

December 31, 2017.

61. Mayer Hoffman McCann’s calculation of Total Operating Expenses in the March

2018 Financial Statements was based on an allocation of Victor Urban Renewal’s “ratable share

of total operations,” in connection with the Victor Project.

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62. The March 2018 Financial Statements indicate that Victor Urban Renewal’s “Net

Operating Income” ranged from $294,410 to $765,192, between May 4, 2004 and December 31,

2017.

63. The March 2018 Financial Statements do not state whether Mayer Hoffman

McCann reviewed or was aware of the Ground Lease when it made any of the aforementioned

calculations.

64. Despite the Financial Agreement’s execution in August 2002 and the May 4, 2004

Date of Completion of the Victor Project, the March 2018 Financial Statements were the first of

any annual statements that Victor Urban Renewal provided to the City, as required by the

Financial Agreement.

65. Among its other deficiencies, the March 2018 Financial Statements did not

include any calculations of amounts due or of Excess Net Profits, as required by Paragraph (4) of

the Financial Agreement.

Victor Urban Renewal’s April 2018 Request for Consent to


Transfer the Financial Agreement

66. In or around April 2018 – only one (1) month after Victor Urban Renewal

provided the City with its first financial statements as required under the Financial Agreement –

Dranoff and his representatives contacted the City’s administration and requested that the City

consent to a transfer of the Financial Agreement from Victor Urban Renewal to Aimco One

Market Street Urban Renewal, LLC (“Aimco”).

67. Pursuant to Paragraph (6) of the Financial Agreement, any transfer of the

Financial Agreement is subject to the City’s approval.

68. Victor Urban Renewal took the position that it had satisfied all of its obligations

under the Financial Agreement.

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69. As a part of its review of Victor Urban Renewal’s request to transfer the Financial

Agreement to Aimco, the City requested all annual audited statements and all annual calculations

of amounts due in connection with the Victor Project, which were required pursuant to

Paragraph(s) 4(e) and 4(f) of the Financial Agreement.

The City’s Notice of Default to Victor Urban Renewal and Its Demand for Annual Audited
Statements and Annual Calculations of Amounts Due

70. On August 28, 2018, Michelle Banks Spearman, Esquire, the City Attorney, sent

correspondence to Dranoff and Victor Urban Renewal advising that Victor Urban Renewal had

failed to submit the required annual audited financial statements and annual calculations in

accordance with Paragraph (4) of the Financial Agreement.

71. The August 28, 2018 correspondence served as the City’s written Notice of

Default to Victor Urban Renewal, pursuant to Paragraph (9) of the Financial Agreement, stating

“[t]his letter is issued pursuant to paragraph 9 of the Financial Agreement to provide written

notice of the above breaches and defaults and to demand that the Redeveloper provide all

required reports and all required calculations for all years immediately.”

72. The City further “reserve[d] all of its rights and remedies under the Financial

Agreement and waive[d] no rights or remedies…includ[ing] the right to terminate the Financial

Agreement and the related tax exemption pursuant to paragraph 9 of the Financial Agreement if

the required reports and required calculations are not provided during the applicable cure period

as provided in the Financial Agreement.”

73. On August 30, 2018, counsel for Victor Urban Renewal sent correspondence to

the City Attorney, which enclosed the March 2018 Financial Statements, and claimed the March

2018 Financial Statements satisfied Victor Urban Renewal’s obligations under the Financial

Agreement.

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74. The August 30, 2018 correspondence failed to include any audited financial

statements and annual calculations that met the requirements of Paragraphs 4(e) and 4(f) of the

Financial Agreement.

75. On September 4, 2018, the City Attorney sent correspondence to Victor Urban

Renewal’s counsel advising the March 2018 Financial Statements are incomplete and inadequate

and, consequently, Victor Urban Renewal remained in default of the Financial Agreement and

the City would not withdraw its August 28, 2018 Notice of Default.

76. The City Attorney’s September 4, 2018 correspondence advised Victor Urban

Renewal that the March 2018 Financial Statements were inadequate because, inter alia, they: (1)

provided no calculation of potential excess net profits that are potentially payable to the City

pursuant to paragraph 4(b) of the Financial Agreement; and (2) provided no calculation of the

minimum Annual Service Charge as set forth in paragraph 3(e) of the Financial Agreement

which may affect the amount due the City under the Financial Agreement.

77. The September 4, 2018 correspondence further advised that the March 2018

Financial Statements merely summarized the income and costs associated with the Victor

Project, and failed to provide any detailed information as to the costs and operating expenses

claimed by Victor Urban Renewal.

78. Based on the aforementioned deficiencies in the March 2018 Financial

Statements, the City was unable to confirm whether Victor Urban Renewal or any of the Victor

Entities had accrued and withheld Excess Net Profits from the City.

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Victor Urban Renewal’s September 6, 2018 Corrected Financial Statements

79. On September 7, 2018, Victor Urban Renewal’s counsel provided the City

Attorney with “corrected” Financial Statements dated September 6, 2018 pertaining to the Victor

Project, for the years ended December 31, 2002 and December 31, 2017 (“Corrected Financial

Statements”).

80. The September 7, 2018 correspondence included a copy of the signed Ground

Lease between Victor Urban Renewal and Victor Associates which, upon information and belief,

is the first time the City received a copy of the Ground Lease from Dranoff or the Victor Entities.

A copy of the executed Ground Lease is attached hereto as Exhibit C.

81. The Corrected Financial Statements were also prepared by Mayer Hoffman

McCann.

82. The Corrected Financial Statements notified the City, for the first time, that Victor

Urban Renewal and Victor Associates “are under common control and ownership and have

consolidated annual financial statements prepared annually in accordance with [US GAAP].”

83. In its September 7, 2018 correspondence enclosing the Corrected Financial

Statements, Victor Urban Renewal’s counsel advised, “we have come to understand the

Financial Statements submitted to the City by Victor [on] March 21, 2018…understated the

actual Operating Expenses.”

84. The September 7, 2018 correspondence represents that “Victor has never realized

any net profits” in connection with the Victor Project.

85. In clear contradiction of the express terms of the Financial Agreement and the

Long Term Act, the September 7, 2018 correspondence further asserts, for the first time, that

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Victor Urban Renewal’s “sole financial obligations” to the City are “to make payment of the

Annual Service Charge.”

86. The September 7, 2018 correspondence further explained the need to correct the

March 2018 Financial Statements and advised, “the statements of income and costs were restated

for the years ended December 31, 2004 through 2017 to correct an error in the allocation of

operating expenses to Victor Urban Renewal Group, LLC….Our report originally dated March

19, 2018 should therefore not be relied upon.”

87. The allegedly required “restatement” of Operating Expenses was based on the

allocation to Victor Urban Renewal of seventy-five percent (75%) of operating expenses

incurred by Victor Associates, and was based entirely on the terms of the Ground Lease.

88. Neither Victor Urban Renewal’s August 2001 Application nor the Financial

Agreement disclosed to the City that the Ground Lease would provide for a seventy-five percent

(75%) allocation of expenses to Victor Urban Renewal, regardless of its share of income in the

Victor Project.

89. Instead, the August 2001 Application stated: “As outlined above, Applicant

[Victor Urban Renewal] is entering into a Ground Lease with [Victor Associates] for the

Project….Therefore, the overwhelming majority of expenses, costs, and income for the

construction and operation of the Project will be borne by Victor Associates.”

90. The Corrected Financial Statements revealed substantially higher Total Operating

Expenses in comparison with the March 2018 Financial Statements, ranging from $1,551,805 to

$1,930,362 between May 4, 2004 and December 31, 2017.The Corrected Financial Statements

also contained new line items for “Operating Losses,” “Operating Expenses in Excess of Ground

Lease Revenue,” and “Profit from Operations.”

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91. According to the Corrected Financial Statements, Victor Urban Renewal’s

Operating Losses were equal to the “Operating Expenses in Excess of Ground Lease Revenue,”

which resulted in $0.00 of “Profit from Operations” for each fiscal year between May 4, 2004

and December 31, 2017.

92. Mayer Hoffman McCann further represented that “[t]his restatement did not

impact the calculation of annual service charges and net amounts due to the City.”

93. When drafting the March 2018 Financial Statements and the Corrected Financial

Statements, Mayer Hoffman McCann relied upon two entirely different sets of numbers to

calculate and state Victor Urban Renewal’s Operating Expenses.

The Consolidated Financial Statements Submitted on September 20, 2018

94. Due to deficiencies in the financial information submitted in the March 20, 2018

Financial Statements and in the Corrected Financial Statements the City demanded annual audit

reports and calculations from Victor Associates and Victor GP, for each fiscal year between the

May 4, 2004 Date of Completion of the Victor Project and December 31, 2017.

95. On September 20, 2018, Victor Urban Renewal provided the City with

Consolidated Financial Statements for Victor Urban Renewal, Victor Associates, and Victor GP,

pertaining to the Victor Project (“Consolidated Financial Statements”).

96. The Consolidated Financial Statements included the following financial

summaries:

a. Consolidated Financial Statements and Independent Auditors’ Report for


Victor Associates and Its Wholly Owned Subsidiaries for the Years Ended
December 31, 2004 through December 31, 2011, prepared by Reznick
Group P.C.;

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b. Consolidated Financial Statements for Victor Associates and Victor


Limited Partner for the Years Ended December 31, 2012 through
December 31, 2017, prepared by Mayer Hoffman McCann P.C.; and
c. Reports and Calculations of Net Profits and Excess Net Profits for the
Years Ended December 31, 2004 through December 31, 2017, prepared by
Mayer Hoffman McCann P.C. on or about September 20, 2018.
97. In disregard of the Financial Agreement, the Consolidated Financial Statements

failed to apply the statutory definition of “Net Profits” under the Long Term Act.

98. The Consolidated Financial Statements further failed to treat Victor Urban

Renewal’s Allowed Net Profits as a cumulative amount for all years under the Financial

Agreement, which is required under the Financial Agreement and the Long Term Act.

The 2002 Option Agreement between the City of Camden Redevelopment Agency and
Dranoff Properties, Inc.

99. The CRA is the owner of property known as Block 72, Lots 1 and 28 of the City

of Camden tax map. A building located on this property was previously used by the RCA

Corporation for the manufacturing of RCA products. This property is referred to in this

complaint as the “Radio Lofts Property.” The Radio Lofts Property requires environmental

remediation in order to establish a new use.

100. The City of Camden has designated the CRA as its redevelopment entity for

purposes of carrying out redevelopment projects in the City of Camden pursuant to the Local

Redevelopment and Housing Law, 40A: 12A-1 et seq.

101. In an effort to redevelop the Radio Lofts Property, on August 20, 2002, the CRA

and Dranoff Properties entered into an Option Agreement (“Option”), which provided Dranoff

Properties with an option to enter into a redevelopment agreement for the purchase and

redevelopment of the Radio Lofts Property.

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102. The Option set a deadline for Dranoff Properties to exercise the option and if

exercised by the deadline the parties would diligently and in good faith work to negotiate and

enter into a redevelopment agreement for the redevelopment of the property into residential

units.

103. The Option provided for the Radio Lofts Property to be conveyed in its “as is

condition” but did not require Dranoff to take title and proceed with the project unless the

required remediation was completed. The Option imposed no obligation on the CRA to complete

remediation on the Radio Lofts Property or to use its own funds to remediate the property. The

Option states that “[t]ime is of the essence in this Agreement and as to the obligations of the

Redeveloper [Dranoff Properties] to perform hereunder….”

104. The Option further provides that it shall expire and become null and void the later

of December 31, 2004 or 24 months after the Redeveloper (or its affiliate) takes title to the

Nipper property.

105. Dranoff Properties provided notice that it was exercising the option under the

Option within the time required by the Option. Dranoff Properties, however, failed to execute a

redevelopment agreement for the project as required by the Option. On or about January 28,

2005, the CRA and Dranoff Properties executed a Project Management Agreement authorizing

Dranoff Properties to perform remediation work on the Radio Lofts Property with funds obtained

by the CRA through various grants. Dranoff was paid a fee for these services out of grant funds

obtained by the CRA.

106. The Project Management Agreement did not require CRA to remediate the Radio

Lofts Property with its own funds but only to attempt to obtain grant funds to complete the work.

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107. The Project Management Agreement included a term of three years and expired

on January 28, 2008.

108. Substantial environmental remediation was completed on the Radio Lofts

Property with grant funds obtained by CRA but all remediation work ceased as of October 2010.

109. The reason why remediation work came to a close was because the estimated cost

of completing the remediation work for a residential use was at least one million dollars more

than grant funds available for the required work.

110. In 2013, the State of New Jersey adopted the Economic Opportunity Act, which

provided tax incentives to developers for the construction or reconstruction of property, with the

goal of bringing jobs to urban municipalities such as the City.

111. The financial incentives provided to projects in the City in the City of Camden

under the Economic Opportunity Act are far greater than the incentives available to other

municipalities. The Economic Opportunity Act might provide incentives for a new developer to

develop the Radio Lofts Property with a non-residential use.

112. As of April 20, 2018 neither Dranoff Properties nor the CRA had been able to

locate additional grant funds sufficient to complete the remediation of the Radio Lofts Property

for a residential use and Dranoff Properties never indicated any willingness to use its own funds

to complete the needed remediation. As of April 20, 2018, a residential project at the Radio Lofts

Property site was not close to completion and Dranoff Properties had still not executed a

redevelopment agreement for the Radio Lofts Property even though more than sixteen (16) years

had passed since the parties’ execution of the Option and ten (10) years had passed since the

expiration of the Project Management Agreement.

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113. On April 20, 2018, the CRA sent a formal Notice of Termination to Dranoff

Properties terminating all rights that Dranoff Properties had under the Option and in the Radio

Lofts Property. The notice of termination was needed so that the CRA could move forward to

procure a new developer for the Radio Lofts Property for a non-residential use. Under the

Option, Dranoff Properties only had a right to develop the Radio Lofts Property for a residential

use and had no right to develop the property for a non-residential use.

114. The Notice of Termination terminated any rights that Dranoff Properties obtained

through the exercise of the Option and terminated any right Dranoff Properties had to redevelop

the Radio Lofts Property.

115. By correspondence date June 8, 2018, counsel for Dranoff Properties refuted

CRA’s right to terminate the rights of Dranoff Properties to the Radio Lofts Property and

Dranoff Properties continues to assert the right to develop the Radio Lofts Property

notwithstanding the CRA’s Notice of Termination.

116. Since April 2018, Dranoff – who has a direct financial interest in Victor Urban

Renewal’s proposed sale of the Victor Project to Aimco – has effectively exploited the Radio

Lofts Property as leverage to pressure the City into consenting to the transfer of the Financial

Agreement to Aimco.

FIRST COUNT

(Breach of Contract: the Victor Entities’ Failure to Submit Annual Reports of Income and
Costs for the Victor Project under the Financial Agreement)

117. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

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118. Pursuant to the Financial Agreement, the Victor Entities, individually and/or

collectively, were required to submit annual reports of income and costs related to the Victor

Project, as certified by a Certified Public Accountant.

119. As defined in the Financial Agreement, May 4, 2004 is the “Date of Completion

of the Victor Project,” triggering the Victor Entities’ contractual obligations to submit to the City

their annual reports of income and costs related to the Victor Project.

120. Between May 4, 2004 and March 21, 2018, Victor Urban Renewal failed to

provide the City with any of the annual reports of income and costs as required by Paragraph

4(e) of the Financial Agreement.

121. Between May 4, 2004 and September 20, 2018, Victor Urban Associates and

Victor GP failed to provide the City with any of the annual reports of income and costs as

required by Paragraph 4(e) of the Financial Agreement.

122. The March 2018 Financial Statements and the Consolidated Financial Statements

submitted in September 2018 by Victor Urban Renewal and Victor Associates, respectively,

failed to provide pertinent information as to the Total Project Cost and the Victor Entities’

Allowable Profit Rate and Net Profits from the Victor Project.

123. By failing to provide the City with the annual audited statements related to the

Victor Project, and by providing the City with incomplete financial statements long after they

were due, Victor Urban Renewal and the related Victor Entities deprived the City of critical

financial information for over fourteen (14) years, which prevented the City from discovering it

was entitled to millions of dollars in revenue from Victor Urban Renewal and the other Victor

Entities’ Excess Net Profits, in connection with the Victor Project.

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WHEREFORE, the City demands judgment against Victor Urban Renewal and the other

Victor Entities awarding compensatory damages, costs of suit, attorneys’ fees, punitive damages,

and such other relief as the Court deems just.

SECOND COUNT

(Breach of Contract: the Victor Entities’ Failure to Submit Annual Calculations of All
Amounts Due under the Financial Agreement)

124. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

125. Pursuant to the Financial Agreement, the Victor Entities, individually and/or

collectively, were required to submit annual calculations of all amounts due to the City under the

Financial Agreement, as attested by a Certified Public Accountant.

126. As defined in the Financial Agreement, May 4, 2004 is the “Date of Completion

of the Victor Project,” triggering the Victor Entities’ obligations to provide the City with their

annual calculations of all amounts due under the Financial Agreement.

127. Between May 4, 2004 and March 21, 2018, Victor Urban Renewal failed to

provide the City with any of the annual calculation(s) of any amount(s) due, as required by

Paragraph 4(f) of the Financial Agreement.

128. Between May 4, 2004 and September 20, 2018, Victor Urban Associates and

Victor GP failed to provide the City with any of the annual calculation(s) of any amount(s) due,

as required by Paragraph 4(f) of the Financial Agreement.

129. By failing to provide the City with the annual calculations of amounts due in

connection with the Victor Project, Victor Urban Renewal and the related Victor Entities

deprived the City of critical financial information for over fourteen (14) years, which prevented

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the City from discovering it was entitled to millions of dollars in revenue from Victor Urban

Renewal and the other Victor Entities’ Excess Net Profits, in connection with the Victor Project.

WHEREFORE, the City demands judgment against Victor Urban Renewal awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages, and such other relief as

the Court deems just.

THIRD COUNT

(Breach of Contract: the Victor Entities’ Failure to Pay Excess Net Profits to the City
under the Financial Agreement)

130. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

131. Pursuant to the Financial Agreement, the Victor Entities, individually and/or

collectively, agreed to be subject to a limitation of profits arising from the Victor Project, in

accordance with the Long Term Act.

132. In accordance with the agreed upon limitation of profits, Paragraphs 4(b) and 4(k)

of the Financial Agreement obligated the Victor Entities, individually and/or collectively, to pay

any Excess Net Profits to the City during each fiscal year.

133. As defined in the Financial Agreement, May 4, 2004 is the “Date of Completion

of the Victor Project,” which commenced the first fiscal year in which the Victor Entities were

obligated to pay any Excess Net Profits to the City.

134. Between May 4, 2004 and December 31, 2017, Victor Urban Renewal and the

other Victor Entities, individually and/or collectively, realized substantial Net Profits that

exceeded the Allowable Net Profits, resulting in millions of dollars in Excess Net Profits.

135. Between May 4, 2004 and the present date, Victor Urban Renewal and the other

Victor Entities have failed to pay any Excess Net Profits to the City.

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WHEREFORE, the City demands judgment against Victor Urban Renewal awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages, and such other relief as

the Court deems just.

FOURTH COUNT

(Breach of Contract: the Victor Entities’ Failure to Comply with the Long Term Act’s
Definitions of “Net Profit, Allowable Profit Rate, and Total Project Cost”
under the Financial Agreement)

136. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

137. The Financial Agreement is governed by the terms and provisions of the Long

Term Act, and obligates Victor Urban Renewal, “[a]t all times prior to the expiration or other

termination of this Financial Agreement, to remain bound by the provisions of the Act.”

138. The Long Term Act sets forth express definitions for, inter alia, “Net Profit,”

“Allowable Profit Rate,” and “Total Project Cost.”

139. The aforesaid terms must be applied in accordance with their statutory definitions,

in order to accurately calculate Excess Net Profits under the Financial Agreement.

140. The Consolidated Financial Statements do not apply the Long Term Act’s

definition of “Net Profits,” and impermissibly included certain expenses and costs in the Victor

Entities’ Net Profits calculations and thereby wrongfully understated Net Profits.

141. The Consolidated Financial Statements further fail to apply the correct calculation

of Allowable Net Profits, as they disregard the Act’s requirement that Excess Net Profits be

treated as one cumulative amount that applies over the lifetime of the Financial Agreement.

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142. In accordance with the limitation of profits, Victor Urban Renewal agreed to pay

to the City any profits in excess of the net profits permitted under the Financial Agreement and

the New Jersey Long Term Tax Exemption Law.

143. Under the Financial Agreement, May 4, 2004 is the “Date of Completion of the

Victor Project,” which commenced the first fiscal year in which the Victor Entities’ were

obligated to pay any Excess Net Profits to the City.

144. By failing to apply the Long Term Act’s definitions of pertinent terms, the Victor

Entities prevented the City from assessing whether the Excess Net Profits calculations were

accurate, which further prevented the City from discovering it was entitled to millions of Excess

Net Profits from Victor Urban Renewal and the other Victor Entities’ in connection with the

Victor Project.

WHEREFORE, the City demands judgment against the Victor Entities awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages, and such other relief as

the Court deems just.

FIFTH COUNT

(Declaratory Judgment that Victor Urban Renewal Failed to Timely Cure


Its Default of the Financial Agreement, pursuant to the Uniform Declaratory Judgments
Law, N.J.S.A. 2A:16-50, et seq.)

145. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

146. Under the Financial Agreement, Victor Urban Renewal agreed to the following

financial reporting and payment obligations: (a) to submit to the City annually, within ninety

(90) days after the close of each fiscal year, reports of income and costs related to the Victor

Project, as certified by a Public Accountant; (b) to submit to the City annually, within one-

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hundred and twenty (120) days after the close of each fiscal year, a calculation of all amounts

due under the Financial Agreement, as attested to by a Certified Public Accountant; and (c) to

pay to the City, within ninety (90) days after the end of each fiscal year, any Excess Net Profits

in accordance with N.J.S.A. 40A:2016.

147. Pursuant to the Financial Agreement and the Long Term Act, in the event Victor

Urban Renewal’s Net Profits exceed its Allowable Net Profits – after applying the Allowable

Profit Rate to the Total Project Cost – Victor was obligated to pay its Excess Net Profits to the

City.

148. Between May 4, 2004 and March 21, 2018, Victor Urban Renewal failed to

provide the City with any of the annual calculation(s) of any amount(s) due, as required under

Paragraph 4(f) of the Financial Agreement.

149. The March 2018 Financial Statements submitted by Victor Urban Renewal lacked

pertinent information and did not include any calculations of Excess Net Profits pursuant to

Paragraph 4(e) of the Financial Agreement or any calculations of any amount(s) due to the City

pursuant to Paragraph 4(f) of the Financial Agreement.

150. On August 28, 2018, Michelle Banks Spearman, Esquire, the City Attorney, sent

correspondence to Dranoff and Victor Urban Renewal advising that Victor Urban Renewal has

failed to submit the required annual audited financial statements and annual calculations in

accordance with Paragraphs 4(e) and 4(f) of the Financial Agreement.

151. The August 28, 2018 correspondence served as the City’s written Notice of

Default to Victor Urban Renewal, pursuant to Paragraph (9) of the Financial Agreement.

152. The September 2018 Corrected Financial Statements and the Consolidated

Financial Statements lacked required information and were otherwise deficient, as they, inter

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alia, failed to apply the Long Term Act’s definition of “Net Profits,”; impermissibly deducted

certain expenses and costs from the Victor Entities’ Net Profits calculations; failed to apply the

correct calculation of Allowable Net Profits; disregarded the Act’s requirement that Excess Net

Profits be treated as one cumulative amount that applies over the lifetime of the Financial

Agreement; and applied inconsistent calculations of operating expenses when calculating the

Total Project Cost between May 4, 2004 and December 31, 2017.

153. The September 2018 Corrected Financial Statements and the Consolidated

Financial Statements failed to cure the multiple deficiencies set forth in the City’s August 28,

2018 Notice of Default.

154. Since its receipt of the written Notice of Default on August 28, 2018, Victor

Urban Renewal has failed to cure its default(s) of the Financial Agreement within ninety (90)

days of its receipt of the City’s Notice of Default.

155. Pursuant to Paragraph (9) of the Financial Agreement, in the event of the Victor

Parties’ default or breach of the Agreement, the City may terminate the Agreement if the Victor

Parties fail to cure the default or breach within ninety (90) days of their receipt of a written

demand by the City to do so.

156. The City’s right to terminate the Financial Agreement is subject to providing a

Mortgagee of Victor Urban Renewal holding any Mortgage Loan in connection with the Victor

Project, if any, with a “reasonable opportunity,” not to exceed fifteen (15) days, to cure said

default(s) and to assume the position of Victor Urban Renewal under the Financial Agreement.

157. On information and belief all Mortgage Loans on the property have been paid in

full.

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158. The City has not waived the aforesaid default(s) of the Financial Agreement, and

has instead consistently maintained its rights to obtain all relief under the Financial Agreement,

in the event that Victor Urban Renewal fails to timely cure its defaults of the Agreement.

159. Pursuant to the Uniform Declaratory Judgments Law, N.J.S.A. 2A:16-50, et seq.,

the City is entitled to a declaration of its rights based on Victor Urban Renewal’s failure to cure

its multiple defaults of the Financial Agreement.

WHEREFORE, the City respectfully seeks judgment: (1) declaring that Victor Urban

Renewal has defaulted under the Financial Agreement, in the manner(s) set forth above; (2) that

Victor Urban Renewal has failed to cure its multiple defaults of the Financial Agreement within

ninety (90) days of receiving the City’s Notice of Default; (3) that the City has a contractual and

legal right to terminate the Financial Agreement if it elects to do so; and (4) if the City does

terminate the Financial Agreement, upon the City’s termination of the Financial Agreement, any

tax exemptions provided to Victor Urban Renewal by the Financial Agreement shall also be

immediately terminated. The City further demands compensatory damages, costs of suit,

attorneys’ fees, punitive damages, and such other relief as the Court deems just.

SIXTH COUNT

(Fraud in the Inducement Committed by Victor Urban Renewal)

160. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

161. In its proposals to the City and related requests for a tax exemption in connection

with the Long Term Act, leading up to the parties’ execution of the Financial Agreement, Victor

Urban Renewal made representations to the City that it would agree to limit its profits in

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connection with the Victor Project and would further pay to the City any Excess Net Profits

realized in any fiscal year subsequent to the Completion Date of the Victor Project.

162. In making these representations, Victor Urban Renewal effectively persuaded the

City to grant a tax exemption to Victor Urban Renewal pursuant to the Long Term Act and to

enter into the Financial Agreement.

163. The Financial Agreement provides it is “expressly understood and agreed that the

City relies upon the facts, data, and representations in the [August 2001] Application….”

164. The representations by Victor Urban Renewal as to its obligation to limit profits,

provide annual financial reports and calculations, and pay Excess Net Profits to the City were

false.

165. Victor Urban Renewal’s failure to provide any annual audit statements and annual

calculations of amounts due under the Financial Agreement evidences its lack of intent to pay

any Excess Net Profits to the City in the manner it described prior to entering into the Financial

Agreement.

166. The City justifiably and reasonably relied upon Victor Urban Renewal’s

representations in agreeing to grant Victor Urban Renewal’s August 2001 Application for a tax

exemption under the Long Term Act.

167. In relying upon Victor Urban Renewal’s representations, the City was

fraudulently and detrimentally induced into granting a tax exemption for the Victor Project and

to enter into the Financial Agreement.

168. Victor Urban Renewal’s fraudulent inducement has deprived the City of millions

of dollars in revenue from Victor Urban Renewal and the other Victor Entities’ Excess Net

Profits, in connection with the Victor Project.

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WHEREFORE, the City demands judgment against Victor Urban Renewal awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages and such other relief as

the Court deems just.

SEVENTH COUNT

(Fraud Committed by Victor Urban Renewal)

169. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

170. Through its August 2001 Application and by entering into the Financial

Agreement, Victor Urban Renewal falsely represented that it would limit its profits and pay any

Excess Net Profits to the City.

171. These misrepresentations involved facts material to the City’s decision to grant

the tax exemption for the Victor Project and its decision to enter into the Financial Agreement.

172. Victor Urban Renewal knowingly made these false representations to the City

with the intent to mislead the City into granting the tax exemption for the Victor Project and

entering into the Financial Agreement.

173. The City justifiably relied upon Victor Urban Renewal’s misrepresentations when

it granted the tax exemption for the Victor Project and entered into the Financial Agreement.

174. The City has been damaged as a result of Victor Urban Renewal’s continuous,

intentionally false, and misleading misrepresentations, and has been deprived of millions of

dollars in revenue from Victor Urban Renewal and the other Victor Entities’ Excess Net Profits,

in connection with the Victor Project.

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WHEREFORE, the City demands judgment against Victor Urban Renewal awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages and such other relief as

the Court deems just.

EIGHTH COUNT

(Misrepresentation Committed by Victor Urban Renewal)

175. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

176. The statements, actions, and covenants of Victor Urban Renewal in its August

2001 Application, during its negotiations with the City, and in the formation of the Financial

Agreement, as described herein, constitute misrepresentations.

177. Victor Urban Renewal’s misrepresentations, upon which the City reasonably

relied, have caused the City to suffer significant financial losses and other damages.

WHEREFORE, the City demands judgment against the Victor Entities awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages and such other relief as

the Court deems just.

NINTH COUNT

(Breach of Implied Covenant of Good Faith and Fair Dealing by the Victor Entities)

178. The City and the CRA hereby repeat and incorporates the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

179. The City and Victor Urban Renewal entered into the Financial Agreement and

agreed to its terms with an implied covenant of good faith and fair dealing.

180. Each of the Victor Entities had an obligation to the City to act in good faith and

fair dealing, given their contractual and structural relationship as pertaining to the Victor Project.

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181. The actions and failures to take action by Victor Entities as described herein

constitute a material breach of the implied covenant of good faith and fair dealing.

182. The actions of the Victor Entities and their material breach of the implied

covenant of good faith and fair dealing have proximately caused the City to suffer significant

financial losses and other damages.

WHEREFORE, the City demands judgment against the Victor Entities awarding

compensatory damages, costs of suit, attorneys’ fees, punitive damages and such other relief as

the Court deems just.

TENTH COUNT

(Unjust Enrichment against Victor Associates LP and Victor GP Corp.)

183. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

184. Between May 4, 2004 and September 21, 2018, Victor Urban Associates and

Victor GP failed to provide the City with any of the annual audited statement(s) or the annual

calculation(s) of any amount(s) due as to the Victor Project, as required under the Financial

Agreement.

185. During that time period, Victor Urban Associates and Victor GP withheld Excess

Net Profits, to which the City is entitled pursuant to the Financial Agreement.

186. The actions of Victor Urban Associates and Victor GP as described herein and the

substantial profits they have reaped constitute an unjust enrichment to the City’s detriment.

187. Considering the facts and circumstances related to Victor Urban Renewal, Victor

Associates, and Victor GP’s conduct, including but not limited to the misrepresentations made to

the City, the failures to provide annual financial reports and calculations, and the attempt to

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withhold Excess Net Profits to which the City is entitled, it would be unjust, unfair and

inequitable to permit Victor Urban Associates and Victor GP to retain the benefits and profits

they have reaped under auspices of the Financial Agreement.

WHEREFORE, the City demands judgment against Victor Associates and Victor GP

awarding compensatory damages, costs of suit, attorneys’ fees, punitive damages and such other

relief as the Court deems just.

ELEVENTH COUNT

(Civil Conspiracy against Dranoff and the Victor Entities)

188. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

189. Each of the Victor Entities was directly involved in the submission of the August

2001 Application to the City and in presenting the terms of the Financial Agreement to the City.

190. Between the date the August 2001 Application was submitted and September 7,

2018, none of the Victor Entities provided a copy of the Ground Lease to the City, or a summary

of its material terms.

191. Between May 4, 2004 and March 21, 2018, Victor Urban Renewal failed to

provide the City with any of the annual audited statement(s) or the annual calculation(s) of any

amount(s) due, as required under the Financial Agreement.

192. Between May 4, 2004 and September 21, 2018, Victor Urban Associates and

Victor GP failed to provide the City with any of the annual audited statement(s) or the annual

calculation(s) of any amount(s) due, as required under the Financial Agreement.

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193. Between May 4, 2004 and December 31, 2017, the Victor Entities realized

substantial Net Profits that exceeded the Allowable Net Profits, resulting in millions of dollars in

Excess Net Profits.

194. Between May 4, 2004 and the present date, Victor Urban Renewal and the other

Victor Entities failed to pay any Excess Net Profits to the City.

195. The common thread linking each of the Victor Entities is Dranoff, who made

representations on behalf of each entity when inducing the City to enter into the Financial

Agreement.

196. Through Dranoff’s direction, an agreement between the Victor Entities arose, in

which each entity acted in concert for over fifteen (15) years, in an effort to deprive the City of

millions of dollars in revenue and Excess Net Profits, to which it was contractually and legally

entitled.

197. The aforementioned agreement between the Victor Entities is further evidenced

through the inexplicably inconsistent March 2018 Financial Statements, September 2018

Corrected Financial Statements, and Consolidated Financial Statements submitted on September

20, 2018 each of which arbitrarily apportions unsupported costs and income between the Victor

Entities, in an effort to avoid any payment of Excess Net Profits to the City.

198. The March 2018 Financial Statements, September 2018 Corrected Financial

Statements, and Consolidated Financial Statements submitted on September 20, 2018 (some)

were prepared by the Victor Entities’ common accounting firm: Mayer Hoffman McCann.

199. The concerted efforts to commit the above unlawful acts, including the

aforementioned fraud, fraud in the inducement, misrepresentation, and breach(es) of the

Financial Agreement, arise from an apparent agreement between the Victor Entities in which an

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agreement was reached to deliberately cause financial harm to the City by failing to disclose

Excess Net Profits and withholding millions of dollars in Excess Net Profits through the term of

the Financial Agreement.

WHEREFORE, the City demands judgment against Dranoff and the Victor Entities

awarding compensatory damages, costs of suit, attorneys’ fees, punitive damages and such other

relief as the Court deems just.

TWELFTH COUNT

(Civil Conspiracy against Dranoff, the Victor Entities, and Dranoff Properties)

200. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

201. Dranoff has an ownership and/or management role in each of the Victor Entities

and in Dranoff Properties.

202. Dranoff had a direct financial interest in obtaining the City’s consent to transfer

the Financial Agreement, in connection with Victor Urban Renewal’s sale of the Victor Project

to Aimco.

203. During the term of its Option with the CRA, Dranoff Properties sat on its

redevelopment rights as to the Radio Lofts Property, and has not taken any meaningful efforts to

redevelop the Property since 2010.

204. Based on Dranoff Properties’ failures to perform under the Option, the CRA

exercised its clear contractual right to terminate the Option in April 2018.

205. In or around April 2018, Dranoff and Victor Urban Renewal approached the City

with a request for consent to transfer the Financial Agreement, in order to effectuate the sale of

the Victor Project to Aimco.

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206. Between April 2018 and the present, the City exercised its lawful and contractual

right to review the proposed transfer and sale, and to demand that Victor Urban Renewal and the

other Victor Entities comply with their obligations to provide annual reports of income and costs

and annual calculations, in connection with the Victor Project.

207. In April 2018 and at all relevant times, Dranoff and the Victor Entities understood

at all times that, if forced to provide true and accurate financial reports and calculations in

connection with the Victor Project, the City would become aware of the Victor Entities’ accrual

and failure to provide Excess Net Profits for the last fifteen (15) years.

208. In April 2018 and at all relevant times, to avoid payment of the Victor Entities’

Excess Net Profits to the City, Dranoff and Dranoff Properties exploited the Radio Lofts

Property by refusing to acknowledge the termination of their redevelopment rights under the

Option.

209. Dranoff and Dranoff Properties have attempted to maintain control over the Radio

Lofts Property, in an effort to block the CRA from exercising its rights as to the Radio Lofts

Property and to force the City to consent to the transfer of the Financial Agreement from Victor

Urban Renewal to Aimco and to waive its rights to payment of the Excess Net Profits from the

Victor Entities.

210. In other words, on behalf of the Victor Entities, Dranoff Properties has effectively

held the City and the CRA hostage until Victor Urban Renewal receives consent to transfer the

Financial Agreement to Aimco.

211. This agreement between the Victor Entities and Dranoff Properties is further

evidenced through the suggestive timing between the March 2018 Financial Statements being

provided to the City; Victor Urban Renewal’s April 2018 request for consent to transfer the

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Financial Agreement; the inconsistent March 2018 Financial Statements, September 2018

Corrected Financial Statements, and Consolidated Financial Statements submitted on September

20, 2018; and Dranoff’s April 2018 refusal to recognize the CRA’s well-established rights as to

the Radio Lofts Property under the Option.

212. The concerted efforts to commit the above unlawful acts, including fraud and

breach(es) of the Financial Agreement and the Option, arise from an agreement between the

Victor Entities and Dranoff Properties, which was facilitated through their common

owner/manager: Dranoff.

WHEREFORE, the City and the CRA demand judgment against Dranoff, the Victor

Entities, and Dranoff Properties awarding compensatory damages, costs of suit, attorneys’ fees,

punitive damages and such other relief as the Court deems just.

THIRTEENTH COUNT

(Declaratory Judgment that Dranoff Properties’ Rights as to the Radio Lofts Property and
the Option Agreement Have Been Rightfully Terminated
by the Camden Redevelopment Agency)

213. The City and the CRA hereby repeat and incorporate the allegations set forth in

the preceding paragraphs of the Complaint as if fully set forth at length herein.

214. The CRA performed all the obligations it owed to Dranoff Properties under the

Option and under the Project Management Agreement. The CRA had the right to terminate

Dranoff Properties’ rights under the Option and its rights in the Radio Lofts Property inter alia

because a redevelopment agreement was never executed by Dranoff Properties for the project,

because a residential project was not close to completion more than sixteen (16) years after the

parties’ executed the Option and ten (10) years after the expiration of the Project Management

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Agreement and because a residential project has become impossible due to more than a one

million dollar gap in grant funding needed to complete a residential project at the property.

215. The CRA’s notice of termination dated April 20, 2018 effectively terminated all

of Dranoff Properties right under the Option and in the Radio Lofts Property.

WHEREFORE, the City respectfully seeks judgment against Dranoff Properties: (1)

declaring that the rights of Dranoff Properties under the Option, the Project Management

Agreement and/or to redevelop the Radio Lofts Property have been effectively terminated by the

CRA and that Dranoff Properties has no further rights under such agreements or in the Radio

Lofts Property; (2 for compensatory damages, costs of suit, attorneys’ fees, punitive damages,

and such other relief as the Court deems just.

BROWN & CONNERY, LLP


Attorneys for Plaintiffs, the City of Camden
and the City of Camden Redevelopment
Agency

s/William M. Tambussi
William M. Tambussi, Esquire
Dated: December 10, 2018

RESERVATION OF RIGHTS

Plaintiffs, the City of Camden and the City of Camden Redevelopment Agency, reserves

the right prior to, at, or after trial, to amend their Complaint to add any statements and/or claims

in this matter.

DEMAND FOR JURY TRIAL

Plaintiffs, the City of Camden and the City of Camden Redevelopment Agency, hereby

demand a trial by jury as to all issues pursuant to R. 4:35-1(a).

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DESIGNATION OF TRIAL ATTORNEY

William M. Tambussi, Esquire is hereby designated as trial counsel for Plaintiffs, the

City of Camden and the Camden Redevelopment Agency.

BROWN & CONNERY, LLP


Attorneys for Plaintiffs, the City of Camden
and the City of Camden Redevelopment
Agency

s/William M. Tambussi
William M. Tambussi, Esquire
Dated: December 10, 2018

R. 4:5-1 CERTIFICATION

I, William M. Tambussi, Esquire, do hereby certify as follows:

1. To the best of my knowledge, the Financial Agreement, Option Agreement, and

related facts at issue in this litigation are the subject of the following action: Victor Urban

Renewal Group LLC, et al. v. City of Camden, et al., CV No.: 1:18-cv-10841-NLH-AMD.

2. To the best of my knowledge, no other action or arbitration proceeding is

contemplated.

3. To the best of my knowledge, there are no other parties who should be joined in

this litigation at this time. The investigation into this matter is continuing, and I reserve the right

to amend or supplement this certification as additional information becomes known.

BROWN & CONNERY, LLP


Attorneys for Plaintiffs, the City of Camden
and the City of Camden Redevelopment
Agency

s/William M. Tambussi
William M. Tambussi, Esquire
Dated: December 10, 2018

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EXHIBIT A
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 41 of 120 Trans ID: LCV20182139350
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CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 46 of 120 Trans ID: LCV20182139350
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CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 48 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 49 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 50 of 120 Trans ID: LCV20182139350
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EXHIBIT B
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CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 78 of 120 Trans ID: LCV20182139350
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CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 80 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 81 of 120 Trans ID: LCV20182139350
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CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 83 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 84 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 85 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 86 of 120 Trans ID: LCV20182139350
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 87 of 120 Trans ID: LCV20182139350
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EXHIBIT C
CAM-L-004612-18 12/10/2018 11:20:21 AM Pg 92 of 120 Trans ID: LCV20182139350
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