When Joseph Jingoli & Son built Holtec’s new technology campus in Camden, the ribbon cutting in September 2017 was a day of triumph. Jingoli even finished construction ahead of schedule, giving Holtec a sparkling new campus that came with $260 million in state tax incentives.
A year and a half later, the two firms, both prominent in New Jersey, are embroiled in a lawsuit over the high-profile project.
The claims center largely on money from an insurance policy — brokered by a third Jersey behemoth: Conner Strong & Buckelew, the brokerage headed by political powerhouse George Norcross III, who sits on Holtec’s board of directors and who has championed the program that has approved $1.6 billion in tax incentives for businesses going to Camden.
Jingoli is suing Holtec, alleging that it was denied a $1.1 million insurance bonus, after Holtec ordered a change to the insurance policy that it never put in writing.
Holtec, an energy company, has denied the allegations in court papers, and asked a Mercer County judge to move the case to the court system’s program for complex business cases. The judge granted the request in an order issued Tuesday.
Jingoli had opposed such a move, and said its claims aren’t “novel or complex.” The suit, filed in January, accuses Holtec of breach of contract and unjust enrichment, and seeks a judgment of $1,197,439.20.
Both Jingoli and Holtec declined interview requests about the lawsuit.
Conner Strong is not a party to the suit. The firm’s name appears on an insurance balance sheet submitted as an exhibit in the case, which lists the brokerage fee as $200,000 on the $5.5 million policy.
“The allegations have nothing to do with Conner Strong,” said spokesperson Dan Fee. He confirmed Conner Strong served as the broker on the policy, and said the firm has worked with Jingoli and with Holtec, going back nearly two decades.
“Conner Strong has worked with both Jingoli and Holtec for many years, long-term relationships,” Fee said.
The suit offers a window onto the private business dealings made possible, in part, by the tax incentive program that helped fuel Camden’s building boom. The program has come under intensifying scrutiny by Gov. Phil Murphy’s office, after a state audit found “significant” problems with Economic Development Authority (EDA) oversight of $11 billion worth of incentives for businesses.
Norcross, in a speech last month, defended the incentives, touted the “extraordinary renaissance” of a city long-plagued by violence, and praised his political ally, former Gov. Chris Christie. “He saved this city,” Norcross said. Norcross’ brother, U.S. Rep. Donald Norcross, when he was a state senator, cosponsored the 2013 tax credit legislation that Christie signed into law.
In the same speech, Norcross pointed to Holtec as an example of how the program “really works”: the owner puts up the cash to build and begins to collect a portion of the incentive award — 10 percent a year — only once the project is finished, and provided it’s meeting the program’s requirements to create jobs.
People think, based on media accounts, “that the state stood up and wrote you a check for 300 million bucks," Norcross said. That’s not the case, he continued: “Every single [company] has had to put up the entire amount of money to fund their construction … and they’re all betting on the city of Camden."
Conner Strong makes more than $90 million in revenue, according to its website, as of Tuesday evening. (Fee disputed the revenue figure, which was listed in the chief financial officer’s bio, but would not give a specific number.) The company was approved for an $86 million tax incentive toward building an office tower on the Camden waterfront.
Asked if Norcross’ business benefits from more development and improvement in Camden, Fee said: “He’s invested almost $100 million of his and his family’s money in its future. He has tied the future of his firm to Camden’s future. He has brought friends in to help invest, as well."
In a statement, Fee added: “The insinuation that he has done all of this to pick up a few commissions from firms he’s worked with for many years is ludicrous and typical Trenton nonsense.”
Fee also referred to previous comments by Norcross, that the tax incentive program has succeeded and should now be revised. “He now supports scaling the subsidies back," Fee said.
The 2017 celebratory opening of Holtec’s 50-acre site — named the Krishna P. Singh Technology Campus for the company’s CEO — drew a crowd of executives and public officials, including Christie and State Senate President Steve Sweeney. A year later, Singh kicked up a controversy with published comments about the difficulty of finding skilled workers in Camden.
Holtec created 239 new jobs and retained 160 in 2017, according to the EDA.
Jingoli’s lawsuit says it was entitled to half of any insurance savings on the project. The contract originally provided for a “contractor-controlled” insurance program, the suit says, but Holtec wanted to switch to an “owner-controlled” insurance program (OCIP), instead. The suit also alleges that Holtec’s general counsel directed the change to the policy, “but the change was not put in writing.”
That allegation stood out to Penn State law professor Christopher French, who specializes in insurance and contract law. “I would say it’s highly unusual to have a significant change to a contract like this without it being memorialized,” he said, adding, “particularly in a case involving sophisticated parties and the amounts of money at issue.”
Jingoli said it was willing to make the change, so long as it continued to manage the insurance program, and “with the understanding” it would still get 50 percent of any savings. Under these types of programs, the suit says, “savings typically occur when the contractor emphasizes safety on the project,” and keeps accident claims below a projected amount.
The insurance savings on the project came to $2,230,466.99, according to the lawsuit. Jingoli says it submitted an invoice for its share, but was rebuffed.
“Holtec sent a letter advising Jingoli that it was not going to pay the bonus,” the suit says, because the contract referred to one type of policy — a contractor-controlled policy — and a different type — an owner-controlled policy — “was ultimately used.”
In discovery, Jingoli is seeking information “related to how insurance underwriters set up the OCIP program and the underlying basis for OCIP,” attorneys for Holtec said in a court filing this month. Holtec said “a number” of underwriters or carriers were used in providing quotes, and that it anticipates the case will involve more than 20 depositions.
Jingoli has been involved in major construction projects on both sides of the Delaware River, including the Stockton University and South Jersey Industries campus in Atlantic City and the Pennsylvania Convention Center in Philadelphia. CEO Joseph Jingoli Jr. is an owner of Atlantic City’s Hard Rock Hotel & Casino.
Jingoli’s online project portfolio lists the Kipp Cooper Norcross Academy, a charter school, and the Cooper Medical School of Rowan University. Norcross is the chairman of the board of trustees for Cooper Health System.
And Conner Strong has provided insurance services to Jingoli, according to materials on the brokerage’s website.
“The fact that there are power players involved in both the development and the insurance side of this, doesn’t at the outset strike me as all that odd,” said Seton Hall University political science professor Matthew Hale. “Independent of the politics,” he added, “you have a lot of potential for litigation over new development. The power players, by nature, are just the ones involved in a lot of these different developments.”
The story was updated with more comment from a Conner Strong spokesperson on the firm’s revenue.