CAMDEN, NJ — Holtec International, which has its technology campus based in Camden, filed a lawsuit against the New Jersey Economic Development Authority (EDA) on March 20 demanding the state pay $26 million that it is owed in 2019 for taxes that were paid the year prior.
As part of the Grow New Jersey Program, Holtec was granted a $260 million tax break in 2014 - the first $26 million payment of which was initially owed in 2018 for taxes paid a year before. The sum was meant to be paid out over the next 10 years from that point.
However, in 2019 the EDA ceased payments to a number of companies for the time being as it reviewed hundreds of millions of dollars in tax break payments for 2018 — working to verify that companies were indeed complying the program.
At the end of January, the EDA had paid out $72.3 million in Grow New Jersey corporate tax breaks and economic redevelopment financing awards.
But Holtec — as well as other South Jersey recipients of tax breaks with political links to executive George Norcross — was among the companies that received a request last summer to provide supplemental information regarding Grow New Jersey tax credits for review.
The suit says Holtec — which borrowed against the annual tax credit amount of $26 million — was required to transfer annual incentives to lenders.
“To avoid being in breach of its own contractual obligations, Holtec was thus forced to make cash payments of approximately $26 million to these purchases,” reads an excerpt from the suit filed in the Superior Court of Mercer County. “Unless the EDA is forced to comply or reverse its position, Holtec will [continue] to be significantly hanged on an annual basis.”
Holtec alleged that it was unsuccessful in attempting to set up meetings with the EDA and address outstanding issues.
The “EDA shocked us by arbitrarily failing, without explanation, to act on our 2018 tax credits,” reads a statement from Holtec in reference to the inability to set up a meeting with the state agency. “Fourteen months have elapsed without a logical reply from EDA to our queries. Even a tentative meeting accepted by EDA was subsequently canceled; perhaps it is hard to be totally unresponsive face-to-face.”
The EDA did not immediately respond for comment.
Holtec claimed it was the victim of “bitter infighting between the state’s politicians [that have] degenerated to the point where personal feuds outweigh sensible public policy.”
A task force created by Gov. Phil Murphy criticized the company last year, saying it had misled state officials on its tax credit application.