Holtec International has sued the New Jersey Economic Development Authority (EDA) in an effort to force the state agency to resume providing $260 million in tax credits promised in 2014.
The Camden, N.J., energy technology company on Tuesday announced the lawsuit, filed March 20 in the Superior Court of New Jersey.
“In disregard of its contractual obligations, the EDA has stalled and failed to approve Holtec’s 2018 submission for its tax credits, which has caused Holtec tens of millions of dollars in damages,” according to the complaint. “Holtec was thus left with no choice but to file this Complaint and seek an order requiring the EDA to comply with its duties under the Incentive Agreement.”
In 2014, Holtec secured a $260 million state tax credit to be stretched across 10 years starting in 2017. The credit agreement was predicated on Holtec investing at least $300 million in a new 47-acre manufacturing and research facility in Camden, which opened in 2017.
Under the 2014 agreement, the EDA is required to issue Holtec a letter of compliance annually for a decade if Holtec satisfies its contractual obligations. This letter is needed for Holtec to obtain a $26 million annual tax credit. The deal went smoothly for 2017, but the state agency to date has not signed off on the 2018 tax credit, the complaint says.
The lawsuit notes that Gov. Phil Murphy (D) has sought to reform the EDA tax credit program since taking office in January 2018, ordering an audit by the New Jersey State Comptroller’s Office and then establishing a task force to study the tax incentives.
The task force, in a report last June, noted that the Economic Development Authority in 2014 failed to note that Holtec had been briefly barred from doing business with the federally owned Tennessee Valley Authority over a bribery case. The state froze Holtec’s tax break after determining the company had failed to acknowledge the TVA case in its application, according to reports from the time.
Along with an order directing the Economic Development Authority to provide the letter of compliance for 2018, Holtec is asking the court to award damages and other relief.
