Bill for legal issues surrounding EDA may soon top $1M

By Anjalee Khemlani
Trenton | Jun 11, 2019 at 11:34 am

The ongoing EDA Incentives Task Force created by Gov. Phil Murphy, along with an investigation being conducted by the Attorney General’s Office, has already cost the New Jersey Economic Development Authority more than half a million dollars in legal fees.

That number may soon double.

The EDA has been billed more than $400,000 in legal fees through April, with an anticipated bill of $220,000 for May, according to officials at the monthly EDA meeting Tuesday.

In February, the EDA retained, through a Request for Proposal process, the law firm Friedman Kaplan Seiler and Adelman, which has offices in Newark and New York, for one year at a maximum cost of $250,000.

That maximum was increased by $400,000, to a cap of $650,000, by board approval in May.

At the meeting Tuesday, the board approved another $400,000 increase in the limit, pushing the cap above $1 million for the year.

The contract with the law firm allows three additional years, if an extension is approved by board, and includes all litigation that names the authority.

The legal bills have escalated with a lawsuit brought on by a team of lawyers representing South Jersey Democratic powerbroker George Norcross III, a law firm run by Norcross’ brother Phil Norcross, and George Norcross’ business interests.

The lawsuit is calling for an end to the task force, which Norcross believes does not have the authority to investigate incentives awarded to his companies and companies tied to him.

The legal battle is the result of the incentive task force’s second hearing, which focused heavily on Camden and companies that moved to or stayed in Camden after being awarded tax incentives.

Questions surrounding the applications and how they were processed by the EDA dominated that hearing in May and resulted in an escalating battle between Norcross and Murphy.

EDA Board Chair Kevin Quinn, who was appointed by the governor in May, said the authority has been changing its processes and taken seriously the issues found in the Office of the State Comptroller’s audit late last year.

That includes, Quinn said, exploring all options to pursue recapturing or repayment of funds “expended improperly” to companies in the state.

The EDA also approved a memorandum of understanding between the authority and the Commission on Science, Innovation and Technology — a previously dormant commission that was reinstated by the governor last year.

As the EDA ramps up its focus on innovation and startup businesses, the relationship between the commission and the authority is mutually beneficial, according to EDA CEO Tim Sullivan.

The partnership will include offering office space and administrative support to the commission, but no direct financial support, Sullivan said.

The MOU was unanimously approved by the board Tuesday.

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Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem