Judge says EDA cannot withhold Holtec’s disputed $260M tax credit

State ordered to award $26M credit in next 30 days; Camden company could have 3 additional $26M credits coming, too

A Superior Court judge in Mercer County has ruled the New Jersey Economic Development Authority cannot freeze or withhold portions of the $260 million tax credit that was awarded to Holtec International.

The ruling, issued by Judge Robert Lougy on Dec. 30, pertains only to the potential award for calendar year 2018. Lougy ruled the state must issue a letter of compliance for the full $26 million annual amount within 30 days of his order.

Holtec, however, may be due much more than that.

Holtec, which was given the award in 2014, earned the first of what potentially could have been 10 annual $26 million tax credits in 2018 (for calendar year 2017) — a year after moving into a new facility in Camden.

The hold the state put on the award prevented Holtec potentially from collecting an award for calendar years 2019 and 2020 — meaning Holtec could be in line for $52 million in additional tax credits.

Holtec presumably also would apply for an award for calendar year 2021 — certifications for those awards have just begun — and potentially do so for the next five years, as well.

“Holtec is pleased by the judge’s decision and looks forward to working with the State of New Jersey and the City of Camden in the future,” Joe Delmar, senior director, gov’t affairs & communications, Holtec International said via email.

Gov. Phil Murphy has been a critic of the large incentives given out to companies to move to Camden since he was candidate Murphy in 2017. The state’s use of incentives has been a point of contention — and investigation — since Murphy took office.

In June 2019, the state put a hold on the award to Holtec, while investigators examined details of the application. Among the issues was Holtec’s sworn answer to questions regarding whether the company had ever been barred from doing business with a state or federal agency.

The company, as reported by ProPublica, had been barred in 2010 from doing business for 60 days due to an issue with its contract with the Tennessee Valley Authority.

Lougy found the EDA’s questionnaire on the debarment issue to be ambiguous and, as a consequence, found that Holtec’s response does not disqualify it from receiving the tax credit payment.

A spokesperson at the EDA said the organization is considering an appeal.

“While we are disappointed in the court’s ruling, we respect the outcome of the judicial process,” the spokesperson said. “We are considering a possible appeal and do not have any further comment at this time.”