Holtec didn’t mislead the N.J. Economic Development Authority to get millions in tax credits, appeals court says

A New Jersey appeals court sided Thursday with Holtec International in its long-running legal fight with the state’s economic development agency, ruling that the energy technology company didn’t commit fraud when it applied for $260 million in tax incentives in 2014.

The three-judge panel’s ruling affirmed a lower court judge’s 2021 decision ordering the New Jersey Economic Development Authority to pay Holtec $26 million in incentives that the agency had tried to withhold. The tax credits are awarded in increments over 10 years.

Holtec invested more than $260 million to build a new campus in Camden after the EDA approved the company’s application. The incentive program was a key piece of then-Gov. Chris Christie’s economic development plan.

The state comptroller later criticized the state’s oversight of the program, and in 2019 a task force appointed by Gov. Phil Murphy questioned whether Holtec and other companies had misled state officials on their tax credit applications.

For example, the application asked whether the company had been prohibited from working as a state or federal contractor. Holtec said “no,” even though it had been debarred for 60 days in 2010 by the Tennessee Valley Authority, a federal entity.

Holtec said at the time that the omission was an oversight. The EDA refused to certify the company’s tax credits for 2018, saying Holtec had made “material misrepresentations” on its application. In addition to the debarment issue, the EDA alleged that Holtec misled the agency about its consideration of an alternate site location in South Carolina.

Holtec in 2020 filed a lawsuit accusing the agency of violating its contract. Superior Court Judge Robert Lougy ruled in Holtec’s favor, finding that the application’s provisions were ambiguous and that the EDA was at least partially responsible for any resulting confusion since it drafted the forms. The EDA appealed the decision, saying the matter should be decided by a jury. That led to Thursday’s ruling.

The appeals court panel agreed with Lougy’s findings and added that it would be unfair to rescind tax credits, writing that “no fraud occurred here.” The panel added that Holtec had already invested capital in its Camden facilities.

“We appreciate why NJEDA is motivated to respond to the state comptroller’s criticism of its administration of the Grow Program,” the decision said. “However, rescinding tax credits to a company that dutifully fulfilled its agreement to make substantial investments in Camden — an economically disadvantaged city — would hardly be equitable considering all relevant circumstances.”

Holtec said in a statement Thursday that it was pleased by the decision. “Our desire to help grow both our business and the area’s economy was a key driver in our decision to move to our waterfront Camden location,” the company said. “Holtec’s commitment to bringing strong, lasting economic development and high-paying jobs to Camden remains as strong as ever.”

The NJEDA said it was “disappointed in today’s ruling and is considering its options.”

The case was heard by Judges Lisa Firko, Ronald Susswein, and Christine Vanek of the Superior Court’s Appellate Division.