Holtec wins tax credit lawsuit as New Jersey Supreme Court declines to hear appeal

Holtec International has won a years-long legal battle over the energy technology company's application for $260 million in New Jersey tax credits.

The New Jersey Supreme Court declined to hear the state's appeal of a lower court ruling that found the Economic Development Authority could not void the 2014 tax incentive agreement, according to documents released Tuesday.

Holtec described the news on Wednesday as a “welcome vindication.”

“With this matter finally behind us, Holtec looks forward to continuing to focus on developing clean energy technologies to power future generations,” the company said.

The Supreme Court's decision comes at a time of renewed scrutiny of 2013 economic stimulus legislation that resulted in more than $1 billion in tax credits being awarded to businesses that relocated to Camden was provided.

New Jersey prosecutors now say the law, signed by Republican Gov. Chris Christie, was manipulated by Democratic power broker George E. Norcross III of South Jersey and his allies as part of a criminal enterprise. Norcross was charged with racketeering in June and pleaded not guilty. He has accused Attorney General Matthew J. Platkin of waging a political vendetta against him.

Holtec, a privately held company that specializes in nuclear fuel storage, has not been accused of wrongdoing in the matter. The tax incentives were approved in 2014 – one of the largest government packages ever awarded.

The company then invested more than $260 million to build a new campus in Camden, knowing that under its contract it would receive annual incentive payments over 10 years, which would be used to offset tax liabilities or sold for cash could.

In his motion, the company's CEO certified that submitting “materially inaccurate” information could result in the loss of tax credits, according to court documents. The company also said it is not prohibited from working as a state or federal contractor.

However, years later, as the state's tax agreements with Holtec and other companies came under scrutiny by Gov. Phil Murphy's administration, the state learned in 2019 that Holtec had been temporarily debarred by the federal Tennessee Valley agency in 2010 after an inspector general's inspection of Holtec had alleged funneled tens of thousands of dollars to an agency employee when he was looking for a contract. According to the IG report, Holtec refused to pay the employee.

Holtec believed the application question was a mistake at the time and later sent the EDA a letter correcting its answer to the exclusion question.

In 2019, the EDA withheld $26 million in annual tax credits, citing Holtec's failure to disclose the exclusion and the company allegedly making misleading statements about considering “alternative locations” in South Carolina.

Holtec sued the EDA in 2020 for breach of contract. A Supreme Court justice sided with the company, concluding that the terms of the application were ambiguous and that the EDA was at least partially responsible for the resulting confusion since the forms were created.

A three-judge appeals panel upheld that decision last year, and the state's highest court declined to intervene this week. A Holtec spokesman said the company has “transformed nearly 50 acres of brownfield land into a state-of-the-art technology and manufacturing campus that has created hundreds of good-paying jobs in New Jersey's poorest community.”

An EDA spokesman said that while the agency was disappointed with the outcome, it “respects the Supreme Court’s decision not to accept this case.”