A state appeals court upheld a 2021 ruling late last month, siding with Holtec International in its long-running legal fight with the New Jersey Economic Development Authority (NJEDA) over tax incentives.

“This appeal arises from defendant New Jersey Economic Development Authority’s decision to rescind tax incentive credits it awarded to plaintiff Holtec International under the New Jersey Grow Program. In 2014, NJEDA agreed to award $260 million in tax credits over a 10-year period to include Holtec to build a new technology campus in Camden,” the three-judge panel, which included Judges Lisa Firko, Ronald Susswein and Christine Vanek, wrote in their opinion.

“NJEDA initially certified the tax credits. In June 2019, the Office of the State Comptroller issued a report alleging Holtec had misrepresented facts in its application. The public report criticized NJEDA for its lack of diligence in enforcing the tax incentive program. Thereafter, NJEDA refused to certify tax credits for the 2018 tax year, prompting Holtec to file the present lawsuit,” the opinion continued.

In 2021, Mercer County Judge Robert Lougy ruled in favor of Holtec – ordering the state to make the full $26 million payment for 2018 as well as issue a letter of compliance, a decision that the NJEDA appealed.

In affirming the original ruling, the three-judge panel wrote Nov. 30 that Lougy had written a well-reasoned 41-page opinion that NJEDA could not void the tax incentive agreement – finding that certain provisions in the application were ambiguous and should be construed against NJEDA, which drafted the application.

“The judge concluded that Holtec did not make any material misrepresentations in its application for tax credits,” the opinion continued. “After carefully reviewing the record in light of the governing legal principles and arguments of the parties, we affirm.”

In the conclusion of the written opinion, the three-judge panel concurred with Lougy that no fraud had occurred.

“The ambiguity associated with the applicated form NJEDA drafted excuses any omissions in Holtec’s completed applications. Furthermore, as Judge Lougy stressed, Holtec relied on the tax credits in deciding to make a very significant investment in New Jersey by relocating to Camden as the Authority requested,” the judges wrote.

“Considering Holtec’s significant investment in the new technology campus, there is no way to return the parties to their pre-contract positions. We add that NJEDA continues to benefit from Holtec’s ongoing performance. We can appreciate why NJEDA is strongly motivated to make amends for its past lack of diligence in overseeing the Grow Program, as claimed in the State Comptroller’s report. We appreciate why NJEDA is motived to respond to the State Comptroller’s criticism of its administration of the Grow Program,” the opinion continued. “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.”

The panel closed by describing the original ruling as a comprehensive decision that was well supported by undisputed facts.

“Holtec is pleased by the Appellate Court’s decision affirming in full its rights under the agreement with the New Jersey Economic Development Authority,” a Holtec spokesperson told NJBIZ in a statement. “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. Holtec’s commitment to bringing strong, lasting economic development and high-paying jobs to Camden remains as strong as ever.”

“The NJEDA is disappointed in the ruling and is considering its options,” an NJEDA spokesperson told NJBIZ in a statement.