Officials rejected a bid for a $7.3 million corporate tax break, arguing that a health technology company failed to show it actually needed the incentive to afford to stay in New Jersey, and that one of its shareholders already received a much larger award from the state.
Integrated Medication Management said in its January 2019 application for the controversial, and now-expired, Grow New Jersey program that it was considering both a 19,800-square-foot office space in Pennsauken and a 19,400-square-foot office space in Southampton, Pa.
IMM is jointly owned by Moorestown-based BAYADA Home Health Care Inc. and Springfield, Mo.-base Integrity Pharmacy LLC at 63.49 percent and 31.75 percent respectively. Bayada was previously approved for an $18.4 million Grow NJ tax break in 2016 for consolidating several of its offices into a single location in Pennsauken.
Judging by the dollar amounts alone, IMM showed that they would spend more at the New Jersey site than in Pennsylvania—$293,972 upfront and $6.7 million in the long-term in New Jersey compared to $214,772 upfront and $6.7 million long-term for Pennsylvania.
But EDA staff remained skeptical, saying that because the “intertwined relationship” between Bayada and IMM “may affect the nature of IMM’s business and its location decisions,” the company could not show that New Jersey was a more expensive option without the incentives, also known as a material factor.
EDA staff questioned just how separate IMM and Bayada would be, pointing to a March 28, 2019 legal memo from Bayada’s attorney describing how the entity would “have exclusive legal control over the design and operation of the medication management program for [IMM].”
“The integrated nature of IMM with Bayada at both a corporate and operational level, the similarity of its clientele, and the location of its clientele demonstrates that it has compelling reasons to locate in New Jersey, thus making the incentive not a material factor in its decision-making,” the report concludes.
IMM and Bayada, nonetheless, declined to withdraw the application two months ahead of the NJEDA’s Feb. 11 board meeting, even after being told they would likely be rejected – making the public rejection of the application a rare occurrence.
Bayada officials declined to comment.