Three more companies face scrutiny over millions in N.J. tax breaks

Posted Jul 18, 2019

The state Economic Development Authority — which is already looking at six companies that received millions in controversial tax breaks awarded by the state — is widening its investigation to include three more companies given lucrative grants that have also been called into question.

The EDA on Thursday requested what it called “clarifying information” from GoBrands, Sandoz and Express Scripts Pharmacy regarding their Grow NJ tax credits, saying the companies will be afforded the opportunity to respond to a range of questions, “including discrepancies in their applications.”

“This outreach is the first step in a process that will allow NJ EDA staff to make informed decisions, which may include recommendations to the board for any potential actions, if warranted,” the agency said.

The EDA has been reviewing the awards made under the Grow NJ tax incentive program in the wake of separate investigations by a special governor’s task force into the EDA, and hearings by the Legislature.

Among the issues in question include whether companies misled the state about their intentions to leave N.J., and whether they generated the jobs they promised when they received the tax incentives meant to lure more business here.

The task force was appointed by Gov. Phil Murphy in January after a critical report by the state comptroller that concluded the EDA may have “improperly awarded, miscalculated, overstate and overpaid” credits to a number of companies involving literally billions in state funding.

In its own report, the task force concluded that the economic development agency did not have adequate procedures in place to vet applications that should have been rejected. But much of its focus has been on incentives that went to businesses tied to South Jersey power broker George E. Norcross III, a political rival of the governor. Task force attorneys have charged that legislation meant to spur economic development in the state was re-written in part to benefit Norcross interests.

In the wake of those allegations, the EDA last month sent letters seeking more information regarding their grant applications to Conner Strong & Buckelew, the giant insurance company headed by Norcross, and to Cooper Health System, where he serves as chairman. Also receiving letters were Holtec International; NFl; Teva Pharmaceuticals USA, Inc.; and The Michaels Organization.

All but Teva have ties to Norcross. The Israeli company announced plans last year to relocate its U.S. headquarters from Pennsylvania to New Jersey in exchange for $40 million in tax credits from the state.

Cooper and Connor Strong have already responded to those requests, said a spokesman for Norcross, who added that the EDA already had most of the information that had been requested. He said the Michaels Organization and NFI are still working through their responses.

In court filings, attorneys for Norcross as well as his insurance company and Cooper Health System have charged that the task force turned its sights almost exclusively on Norcross and those associated with the Camden County Democrat “focused almost exclusively on destroying the plaintiffs.”

In a press call earlier on Thursday, they said the task force was “an unlawfully instituted body designed to investigate George Norcross.”

The companies added to the EDA’s review list on Thursday—which have no apparent connection to Norcross — included Gobrands Inc., which operates the goPuff service, last year was granted a $39 million incentive award by the EDA to open a nearly 300,000-square-foot distribution center in Gloucester County. The state awarded Sandoz a Grow NJ award worth $9.1 million over 10 years to build a new headquarters.

The EDA is already looking at reducing a $40 million tax break award for Express Scripts Pharmacy for not creating and retaining the jobs it promised under a 2013 agreement.

Jennifer Luddy, a spokeswoman for Express Scripts, said the company “has been working closely with the NJ EDA to provide them with the information they need to certify our participation in the NJ Grow project. We look forward to that certification happening soon.”

Sandoz confirmed it received the letter and has already responded.

Gobrands did not immediately respond to requests for comment.

Do you like this post?

Be the first to comment