Holtec International plans to build a 600,000-square-foot facility to build nuclear reactors on the Camden waterfront.
TRENTON — New Jersey officials today approved a $260 million package of tax credits — the third-largest economic subsidy in state history — for a nuclear-energy company planning to build reactors on the Camden waterfront.
Under the terms of the award, Holtec will create 235 new full-time positions and relocate 160 existing jobs from other parts of the state to Camden. Once those workers are in place, the firm will reap subsidies of $26 million a year for 10 years.
In exchange, New Jersey will realize $155,520 in net economic benefits over 35 years, the authority estimated. Under the terms of the agreement, however, the company is required to stay at the Camden location for only 15 years.
Liberals and conservatives alike criticized the $260 million tax break for a politically connected firm at a time when New Jersey is strapped for tax revenue to pay for its schools, hospitals, property tax rebates and pension obligations.
"This is just another form of crony capitalism, and it needs to end," state Sen. Michael Doherty (R-Warren), one of the state's most conservative lawmakers, said. "The more we do of this, the worse the economy gets in the state of New Jersey."
Authority officials said the project seemed worthwhile for Camden, which was a manufacturing and shipbuilding hub in its prime but now is frequently rated as one of the poorest and most violent cities in the United States. Last month, the EDA approved an $82 million award for the Philadelphia 76ers to build its new corporate headquarters and a practice facility in the city.
Also last month, the development authority gave the green light to a $6.2 million tax break for Broadway Housing Partners, a company that plans to renovate four buildings in Camden and build two new ones that are expected to house students and employees at Rowan University's Cooper Medical School. Norcross is chairman of Cooper University Hospital.
In Holtec's case, "Charleston, South Carolina, is a lower-cost option for the facility," the authority noted in a document recommending the tax subsidy. Krishna Singh, Holtec's chief executive, told officials that getting the tax break could tip the scales in New Jersey's favor.
A Norcross spokesman, Dan Fee, said Norcross does not own a stake in Holtec. “The Singh family is the sole owner of the company,” Fee said.
With today's award, Holtec plans to set up a 600,000-square-foot manufacturing plant to build a new generation of nuclear reactors and other equipment. No nuclear fuel would be stored or generated at the Camden facility, state officials noted.
Joy Russell, a vice president at Holtec, said the award presented "a great opportunity to make Camden a prominent industrial center in the Northeast — as its geographical location warrants."
"We believe it is important for us and others to concentrate on creating well-paying manufacturing jobs in the United States," Russell said in a statement, adding that Holtec executives would review the package Friday for final acceptance.
"This is just another form of crony capitalism, and it needs to end," said state Sen. Michael Doherty (R-Warren).
, according to federal data.
New Jersey Policy Perspective, a liberal research organization, said the tax break awarded to Holtec was one of the largest ever bestowed in the United States. The state is paying $658,228 for each job — "a sky-high number that has never been seen before in New Jersey and is even far higher than the average per-job cost of the largest 'megadeals' across the country," Jon Whiten, Policy Perspective's deputy director, said.
Doherty said the real cost was even higher, since 160 of the jobs already existed in the state.
"It looks like New Jersey is paying over $1 million for each new job that's being created, and this is a disturbing trend," he said.
Doherty added: "My understanding is that small businesses create 98 percent of the jobs in the state of New Jersey. Let's provide tax relief for small business — a broad-based program of tax relief — not a bunch of insiders sitting around a table picking the winners and losers, government picking the winners and losers."
The Democratic-controlled Legislature revamped New Jersey's tax-incentive programs last year, carving out looser provisions solely for Camden and opening the door to larger subsidies in general.
"New Jersey's policymakers need to revisit last year's legislation and rein in this reckless surge in business tax subsidies," said Gordon MacInnes, president of NJPP. "Instituting a cap on the amount of tax breaks the state can approve would be a simple and common-sense place to start."
Daryn Iwicki, state director for the anti-tax group Americans for Prosperity, said subsidies are pointless unless New Jersey first tackles its high income- and property-tax rates.
"The biggest problem we have here is it's another politically connected individual getting a tax break," Iwicki said, referring to Norcross, an influential insurance executive who entered into a partnership with Singh and others to buy the Philadelphia Inquirer in 2012. The Norcross group recently sold its share of the newspaper company.
Iwicki noted there were only two larger subsidies ever awarded in New Jersey — and that they had not panned out as expected. One of them, a $261 million subsidy spread out over 20 years, went to Revel Casino in Atlantic City, which is facing its second bankruptcy in two years. The other, valued at as much as $350 million, went to the stalled American Dream project in the Meadowlands, formerly known as Xanadu, with its own troubled financial history.
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