Tim Sullivan, CEO of the Economic Development Authority, speaks during a recent event. — file photo
By Joshua Burd
A state agency is looking into six companies that were awarded tax credits under New Jersey’s beleaguered incentive programs, including a global drug manufacturer and several firms with ties to George E. Norcross III, the powerful South Jersey Democratic leader.
The Economic Development Authority announced Wednesday that it has formally requested additional information from the organizations: Conner Strong & Buckelew, Cooper Health System, Holtec International, NFI, Teva Pharmaceuticals USA and The Michaels Organization. The entities have been awarded tax credits totaling $585 million over 10 years under the six-year-old Grow New Jersey program — which is set to expire on June 30 — but are now caught up in the growing scrutiny of the tax incentives under Gov. Phil Murphy.
In its announcement, the EDA said the requests are meant to give the companies a chance to respond in writing to a range of recent developments. Teva is ensnared in a lawsuit over alleged price-fixing, while a task force appointed by Murphy has raised concerns that Norcross and his allies influenced the legislation that created Grow New Jersey.
“We have no higher obligation than to serve as stewards of taxpayer dollars, and the process we are initiating today will enable our team to make a determination of appropriate next steps with regard to these specific companies,” said Tim Sullivan, EDA’s chief executive. “Transparency and accountability should be the hallmark of any public investment program, and we take any allegations of wrongdoing very seriously.”
The announcement comes a week after the task force issued a scathing report about the programs, alleging mismanagement and a lack of due diligence by the EDA as it awarded billions of dollars in tax credits. The report also raised several “red flags” about applications by three of the companies linked to Norcross — Conner Strong, NFI, Michaels and Cooper Health — and whether they ever considered moving out of state.
Norcross is the executive chairman of Conner Strong, an insurance brokerage, which recently moved to a new waterfront office tower in Camden alongside NFI and Michaels. The companies jointly developed the 375,000-square-foot building with the help of a combined $245 million tax credit package under Grow New Jersey.
Cooper Health, of which Norcross serves as board chairman, was awarded a 10-year, $39.9 million tax credit package in 2014 to consolidate operations in Camden.
Teva, in a 42-state lawsuit unsealed earlier this week, is accused of illegally hiking drug prices along with 20 other manufacturers. The EDA last year awarded the Israel-based generics maker a 10-year, $40 million Grow New Jersey package to compel it to move its U.S. headquarters from Pennsylvania to Parsippany, where it has signed a lease for 345,000 square feet.
The EDA noted that any significant change to a company’s Grow New Jersey award — including a reduction in the amount, a suspension or termination — may require an action of the authority’s board. The letters sent this week will initiate a process to allow its staff “to make informed decisions, which may include recommendations to the board for any potential actions, if warranted,” agency said.