New Jersey wants to recoup $400,000 in tax credits from the Philadelphia 76ers
Years ago, the state’s Economic Development Authority had approved an $82 million tax credit package for Sixers based on their investment plans in Camden.
When the Philadelphia 76ers applied for a New Jersey tax break in 2014, the team pledged to build a new practice facility and create 250 jobs in Camden.
The state’s Economic Development Authority approved an $82 million tax credit package, based on the amount that the Sixers said they would invest in the project.
But now the EDA wants a portion of that award back — after a special task force determined last month that the agency should not have counted application and related fees that the Sixers owed the EDA as part of the team’s investment in Camden.
“We have notified the Philadelphia 76ers that their award was improperly calculated to include EDA issuance fees totaling approximately $400K and that their award will be reduced accordingly,” the agency’s CEO, Tim Sullivan, said in a monthly board report on Tuesday.
“We look forward to continuing dialogue with the EDA on this issue in the future,” a 76ers spokesperson said by email.
Talks between the EDA and the team over the issue were first reported by NJ Advance Media.
Gov. Phil Murphy established a task force last year to review the state’s multi-billion-dollar tax credit programs, after a comptroller’s audit found significant problems with oversight. The task force issued its second report in January, touching on the 76ers award, among others.
The $82 million award was approved during Gov. Chris Christie’s administration, under previous executive leadership at the EDA.
Ultimately, the Sixers certified a slightly lower investment amount to the EDA, totaling $79.56 million, including the EDA fees, according to the task force. The equivalent tax break is granted in installments over 10 years. Companies can use the credits to offset their tax bill, or sell the tax credits for cash to other businesses.
Task force investigators said they could not identify "why the EDA fees were included in the capital investment for the Philadelphia 76ers,” according to the January report. "EDA communications from the time of the award approval and certification imply that no one at the EDA questioned the inclusion of the fees.”
The end result, the task force said, was that public funds reimbursed the team’s fees.
On Tuesday, Sullivan also informed EDA’s board that the agency is seeking additional information from 18 other companies following the most recent task force report.