A contentious legal battle involving Panasonic Corp. of North America ended Monday when Hartz Mountain Industries dropped its protest of the state's award of tax incentives so the electronics company could move its headquarters from Secaucus to Newark.
"Our litigation against (Economic Development Authority), which centered around policy issues, would have been costly and time consuming and we have decided focusing our efforts on marketing the site to a new user is a better use of those resources," Hartz's President and COO Emanuel Stern said in a statement. "Hartz Mountain's partnership with Panasonic, a tenant in our Harmon Cove development for 40 years, was immensely important to the growth of both of our businesses and we wish them the best."
Hartz had mounted a legal challenge to the EDA's use of $102.4 million in Urban Transit Hub tax credits for the relocation. In April, the city and Panasonic announced a new lease agreement for the headquarters at a new office tower Matrix Development Group and SJP Properties will build at 2 Riverfront Center.
Panasonic will occupy 250,000 square feet of the 410,000-square-foot facility, which will be home to 1,000 of the company's employees and contractors beginning in 2013, when the company's lease at its current headquarters in Secaucus expires.
Hartz balked at the use of incentives, filing suit against the state for allegedly failing to disclose documents relating to Panasonic's application for the tax credits, and for acting outside of its authority in approving a subsidy that will create no new jobs in the state.
The EDA initially approved the grant Jan. 11, then re-approved it Feb. 16, after Hartz objected to the lack of public notice on the first vote. In its Feb. 16 meeting minutes, the agency considered Panasonic's 806 jobs as new jobs because they were at risk of leaving New Jersey. Under the statute that created the Urban Transit Hub tax credit program, a grant must create a net positive benefit for the state.
Caren Franzini, EDA chief executive, had told NJBIZ that Panasonic expects to create 200 new jobs during its 15-year lease period in Newark, bringing its total future employee count in the city to 1,000.
On Monday night, the EDA declined to comment on Hartz dropping the lawsuit.
Stern could not be reached after the statement was released by his spokesman, Ron Simoncini.