Lockheed Martin wins $107M tax break to keep jobs in South Jersey

The state Economic Development Authority, seeking to keep 250 jobs in South Jersey, on Monday offered $107 million in tax breaks to Lockheed Martin Corp.

At its monthly meeting, the EDA also approved tax credits worth $7.4 million to a Maryland life-sciences firm considering a move to Camden. The company, DioGenix Inc., says it could create 71 new jobs in the impoverished city.

Lockheed Martin said it plans to open two laboratory facilities next year in leased space in two downtown buildings. The sites will hold workers currently assigned to the defense contractor's Moorestown facility, where about 3,500 employees pursue weapons research.

Without the tax breaks, Lockheed Martin planned to eliminate the jobs "due to increased competition in the defense industry," according to the EDA's agenda for Monday's meeting.

Lockheed Martin will invest $146. 4 million in its Camden project, according to the EDA. It will lease about 50,000 square feet at the L-3 Communications building, at 11 Federal Street, and the Waterfront Technology Center, at 200 Federal Street.

A Lockheed Martin representative described the Camden project as "fully integrated lab facilities, focused on various aspects of research and development."

"This exciting opportunity will allow us to capitalize on our core technologies and bring new solutions to our customers," said the spokesman, Keith Little.

Rowan University officials said the labs would strengthen an effort by Lockheed Martin to provide a "path to work" for the school's technology students. Ali Houshmand, Rowan's president, predicted "a ripple effect that will benefit many sectors of our economy."

But the tax break was sharply criticized by Gordon MacInnes, president of New Jersey Policy Perspective, a Trenton think tank.

He said the EDA's action "is just the latest in a string of tax breaks highlighting the insanity of New Jersey's economic development efforts."

MacInnes noted Lockheed Martin, which earned $17 billion over the last four years, will move its workers "at the steep cost to taxpayers of $428,000 per job."

He also said the EDA calculates a "very slim" net benefit to the state of about $250,000 after 35 years, while requiring Lockheed Martin to stay in Camden for only 15 years.

If Lockheed leaves before the 35-year period ends, "the Garden State's taxpayers would be served with a loss of tens of millions of dollars," MacInnes said. Among other measures, he urged legislators to revise the net benefits test "to balance business and taxpayer interests."

In contrast, the tax break for DioGenix projects a net benefit for the state of $20 million over 35 years.

DioGenix, a seven-year-old firm based in Bethesda, Md., is preparing to market a new test that could help doctors diagnose and treat multiple sclerosis. The company, which wants to expand its laboratory, is considering leasing about 15,700 square feet at 808 Market St., Camden.

A DioGenix spokesman could not be reached.

Tax breaks would extend over 10 years for both Lockheed Martin and DioGenix.

The EDA now has approved requests for tax breaks worth more than $460 million from companies pursuing projects in Camden. The requests were made under a 2013 state law intended to spur job growth in Camden.

Among the biggest projects, the EDA has granted 10-year tax credits worth $260 million to Holtec Inc., an Evesham firm planning to build a factory in Camden's port district, and $82 million for a Philadelphia 76ers practice facility on the downtown Waterfront.

The authority is weighing a request for a $65 million tax break to spur development of a supermarket-anchored shopping center on the Admiral Wilson Boulevard.

Reach Jim Walsh at jwalsh@courierpostonline.com or (856) 486-2646. Tweet him @jimwalsh_cp.