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East Penn Picks Members to Explore Costco Project Funding

East Penn School Board appoints members to Hamilton Crossings Tax Increment Financing Committee, despite one board member's concerns.

The East Penn School Board Monday night made a commitment to exploring a special funding option for the Costco project in Lower Macungie Township commonly known as a TIF by appointing two members and an alternate to be a part of a TIF committee.

The board appointed Superintendent Thomas Seidenberger and school board member Ken Bacher to the TIF committee, and Francee Fuller to serve as an alternate.

A TIF, which stands for Tax Increment Financing, is an economic tool that provides money for development of a site that requires a large amount of money to pay upfront costs. , faces pricey mine wash remediation and stormwater issues that must be addressed before it can move forward, according to developers.

School board member Julian Stolz voted against appointing any East Penn representatives to the TIF committee, stating that it is a case of “government interfering with business and the free market.”

Despite Stolz’s concerns, school board Chairman Charles Ballard emphasized that the committee will only explore the possibility of a permanent tax increment financing district for the proposed Hamilton Crossings shopping complex on Hamilton Boulevard.

Ultimately, Ballard said, East Penn’s representatives to the committee will “investigate whether or not it makes sense for East Penn to consider the TIF.”

The Goldenberg Group of Montgomery County has proposed a $100 million-plus shopping complex, to include Costco and Target. However, developer Jeremy Fogel of The Goldenberg Group has said that mine wash remediation and stormwater issues must be addressed before the complex can be completed.

When a TIF exists, according to state law, the taxing bodies – counties, municipalities and school districts – use a portion of tax revenue generated by the development for costs associated with building the project.

The TIF committee will be chaired by someone from the Lehigh County Industrial Development Authority, Ballard said. The committee must comprise representatives from the three political entities: Lehigh County, Lower Macungie Township and East Penn School Board.

The Lower Macungie Board of Commissioners appointed two representatives to the TIF committee in September: Township Manager Bruce Fosselman and Commissioner James Lanscek.

Fogel previously made a presentation to the school board. The Goldenberg Group is in partnership with Staten Island developer Tim Harrison on the Hamilton Crossings project.

The school board subsequently considered the situation and appointed its committee representatives Monday.

Stolz questioned whether the board was obligated to appoint anyone to the TIF committee. Board solicitor Marc Fisher said that decision was up to the board.

“This is picking market losers and winners, and giving preference to a business entity,” Stolz said. “We should not interfere with the free market.”

Bacher countered that the board is only putting representatives on the TIF committee to get the facts. “The time to debate the merits of the TIF will be when the details are known,” Bacher said.

School board member Alan Earnshaw agreed, adding, “If we have no voice, we have no choice” in the way the TIF develops.

The board voted 8-1 to appoint its representatives to the TIF committee, with Stolz casting the lone dissenting vote.

MS October 10, 2012 at 12:16 PM
What in the world does the school district have to do with this project? Building projects have nothing to do with the school district , I do not understand why the district has to have any involvement in the construction of a costco!
Jennifer Marangos (Editor) October 10, 2012 at 07:11 PM
@Missy Moyer-Schneck. This property is within the area from which East Penn School District collects property taxes. Right now, if memory serves, the district gets about $7,000 per year from the property. If the project goes through, the potential revenue for the district jumps to millions. The TIF, if approved, would ask the district and the other taxing bodies involved with the property to defer tax revenues for a period to pay for the remediation on the land. The way I understand things, the district would not lose any money if this goes through and ultimately stands to gain a significant amount of tax revenue.
Ron Beitler October 10, 2012 at 07:52 PM
Missy you know me. And you know I am not shy to call out developers and local gov't for subsidizing sprawl. Jennifer is correct however. The TIF in my humble opinion isn't a subsidy. It's deferring future revenue. Now, on top of the TIF the developer is asking for MILLIONS in grants. These grants ARE direct taxpayer subsidies no doubt about it and I do have a problem with that aspect. But the lions share of cost to fix the mine wash issue would be TIF money. The benefit for the EPSD could potentially be huge if this project is built. I've heard figures that this will generate nearly a million dollars in tax revenue. Now... thats just figures I've heard thrown about but I can say with confidence the end number this will generate is significant and much needed. Contrast this with the quality of life cost we're paying with warehousing... I'll take the retail any day. Lastly from a smart growth perspective, like it or not the by-pass has been built. And it cost teh taxpayer. Now that it's there this is a step towards the community getting some ROI on our major investment in this corridor. This area will be built out. This isn't like the Jaindl farmland which was and should remain protected. This is the designated commercial strip for the corridor. I do have a problem with the grants. I don't necessarily with the development itself or the TIF.
Garrett Rhoads October 11, 2012 at 03:49 AM
@ Jennifer Marangos: You have repeatedly told me that my submissions cannot be represented as coming from you due to political bias. I respect your decision. That being said, I find your comments on certain blog boards to carry a bias when it comes to the reporting of facts and figures. I am not against this particular TIF based on the finances. I met with the developers seperately and listened to their plans. FACTS: The projected improved tax revenues are not "millions" per year. They would be, at a maximum, $1.2 million per year DIVIDED amongst the school district and the county since the township does not YET have a real estate tax. This does not change your argument, but it does put things in perspective. We would also have EXTRA traffic lights, EXTRA traffic, EXTRA congestion, and a furthering of outside shoppers making LMT township resident commutes more congested and essentially negating the $100s of millions we spent on the bloody by-pass in the first place! Once this is built, IT WILL STILL TAKE LMT RESIDENTS 15 MINUTES TO LEAVE THE AREA IN ANY DIRECTION!!!
Garrett Rhoads October 11, 2012 at 03:54 AM
Let's not litter the bypass with more traffic congestion. Otherwise, we wasted all our money on proposed traffic flow in the first place. There are already 4 shopping centers within a 2 mile radius. Did we really spend billions on a bypass so developers could profit and STILL MAKE US WAIT IN ENDLESS LINES OF TRAFFIC? WTF.?
Jennifer Marangos (Editor) October 11, 2012 at 12:01 PM
@Garrett Rhoads. If you took my response to @Missy Moyer-Schneck's question to represent my opinion on things, that was a failing on my part. It is not. I was simply trying to summarize what I understood to be the "facts" presented by the developer to the entities involved. I am not advocating any particular point of view on this topic. I do, however, welcome you to share yours, as I always have. I again invite you (and anyone else out there in Patchland) to become a Patch blogger. Patch is meant to be a forum for the community to exchange ideas. I, again, offer to help you get started. Please call me or email me at any time.
Ron Beitler October 11, 2012 at 12:52 PM
@ Garrett - I feel what your saying.. We're hitting critical mass here in LMT with traffic. And like I said, I disagree with this developer receiving grants for this project. (although I am OK with the TIF as a mechanism) Here is something interesting....The developer of the property asked the township to label this property blighted to increase it's chances of receiving the grant. Thats insulting. (Blight = process whereby a previously functioning city, or part of a city, falls into disrepair and decrepitude.) A geological issue that the developer "discovered" in the 9th inning of submitting development plans is not blight. Not only IMO is this taxpayer money, but even worse.... this is taxpayer money going to an unintended purpose. This isn't a brownfield. This isn't blight. This isn't a re-development project. I have a philosophical problem with this. Another big picture item...LMT IMO has an obligation to the school district to level out it's tax base and contribute commercial to pay for it's residential. My solution would have been slow the residential growth a decade ago and continue to do so now. But now that it's been allowed to become so out of whack.... we have to make a choice. Warehouse or Retail....If given the choice (that our elected BOC took away from us with Jaindl land...) Since we already have a half dozen warehouses online to maintain balance I'll take high end retail on existing infrastructure over warehousing any day but do it without the grants.
An interested bystander October 11, 2012 at 01:09 PM
Before we start talking about a TIF, does anyone know how much of a hit the seller of the property is taking for their subpar land? I'm not interested at all in using a TIF to bail out the owner (wasn't it the Allentown Diocese?)
Ron Beitler October 11, 2012 at 01:33 PM
Very good question that needs to be asked at all 3 levels. Municipal, County and District. It's the sellers right to sell at whatever price they can get, but I see what your saying. Are we unfairly propping up the price of this useless land? And I'll go that far, it isn't just that this land is sub-par, everything I have heard is that this land is completely and totally un-useable without millions in mine wash remediation.
Scott Bieber October 11, 2012 at 01:52 PM
I oppose the TIF for philosophical and practical reasons. Philosophically, relying on TIF to promote development is unfair to non-TIF developers and land owners and and if we are going to start using TIF, why not use if for all land development ?? From a practically viewpoint, the community must evalute the costs/benefits of using a TIF for this project and determine positives and negatives to the community. The land will be developed sooner or later regardless of the soil problems, So why the big rush ?? Why should the community subsidize this particular developer and this particular land seller for this particular project? I say let the land sit idle until it become profitable to develop without taxpayer assistance. Do we really want this development right away. The community must decide if it wants to subsidize this particular project.
MS October 11, 2012 at 03:09 PM
what does "defer tax revenues" mean then...to me, that means they won't pay taxes on the property for a certain period of time, that means lose money....
MS October 11, 2012 at 03:14 PM
I personally don't believe we should be using a TIF either, these developers are not poor, they have the money to make this project work, they just want to see how cheaply they can make it work....
MS October 11, 2012 at 03:16 PM
I drive this area daily, I live off of Brookside Road, I see the traffic in the morning and the evening back up to my house, which by the way is blocks from hamilton boulevard.....there is no left turn only signal at the light at Brookside and Hamilton, you can only get two cars through that light to turn left after 4pm and before 9am....all of this has to be looked into....traffic will be a nightmare if this isn't looked into, and this is coming from someone who is for the retail development
for real October 11, 2012 at 08:22 PM
The word I'm getting is this will create jobs, bring in big time tax revenue and all the developers want is a small % of the tax revenue to go towards the bonds. What is the problem? If this is the area by the new bypass develop it. If another developer is willing to fix the environment show us who that is. Tax relief and job creation is something that deserves support.
Ron Beitler October 12, 2012 at 01:44 PM
Missy thats what it means a deferral. But here is what makes it unique. Just my opinion. Right now the taxes on that property are about 7000 a year. Per acre thats nothing. When this project is built, it will be upwards of a million. So the rationale is that you defer the FUTURE taxes to pay for the bonds that enable this project to go from producing 7000 dollars to upwards of 1,000,000 dollars. Do I think the township/county/EPSD reps should vet this developer? Absolutely. Has the price been reduced? Have other funding mechanisms (not taxpayer money) been explored? Is the township getting every single smart growth bell and whistle possible? (Developer should pay for walking trail connecting Harvest Fields and the future greenway to the shopping center) What should the TIF length be? (as short as possible) ect. ect. ect. But in the end you have a public private partnership that will be be an absolute much needed cash machine for EPSD. In terms of what I care about. Smart Growth there are bigger fish to fry. (Jaindl property, Allen Organ property, continued low performing strip development of Old hamilton... ect. ect) I do have a fundamental issue with the grants. I see the creativity in the TIF. I hope the planning commission and BOC push this developer further with smart growth. There are some negatives. But I think the positives outweigh in this case. Though I am happy folks like Julian (who I sometimes agree with sometimes don't) are giving some pushback.
Ron Beitler October 12, 2012 at 01:48 PM
Big time tax revenue. Big time. Yes, we're deferring taxes. But they are taxes that right now do not exist. And yes, from my understanding it's a % of the taxes that go to the bonds. When it's all said and done from a TIF standpoint when this project is cooking it will immediately be a substantial net gain in taxes even with the % being taken out. Exactly how long the timeframe, exactly what % comes out... Thats what the TIF committee will explore. Now the state grants? I can't say enough. I disagree with grant money funding this project. TIF and grants... two different mechanisms in this case.

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