LEWISBURG — A tax increase is likely in Union County to help pay off debt taken out 13 years ago to construct a mostly vacant industrial park off Route 15 in Gregg Township, a county commissioner said.
And as such, Preston Boop and fellow Commissioners John Mathias and John Showers declined to participate in a Tax Incremental Financing — or TIF — proposal that a New York developer said he needed to redevelop the former Pennsylvania House property.
“It’s going to cost us some political capital,” Boop told Howard Schlessinger, of Meridian Development Partners, during a county meeting Tuesday. “And I’m not willing to give up any political capital to subsidize another development.”
Boop was referring to Great Stream Commons, a 670-acre industrial park off Route 15 north of Allenwood.
The county has to pay off $13 million in bonds used to create the park, a fee originally to be paid by tenants. However, those tenants have not materialized.
As for the Pennsylvania House project, this is the latest blow to Schlessinger’s plans to redevelop the blighted 42-acre property, vacant since La-Z-Boy moved the jobs overseas in 2004.
School district declines
The Lewisburg Area School District last week also declined to participate in a committee that would study and ultimately negotiate an agreement with the developer and the involved taxing bodies — in this case, the school district, the county and East Buffalo Township.
Though East Buffalo signed on to the proposal, the amount it collects in taxes is small compared to the county and school district.
“We have to reassess,” Schlessinger said after the commissioners’ rejection. “I have to come up with other options.”
A TIF relies on potential tax dollars of a property to pay for infrastructure up front.
It works like this: A bond would be taken out to pay for roads, etc. — in this case about $2.5 million, though Schlessinger said it is negotiable.
Meanwhile, the current assessed value of the property would be frozen, meaning the taxing bodies would continue to collect what they are getting now in taxes. Those who buy and develop the parcels would pay increased taxes as the property value grows with the installation of the infrastructure.
The difference goes to pay off the bond. After a set amount of time, the taxing bodies would get the full amount and the roads would be deeded to the public.
Plans call for the property to be developed into a commercial and retail space, plus residential units and parkland. Giant grocery store and CVS pharmacy have signed on, allowing Schlessinger and partner Delta Development to secure a guarantee on the bond from the state.
Property value falls
Schlessinger said he needed the additional money to make the project work because the land has lost roughly 50 percent of its value since he bought it in 2006, meaning there’s not enough leverage to secure the $10 million needed to construct the necessary infrastructure on and off the property.
Included in the design are things like traffic signals at North 15th Street and Route 45 and sidewalks along St. Mary Street.
With federal grants and private funding, he has roughly $7.5 million, leading him and his partners to look at the TIF proposal.
The East Buffalo supervisors attended Tuesday’s meeting, talking about the work their planning commission has done to create a new zoning ordinance that would allow for the property’s redevelopment.
“We should actually look for ways to get behind this project and make it work,” Supervisor Jim Buck said.
Still, the county commissioners declined to even participate in the study committee, fearing it would just string Schlessinger and his partners along.
Really needed?
“If it was for something the county or township really needed,” Commissioner John Showers said. “I don’t know if the county really needs more retail. I know my wife might disagree.”
Additionally, the commissioners — particularly Boop — said he and his constituents viewed the TIF proposal as government assistance to business in an area where business should be standing on its own.
He cited several local developers who have paid for their own infrastructure, without government assistance. “I have to face these people,” he said, “when they ask me why’d I give some guys from New York tax money when we had to front our own money for our developments.”
