Allentown
64° F
Clear
Clear

Hamilton Crossings TIF can proceed w/o Lehigh County support

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Mar 13 2014 10:45:15 AM CDT
Updated On: Mar 14 2014 11:47:57 AM CDT

Hamilton Crossings

ALLENTOWN, Pa. -

Developers of the Hamilton Crossings shopping center in Lower Macungie Township do not need Lehigh County’s participation in a tax increment financing plan, county commissioner Percy Dougherty told his colleagues during their Wednesday night meeting.

Dougherty’s comments raised some skeptical eyebrows, but were later confirmed by both county Executive Thomas Muller and Atty. John Lushis, solicitor for the Lehigh County Industrial Development Authority, which developed the Hamilton Crossings TIF.

Dougherty said East Penn School Board and Lower Macungie commissioners are so in favor of the Hamilton Crossings project that “they don’t need our approval to go forward.”

For nearly a year, the Hamilton Crossings TIF plan has been presented as an all-or-nothing deal. All three local governing bodies – the township, count and school district -- had to “opt in” for the plan to proceed.

The actual plan states that Pennsylvania law requires the Hamilton Crossings TIF plan “be submitted for consideration and approval by all local governing bodies, in this case Lower Macungie Township, East Penn School District, and the County of
Lehigh.”

But the plan does not state the approval of all three governing bodies is needed for a TIF to proceed.

It also does not address what happens if one of them votes no, as Lehigh County commissioners did in June 2013, when they rejected the TIF by a 6-3 vote.

Lisa Scheller, chairwoman of the nine commissioners, said a request could be made to county commissioners that the TIF be reaffirmed “hopefully with a zero percent tax incentive from the county.”

She added: “The TIF cannot be approved without the county, but what they ask could be variable.”

But Dougherty said many people are under a misunderstanding that all three municipal bodies must approve the TIF.

“They don’t,” said Dougherty. “One body, the school board by itself, could approve it and that part would go through. So it’s not contingent on all three political units agreeing.”

“Are you sure of that?” asked Scheller. Dougherty said he was sure.

But he added the issue is so important that the county’s legal staff should give commissioners an independent legal opinion confirming his position. He said he will request that opinion.

Beyond confirming that Dougherty is right, both Muller and Lushis, who wrote the TIF plan, declined further comment Wednesday night.

In April 2013, the same month the industrial development authority approved the TIF plan, Lushis told county commissioners the Hamilton Crossings project could indeed legally move forward without the county’s involvement in a TIF.

But he also said all three government entities had to opt in for the plan to be financially successful and that it would not go forward if all three did not approve it.

The problem at the time was East Penn School District did not want to go forward as the sole participant in the TIF because “politically it would not work.”

East Penn School Board voted 6-2 for the TIF in May 2013.

Lushis had explained East Penn would be the sole participant if the county did not participate because Lower Macungie collected no property taxes from its residents and businesses.

However, that changed in January, when Lower Macungie implemented a property tax for the first time in 12 years.

When that tax was approved by a 3-2 vote, township manager Bruce Fosselman stressed it was not being imposed as any kind of incentive for the Hamilton Crossings project.

At least three of the five Lower Macungie Township commissioners are on record supporting the Hamilton Crossings TIF.

Pennsylvania’s TIF law would allow the developers to use 50 percent of increased property taxes from the shopping center to pay for infrastructure improvements for up to 20 years, rather than the county, township and school district immediately collecting 100 percent of dramatically increased property taxes.

As recently as last month, Hamilton Crossings’ developers publicly said what they have been saying all along: that they cannot build the $140-million project -- which would include a Costco, Whole Foods and Target -- without a TIF to help pay $7 million worth of public road, stormwater and utility improvements at the 63-acre site.

Dougherty indicated all the TIF funding should be used “for regional highway improvements that are going to help everybody, rather than go into the pocket of the developer.”

Hamilton Crossings would be built on both sides of Krocks Road, between Hamilton Boulevard and Route 222. Officials have been waiting for PennDOT to weigh in on the project’s impact on Route 222.

Emmaus resident John Donches, who opposes the TIF, asked county commissioners about its status during their meeting Wednesday night.

“Everybody was under the impression all three had to say yea,” said Donches. “Now all of a sudden, this is the first time that anybody in public said that it didn’t have to be voted on by all three.”

Muller has said he intends to bring the TIF proposal back to county commissioners for reconsideration and another vote.

Commissioner Michael Schware said it was supposed to come back in February, then in March. He added: “I was expecting it at this meeting.”

Daniel McCarthy, the county’s new director of administration, told commissioners he does not know about the administration’s intentions regarding the TIF.

“If it comes before you again, I hope you stick with it and say no again,” Donches told commissioners.

Donches doesn’t think it’s right that the Hamilton Crossings developers keep saying they will pull out of the project if they don’t get the TIF.

He doesn’t understand why they keep spending hours working on their plans with Lower Macungie planners. “They’re moving ahead,” said Donches. “There is no way that they’re going to pull out of this.”

Dougherty agreed, saying: “There is no way the developer is going to go away. They’re not using blackmail. They’ve put so much into that project already.”

Donches said Muller recently told the East Penn School Board that “they’re working on a side deal.”

Commissioner Vic Mazziotti, who served on the Hamilton Crossings TIF committee, told Donches he has heard nothing about any side deal.

“I don’t know if any of the other commissioners are involved in those discussions,” said Mazziotti. “If they are, I’d love to hear it.”

“Nobody has discussed it with me either,” said Dougherty, who served on that TIF committee with Mazziotti.

Dougherty said the possibility of the TIF moving forward without all three municipal bodies opting in had been discussed during meetings of the TIF committee, which were not open to the public.

Dougherty said it was a ruling presented to the TIF committee by the lawyer representing the authority, presumably Lushis.

But Mazziotti said he did not recall that.

Mazziotti did recall that the three municipal bodies could have different percentages of property taxes from the shopping center diverted to the TIF – “the county percentage could be zero, for example, and the school district could have a different one.”

Lushis, says the LCIDA is in the process of reviewing and evaluating the entire situation with its TIF consultant. The Authority will decide its next move in a few weeks, he said.