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Lehigh County commissioners hold off on deciding Hamilton Crossings TIF

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: May 23 2013 06:30:01 AM CDT

Lehigh County commissioners will wait until they hear from the Lehigh Valley Planning Commission before deciding the fate of tax increment financing for the Hamilton Crossings shopping center in Lower Macungie.

Acting on an appeal from a local carpenter, they also will ask developers of Hamilton Crossings to hire local labor to build the $140-million shopping center.

On Wednesday night, commissioners unanimously agreed to defer voting on the TIF plan until their June 12 meeting. They will invite an LVPC transportation expert to that meeting to explain the regional planning agency’s position on Hamilton Crossings.

A lawyer representing two Trexlertown shopping centers maintained commissioners unfairly will be subsidizing “a shiny new shopping center” and helping Hamilton Crossings “cannibalize the local retail economy” if they approve the TIF plan.

Atty. Jonathan Hugg said the commissioners’ proposed TIF ordinance is illegal because the state’s TIF law was written to address urban blight. Hugg argued the site of the proposed shopping center, where iron ore mining was done in the 19th and early 20th centuries, “is not urban and it’s not blight. It may be unattractive, but it is not a north Philadelphia ghetto. This is a field that used to be a mine.”

Hugg represents Cedar Realty Trust, Inc., owner of the nearby Trexler Mall and Trexlertown Plaza shopping centers along Hamilton Boulevard.

He told commissioners his client has invested $30 million in those two shopping centers in the last three years. “That’s been a great boon to the community in this down economy,” said Hugg. “What you would be doing by passing this bill is nullifying our investment.”

Hugg also said Hamilton Crossings’ developers already are trying to “entice away” tenants of his client’s two shopping centers. “We can’t compete with that,” he said. “That’s not economic development. That’s just cannibalizing the local retail economy.”

Hugg said his client’s shopping centers are not fully occupied now and will have even fewer businesses if its tenants are lured away to Hamilton Crossings.

He repeatedly said the county, East Penn School District and Lower Macungie unfairly will be picking the winner and the losers in the local economy if they adopt the TIF to help Hamilton Crossings, which will have a Costco and Target as its anchor stores. He claimed many other members of the local retail community feel the same way.

“If this is such a great development why do you need to help it?” asked Hugg. “Why isn’t it just built?”

Commissioner Percy Dougherty said he was worried about the impact on existing retail businesses, but was assured Hamilton Crossings will be such a large regional shopping center that other retail outlets also will benefit from all the people it will draw. Hugg said that’s unlikely.

Hugg made many of the same comments to East Penn School Board on May 13. He threatened East Penn with a lawsuit. But he was unable to stop the school board from voting 6-2, with one abstention, in support of the TIF plan that night.

Commissioner Michael Schware said he agreed with most of what Hugg said.

“It’s our duty to make sure there is a level playing field in the county,” said Schware.

“Competition is great. That’s the way America was built. And if they build a new shopping center with their own money, without a dollar of government funding, and they put you out of business, that’s on you to compete. But when we put tax dollars into it, we’re really skewing that and I think it’s wrong.”

Waiting for LVPC recommendation

Commissioners were scheduled to vote on the TIF plan Wednesday night, but were asked to defer action by Cindy Feinberg, the county’s community and economic development director, so they could learn the LVPC’s position on Hamilton Crossings before voting.

Feinberg told commissioners LVPC’s comprehensive planning committee will discuss the project on Tuesday and it will go before the full LVPC board for a decision two days later: on Thursday, May 30.

At their May 8 meeting, some county commissioners said they wanted to hear LVPC’s recommendation on the proposed development before they vote on the TIF plan.

That plan will divert 50 percent of real estate taxes that normally would go from the new shopping center to the county and East Penn School District for up to 20 years.

Lower Macungie currently does not collect real estates taxes, but may do so in the future.

That diverted money would help pay debt on multi-million-dollar infrastructure improvements around the 63-acre shopping center, which will be built on both sides of Krocks Road between Hamilton Boulevard and Route 222.

Dougherty said Hamilton Crossings’ developers also support the county commissioners delaying action, because the developers want to meet with LVPC to explain how their proposed improvements will address “many of the problems with traffic on the so-called bypass.” He said most of the TIF money will be used for road improvements.

Dougherty, who also serves on LVPC’s board, has predicted LVPC will make a recommendation against Hamilton Crossings, because the Route 222 bypass was not designed by the state Department of Transportation to handle the additional traffic.

LVPC was prepared to recommend against Hamilton Crossings in April, but decided to first get more information from the developers. LVPC’s comprehensive planning committee had recommended to the full LVPC board that the plan not be approved.

LVPC’s recommendation on the proposed development is primarily being done for Lower Macungie officials.

Lower Macungie commissioners were scheduled to vote on the TIF plan on June 6, but Dougherty said the county commissioners’ deferral until June 12 will delay that Lower Macungie vote because the township is required by law to vote last.

Minority opinion?

Schware said he’s probably in a minority, but maintained that 50 percent financial participation is way too high for Lehigh County and the county’s share “should probably be zero.”

“No county issue is being addressed here,” said Schware. “There’s no county road, there’s no county bridge, there’s no county drainage problem and there’s no county utility lines. So why should county taxpayers have to pay part of this bill?”

“Our financial participation in the TIF should be proportional to the true county issue that’s being addressed. I don’t think there is a county issue that’s being addressed. Just because the problem is in the county doesn’t mean county taxpayers have to pay for it.”

Dougherty recommended Joseph Gurinko, LVPC’s chief transportation planner, be asked to attend the June 12 commissioners meeting to explain LVPC’s recommendation before commissioners vote on the TIF plan.

Local construction jobs?

Lower Macungie resident Kevin Lewis, a carpenter for 13 years, asked how commissioners can guarantee local labor will be used to build Hamilton Crossings “if we’re giving up local tax dollars?”

Lewis wanted such a guarantee in the TIF agreement, but Dougherty explained that agreement was developed by the Lehigh County Industrial Development Authority and commissioners can only vote for or against it, not change it.

Lewis pushed for commissioners to make a recommendation to the LCIDA, but Dougherty indicated it may be too late to do that.

Commissioner Scott Ott recommended talking to the shopping center’s developers to determine their willingness to voluntarily hire local labor, “rather than as an external burden that we apply.” Dougherty moved that commissioners empower Lisa Scheller, their chairwoman, to send a letter to the developers encouraging local labor be used. That motion was passed unanimously.

Scheller stressed the commissioners’ action cannot require the developers to hire local labor “but it is showing our support that local labor be used.”

Developers have promised their project will create 495 construction jobs when work begins before the end of summer and 920 permanent jobs when Hamilton Crossings is completed in the autumn of 2014.