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10-year tax abatement approved for Dixie Cup redevelopment site

By Kevin Lechiski, WFMZ.com Reporter, news@wfmz.com
Published On: Dec 03 2012 10:35:26 PM CST
WILSON, Pa. -

An ambitious project to redevelop the former Dixie Cup plant with a mix of residential and commercial uses has gotten the okay for a 10-year property tax abatement from the Wilson Area School Board.

The school board during its Monday meeting voted 5-4 to endorse the property tax abatement as part of the developer’s application to the state government for inclusion in the Keystone Opportunity Zone (KOZ) program. The school district currently collects about $68,000 per year in taxes from the property’s owner, Wilson Park Ltd.

For the 630,000 square-foot vacant plant site to be considered for KOZ approval by the state, the school board, Borough Council and County Council must each endorse the abatement. Borough Council previously endorsed the abatement, and County Council has indicated it would if both the borough and school board okayed the measure.

Tentative plans being considered for the site include the construction of more than 200 apartments and commercial uses totaling between 150,000 and 200,000 square feet, said Joseph Reibman, a partner in Wilson Park Ltd.

Under the KOZ program, the redevelopment site would be exempt from paying property taxes for up to 10 years beginning on Jan. 1, 2014. Business and apartment tenants would be exempt from paying state and local income taxes during the 10-year KOZ period.

The four school board members who voted against supporting the tax abatement were Cindy Nester, Judith Herbstreith, Scott Wamsley and William Wallace.

Nester said she believes the KOZ would unfairly give tax exemptions to the property owner and tenants of the redevelopment site, at the expense of other taxpayers.

Wallace said he was concerned tax exemptions for apartment residents at the redevelopment site would create unfair apartment rental competition.

Reibman said the KOZ designation is critical to moving the project forward at swift pace.

“It will be very helpful financially to bring in tenants, especially commercial tenants,” he said.

The property tax abatement would end once construction phases within the project are deemed to be “significantly complete” the state Department of Community and Economic Development, which administers the KOZ program.

Reibman projects construction to begin next year and the first redevelopment phase ready for occupancy by the end of 2014.

Reibman said multiple investors have expressed interest in the project and he is confident the redevelopment will progress due to recent improvements in the financial and real estate markets.

The former Dixie Cup plant -- built in four stages between the 1920s and 1950s -- was originally set to be redeveloped with a mix of condominiums and apartments totaling 302 units, but that effort grinded to a halt in recent years when the real estate market “disintegrated before our eyes,” the owner recently said.

The latest proposal, estimated to cost between $50 million - $60 million, calls for 50-75 percent of the facility being redeveloped with one- and two-bedroom market-rate apartments. The remainder of the facility would be redeveloped with office and other commercial space, according to Reibman.

While the municipality, school district and county would lose out on taxes for up to 10 years, there would be much more to gain over the long-term future by allowing the abatement, Borough Council President Leonard Feinberg said during a previous board meeting.

“After 10 years, the value of a redeveloped building will be worth a lot more than it is now,” he said to the board back in October.

Student athletes honored
The board started off Monday’s regular meeting by honoring two high school student athletes’ championship performances during the fall season.

Collin Hagenbuch was recognized for becoming the school’s first District XI Golf Champion. Hangenbuch won the title by sinking a 7-foot par putt on the fourth hole of sudden death against the defending district champion.

Jaryd Flank was recognized for becoming the school’s first Colonial League Cross Country Champion in more than 30 years.

School board reorganizes
Immediately prior to convening Monday night’s regular meeting, the school board held its annual reorganization, at which time David Seiple was reappointed President and Linda Baskwell Vice President.

The board voted unanimously on both re-appointments.