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Lehigh County Commissioners shoot down TIF

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Jun 26 2013 08:28:20 PM CDT
Updated On: Jun 27 2013 10:29:40 AM CDT

Hamilton Crossings TIF gets voted down

ALLENTOWN, Pa. -

Lehigh County commissioners voted 6-3 against a tax increment financing plan for the proposed Hamilton Crossings shopping center in Lower Macungie Township.

That Wednesday night vote may kill the $140-million project -- which would include a Costco, Whole Foods and Target -- because the developers repeatedly have stated they cannot build it without a TIF to help pay for public road, storm water and utility improvements at the 63-acre site.

The financing plan needed the support of the county, township and East Penn School District to succeed, according to TIF proponents. It already has the support of the township and school district.

A disappointed Hamilton Crossings developer Jeremy Fogel called the commissioners’ vote “a huge setback. We’ve got to rethink our whole strategy.”

Asked if the vote will kill the project, Fogel said: “We need those funds. That’s a fact.”

Tim Harrison, Fogel’s partner in the project, declined to comment after the vote.
But before commissioners voted, Harrison told them: “The project needs this TIF. It is what separates a financeable, doable project from what is absolutely not financeable and not doable.”

In late May, Harrison told the Lehigh Valley Planning Commission: “Without the TIF, there is no project. Without the county, there is no TIF.”

“The proposed shopping center, as presented, is definitely dead,” declared Commissioner Percy Dougherty, one of the three who voted for the TIF plan.

Dougherty said Hamilton Crossings was intended to be an upscale “lifestyle center” similar to the Promenade Shops in Upper Saucon Township.

He suggested the project might come back “in a different incarnation. It’s my worry that the developer will try to cut corners and come back with something that is not as good. I’m afraid that if they’re going to do this, they’re going to have to find commensurate cuts in the project.”

Dougherty, a Republican, is the only Lower Macungie resident on the nine-member board and one of two commissioners who served on a Hamilton Crossings TIF committee.

Surprise votes

The commissioners’ vote was unusual because it did not split along party lines (there are seven Republicans and two Democrats) or the frequent 5-4 split with the conservative “reform” commissioners in the majority.

The first surprise was that Republican Thomas Creighton supported the TIF.
“I’m convinced the development will not happen unless the TIF is approved,” said Creighton.

Also surprising was that Democrat Daniel McCarthy and moderate Republican Brad Osborne voted against the TIF.

McCarthy did not comment on his position before the vote.

Osborne did comment, saying his decision would be made on an intellectual level rather than an emotional one, but he did not reveal how he would be voting.

Osborne declined to explain his negative vote after the meeting.

But McCarthy did explain why he voted no: “I came to the conclusion this project is likely to happen even without Lehigh County participating in the TIF. They’ll do the project without the TIF.

“I know the developer says no, but I’ve seen these projects resurrect themselves.”

McCarthy said Hamilton Crossings is planned in an excellent location and has three excellent retail corporations coming in.

A township issue?

Before the vote, Creighton said county government is overextending its authority by essentially voting on a land development issue, saying that is for Lower Macungie’s elected officials to decide.

“They know what’s best for their township. Both the township and the school district are in support of the TIF. I will be voting in support of the TIF also. It’s a win-win-win for the school district, township and county.”

Creighton indicated he does not like when the state and federal government try to impose mandates on the county, “so why should we feel any different when the county is trying to mandate things on Lower Macungie Township? Small government is what makes the best government.”

Creighton also said the TIF uses no current Lehigh County taxpayers’ money. “All the money used in the TIF is generated from the developer.”

But Commissioner Michael Schware argued county taxpayers are being asked to pay for what is a township issue. He said no county assets will be improved by Hamilton Crossings and that “the township should pick up the tab.”

Lower Macungie Manager Bruce Fosselman and Ron Eichenberg, president of the township commissioners, were at the meeting but declined to comment after the vote.

Last week, the five township commissioners unanimously voted to send a letter to the county commissioners that encouraged them to approve the Hamilton Crossings TIF.

The East Penn School Board voted 6-2 for the TIF plan in May. Lower Macungie commissioners were going to vote last for TIF approval, after the county commissioners’ vote.

If the county commissioners had opted into the TIF plan, the county and school district would have given up 50 percent of increased property taxes generated by the shopping center for 20 years. (Lower Macungie currently does not collect any property taxes.)

Commissioner Scott Ott, the Republican candidate for county executive, got the best laugh of the evening when he said: “I’m wondering why we don’t cut everybody’s tax bill by 50 percent…which I would like to make a motion for later.”

Commissioner Vic Mazziotti explained the shopping center would have paid all of its property taxes, but 50 percent of that tax money would have been transferred to the Lehigh County Industrial Development Authority to pay debt on bonds used to finance infrastructure improvements.

Crunching numbers

Schware said the county’s share of the $7-million TIF is $1.1 million, adding it is much more appropriate for Lower Macungie’s taxpayers to pay that.

Schware and Mazziotti said that $7-million contribution to the project would balloon to almost $15 million when interest and fees are included.

“We’re getting roughly $10,000 a year from this land right now,” said Commissioner David Jones, the other Democrat on the board. He added when Hamilton Crossings is completed, the county will get $137,000 a year.

Said Dougherty: “Over the 20 years, we will be collecting over $2.6 million here at the county.” He also noted the Hamilton Crossing plan includes road and storm water improvements that will not be done without the project.

But Commissioner Lisa Scheller said if Hamilton Crossings goes forward without a TIF, the county will get $270,000 more in taxes every year.

Scheller, chairwoman of the nine commissioners, also did not say how she would vote beforehand. After the meeting, she said she agreed with Schware that county tax dollars should not be involved in the project.

Mazziotti, who served with Dougherty on the TIF committee, said commissioners were not voting to approve or disapprove the Hamilton Crossings project. “We don’t have the authority to do that.” He also said it was not a vote to support or not support the school district or the township.

Public input

Scheller noted Wednesday’s meeting marked the fifth time the Hamilton Crossings TIF plan was before the commissioners. They learned about the project on April 24, had a first reading of a proposed TIF ordinance on May 8 and debated the issue but deferred voting on May 22 and again on June 12.

Because some of those previous meetings lasted very long, with the agreement of her colleagues Scheller imposed time limits on anyone speaking Wednesday night: three minutes for interested parties if they had something new to contribute, two minutes for others to state their opinions and three minutes for each commissioner to speak.

Twenty-seven people stood to address commissioners for more than an hour. Twice as many spoke for the TIF as spoke against it.

Several stressed Hamilton Crossings will mean jobs, including construction jobs, for Lehigh Valley workers.

But Julian Stolz of Emmaus said the TIF “is nothing more than corporate welfare” for multi-million-dollar corporations and out-of-town developers. Joe Hilliard of Allentown maintained Hamilton Crossings will nearly double the amount of vacant retail space in the Lehigh Valley. He said vacancies reduce property values.

Hamilton Crossings is proposed on both sides of Krocks Road between Hamilton Boulevard and Route 222.

Dougherty reported that he learned from the Pennsylvania Department of Transportation that Hamilton Crossings is just one of 33 projects planned along the Route 222 corridor.

He said PennDOT officials also told him that section of the highway will require a $70-million “fix-up.”

The $140-million Route 222 bypass around Trexlertown and Wescosville opened in 2007.