The possibility that East Penn School District might go it alone in helping finance the proposed Hamilton Crossings shopping center via a tax increment financing plan – TIF -- was raised by Lower Macungie Township officials Thursday night.
They said it will be up to the shopping center’s developers to decide if they want to proceed with a TIF that will give them less money than the $7 million they anticipated getting from the school district and Lehigh County.
Township officials assume the school district won’t back out even if it is the only local government body financially supporting the project through the TIF.
For months, the Hamilton Crossings TIF plan has been presented as an all-or-nothing deal. All three local governing bodies – the township, school district and county -- had to opt in for the plan to proceed.
And Hamilton Crossings’ developers repeatedly have said they cannot build the $140-million project -- which would include a Costco, Whole Foods and Target -- without a TIF to help pay for public road, storm water and utility improvements at the 63-acre site.
“The developer is saying ‘If I don’t the get money I need, I’m out of here’,” said Ron Eichenberg, president of the five township commissioners. “We’re speaking hopefully that he finds another way. That’s his decision.”
It seemed the county commissioners killed the deal on June 26, when they rejected the TIF by a 6-3 vote. State law requires a TIF plan must be submitted “for consideration and approval by all three local governing bodies.”
Yet Lower Macungie commissioners, who already are on the record unanimously supporting the TIF, still plan to hold a public hearing on approving a Tax Increment Finance District for Hamilton Crossings at their Sept. 5 township meeting.
Lower Macungie currently does not collect real estate taxes, so it would give up no revenue by participating in a TIF. But 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.
Together the county and school district would have contributed about $7 million to the project, with the greatest share coming from the school district.
Eichenberg raised the possibility the TIF could go ahead if the developers are willing to accept only the portion that would be contributed by East Penn School District.
“All three participants don’t have to participate,” maintained township commissioner James Lancsek, who served on a TIF advisory committee when the Lehigh County Industrial Development Authority was creating the Hamilton Crossings TIF.
“The developer has to make a decision,” said Eichenberg. “Does he need the county’s money or not?”
Lancsek said the developer has to initiate any plan to go ahead with TIF support only from East Penn.
East Penn School Board president Chuck Ballard said his board has heard nothing about that being an option for the project. “It could be true, but I’d have to check it out,” said Ballard, adding he would have to consult with the school district’s solicitor.
East Penn School Board approved the Hamilton Crossings TIF by a 6-2 vote on May 13.
Added Ballard: “We voted for a plan as presented by the Lehigh County Industrial Development Authority. I would presume if the plan has changed, it would be a whole new thing I’d have to talk to the solicitor about.”
Lancsek and Eichenberg don’t think the school district will back out because it already approved the TIF. Lancsek doesn’t think members of the East Penn School Board would change their minds, as long as the developer does not want to change the 50 percent contribution.
In April, Atty. John Lushis, solicitor for the Industrial Development Authority, told county commissioners Hamilton Crossings legally could move forward without the county participating in the TIF. But he also predicted the school district would not go forward as the sole participant, because “politically that would not work.”
In May, Lushis told Channel 69 News: “If the county commissioners don’t approve the project, it’s over. The school board has said it won’t do this project alone.”
Lushis could not be reached for comment after Thursday night’s township meeting. Nor could Jeremy Fogel, spokesman for the developers.
Lancsek suggested the developers also could go back to the county commissioners with a new proposal, one that would require the county to give up less than 50 percent of increased property tax revenue from the shopping center.
“The percentages don’t have to be the same for everybody,” said Lancsek.
Eichenberg said Lower Macungie is moving forward to approve the TIF district “just in case the developer is going to go ahead, so we’re not holding him up.”
According to the agenda of Thursday night’s township meeting, Lower Macungie will vote to approve a tax increment finance district on Sept. 5. But previously Eichenberg said the township will hold a public hearing on the TIF that night.
According to the state’s TIF law, the township must wait at least three weeks after that public hearing to adopt a resolution or ordinance creating a Hamilton Crossings TIF district.
Hamilton Crossings is planned on both sides of Krocks Road, between Hamilton Boulevard and Route 222 in Lower Macungie.
The developers initially hoped construction could begin by the end of this summer and that Hamilton Crossings would be completed by the autumn of 2014.
The shopping center’s owners would have paid all of its property taxes, but 50 percent of that tax money would have been transferred to the Industrial Development Authority to pay debt on bonds that are used to finance infrastructure improvements.