Will the Hamilton Crossings shopping center project soon collapse like a house of cards?
It could happen:
If the Lehigh Valley Planning Commission makes a recommendation against the $140-million project Thursday night.
And if Lehigh County's commissioners use that LVPC recommendation to vote against a tax increment financing plan for the project in June.
And if the developers really do walk away from the project if they don't get TIF support, as they repeatedly have maintained they will do.
But it’s still too soon to say goodbye Costco and the rest of Hamilton Crossings.
The LVPC board could go against the recommendation of its own staff by embracing the project. And the county commissioners could decide to support the Hamilton Crossings TIF no matter what LVPC recommends.
“This is becoming like a real high stakes game of poker,” said Atty. John Lushis, solicitor to the Lehigh County Industrial Development Authority, which created and would administer the TIF.
Lushis believes Hamilton Crossing’s developers will have no choice but to walk away if they don’t get the TIF, because they repeatedly have said they would do just that. “If you are telling people publicly that you need something in order to do a project or you’re not going to do it, and then you do it anyway, what kind of message does that send about credibility?”
Despite presentations by Hamilton Crossings’ developers, LVPC's staff is not backing off on its objections to the 63-acre project, which is planned on both sides of Krocks Road between Hamilton Boulevard and Route 222 in Lower Macungie Township.
Based on those objections, for the second time LVPC's comprehensive planning committee is making a recommendation against the project to LVPC's full board. The board is expected to vote on that recommendation when it meets at 7 p.m. Thursday.
On May 22, county commissioners unanimously agreed to defer voting on the TIF plan until their June 12 meeting. They want to know LVPC's position on Hamilton Crossings before they vote.
“If the county commissioners don’t approve the project, it’s over,” said Lushis. “The school board has said it won’t do this project alone.”
On May 13, East Penn School Board became the first of the three local taxing bodies to embrace the TIF plan, with a 6-2 vote.
Lower Macungie commissioners, who are expected to approve the plan, won’t vote until after the county commissioners vote on June 12.
The TIF plan will collapse unless it is approved all three local government entities.
If the three agree, for up to 20 years they will give up 50 percent of increased property tax revenue coming from the shopping center – which will include a Costco and a Target.
Lower Macungie won’t immediately give up any tax revenue because it currently does not collect property tax from its residents and businesses, although that could change in future years.
Money given up by the municipalities will be used to pay debt on infrastructure improvements intended to benefit the public around the shopping center. That includes $11 million in road improvements, $4 million in storm water improvements and $1 million in utility upgrades. The three governing bodies’ TIF contributions to help cover those costs will total no more than $7 million.
LVPC’s staff position
“We can’t kill the project, we only make recommendations based on our comprehensive plan,” said Michael Kaiser, LVPC’s long-time executive director.
Kaiser explained LVPC’s staff has problems with the TIF plan and with an access lane the developers plan to build on the eastbound side of Route 222, to help people coming and going at Hamilton Crossings.
“They are using TIF to finance a lot of this stuff,” said Kaiser. “We’re not in favor of that.”
Both Kaiser and Joseph Gurinko, LVPC’s chief transportation planner, said it should be the financial responsibility of the developers, not the public, to pay for traffic and other infrastructure improvements to reduce impacts created by Hamilton Crossings.
“Our position is the developer ought to be paying for its impacts,” said Kaiser. “But that’s not our official position until the planning commission votes.”
Gurinko said the developers are requesting $6.4 million from the state Department of Transportation to build that access road, plus they want TIF money to widen and improve Krocks Road, with traffic signals at the shopping center’s entrances.
Gurinko said even if that access road is built, the developers still anticipate traffic back-ups on Route 222.
Kaiser said the section of Route 222 that bypasses Wescosville and Trexlertown was built in 2007 for $140 million –the same price being put on Hamilton Crossings. He said it was built to relieve growing congestion caused by excessive development along Hamilton Boulevard. “That road was designed to move traffic.”
The LVPC director said when PennDOT built that section of Route 222, it paid compensation to property owners along the highway in exchange for them giving up access with new intersections or entrance roads.
“The public already paid property owners to restrict access to it, so what are we doing here?” asked Kaiser. “If we do this once, others along Route 222 will want the same thing.”
Second time before LVPC
LVPC was prepared to make a recommendation on Hamilton Crossings in late April, only days after its comprehensive planning committee recommended a negative vote.
But rather than voting against the shopping center on April 25, LVPC’s board agreed to delay action until it could further review the project with developers Tim Harrison and Jeremy Fogel.
“We haven’t changed our position on it,” said Kaiser Wednesday.
Harrison declined comment on the hurdles facing his project and Fogel could not be reached Wednesday night.
County commissioner Percy Dougherty, who serves on LVPC’s board, has predicted LVPC probably will make a recommendation against Hamilton Crossings, because the Route 222 bypass was not designed by PennDOT to handle additional traffic created by future development.
“LVPC is not going to approve this project,” predicted Lushis. “But LVPC is really only an advisory organization.”
Lower Macungie and the commissioners
While the county commissioners intend to give weight to LVPC’s opinion, LVPC is reviewing the Hamilton Crossings plan primarily so it can make a recommendation to Lower Macungie Township. The Lower Macungie Planning Commission will consider LVPC’s review before it makes a recommendation on the plan to the township commissioners, who must give the project final approval. Lushis predicted Lower Macungie will not follow LVPC’s recommendations.
Lushis said if a county commissioner is looking for a pretext or an excuse to vote against Hamilton Crossings, LVPC’s recommendation will provide that excuse. “They can say: ‘Gee, I was in favor of this project until I saw the negative recommendation from the planning commission’. But they may have intended to vote against it all along.”
The upscale Hamilton Crossings will have the Lehigh Valley’s first and only Costco, a Target, an unidentified “major national high-end food store” and other stores and restaurants. Its more than 590,000 square feet of retail space will be surrounded by parking lots for 2,500 vehicles.
Developers hope construction of Hamilton Crossings will begin by September and be completed by the fall of 2014.