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President of Giant Food stores opposes Hamilton Crossings TIF

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Jun 07 2013 04:44:29 AM CDT
Updated On: Jun 07 2013 09:31:17 AM CDT
Proposed Hamilton Crossings shopping center

Proposed Hamilton Crossings shopping center

LOWER MACUNGIE TWP., Pa. -

The solicitor for Lower Macungie Twp., Lehigh Co., dismissed as “disingenuous” a letter from the president of Giant Foods that urges township commissioners to reject tax increment financing for the proposed Hamilton Crossings shopping center.

The May 24 letter from Richard G. Herring, president of Carlisle-based Giant Food Stores, was discussed at Thursday night’s township meeting.

It was sent to the township before Hamilton Crossings developers announced this week that a Whole Foods Market will be the third anchor store in their $140-million shopping center, along with Costco and Target.

Giant has a grocery store along Hamilton Boulevard in Trexlertown, less than 2.5 miles from where the new shopping center is planned on 63 acres along Krocks Road between Hamilton Boulevard and Route 222.

A TIF to benefit Hamilton Crossings unfairly would penalize existing businesses in the area, including Giant, wrote Herring.

“While we welcome competition on a level playing field, establishing a TIF district would unfairly favor the new retail establishments at the expense of those established businesses that have played by the rules,” wrote the Giant president. “It is unfair for the board to pick and choose the winners and losers in this way.”

But Atty. Richard Somach, Lower Macungie’s solicitor, told commissioners Giant benefited from tax increment financing when it built a store in another township. For that reason, he called Herring’s letter “a little disingenuous.”

After Thursday’s meeting, Jeremy Fogel of the Goldenberg Group, one of Hamilton Crossing’s developers, said Giant is a tenant in Exeter Commons in Berks County near Reading, which was built with support from a TIF.

Somach told commissioners the letter from Giant’s president is disingenuous for another reason.

He said 15 or 20 years ago, when the Giant supermarket was at Trexler Mall, the Trexlertown Shopping Center was proposed by David Jaindl. Somach said a suit against the new shopping center was initiated “at Giant’s insistence” to prevent Redner’s, another grocery store chain, from coming in. He said that suit that went on for four years.

“You’ve got to call it what it is,” said Somach. “They’re doing this for competitive advantage.”

Giant’s store now is in Trexlertown Plaza Shopping Center, whose owners have been threatening legal action against local governing bodies that support TIF financing for Hamilton Crossings.

Those owners, Cedar Realty Trust, Inc., say they have invested more than $30 million to redevelop Trexlertown Plaza and Trexler Mall, which they also own, in the last three years.

But Sara Pandl, Lower Macungie’s planning and community development director, said those improvements were “a facelift --internal improvements that weren’t really eligible for a TIF because they were not funding any kind of public infrastructure. A lot of it was maintenance or just moving tenants around.”

Fogel of Hamilton Crossings maintained Cedar Realty has benefited from a similar financing program called ERG -- economic redevelopment and growth – at its Shore Mall in Egg Harbor Township, N.J. Fogel doesn’t understand why Cedar Realty and Giant are criticizing Hamilton Crossings for seeking a TIF “when they have used the same or similar programs on their projects.”

Pandl said she spoke with the lawyer representing Cedar Realty to assure him Lower Macungie also would support any grants or similar financial support they would seek for their two local shopping centers.

“And we should,” added commissioner Ryan Conrad. “They’re a great neighbor. They do a lot for our community."

But Conrad also said: “It’s kind of disappointing to get a letter like this.” He doesn’t understand why the township just received the letter now when it has been discussing Hamilton Crossings for years. “The timing is questionable. I think there is more to this letter than what meets the eye.”

Township officials did not know if Cedar Realty received any grants or other government benefits for its $30-million project at the two shopping centers.

If approved, the TIF plan will allow Hamilton Crossings’ developers to use up to 50 percent of the shopping center’s property taxes for up to 20 years, to help debt for infrastructure improvements – rather than all the property taxes going to local taxing bodies.

East Penn School Board already has approved the TIF plan. Lehigh County commissioners will vote on it at their next meeting Wednesday night.

If they vote against the TIF, they could kill the Hamilton Crossings project, because the developers maintain they can’t build it without the TIF.

Lower Macungie commissioners will vote on the TIF only if it first is approved by county commissioners.

Township manager Bruce Fosselman told Lower Macungie commissioners he will attend the county commissioners meeting next week “to express our support for this project.” He expects to be joined by other Lower Macungie and East Penn officials.

“I’ve had more people ask me when Costco is coming,” said Fosselman, adding Hamilton Crossings is the biggest issue people have asked him about in the five years he has been township manager. He also added: “I’ve not had one negative comment.”

The letter from the Giant president makes some of the same points made by Atty. Jonathan Hugg, Cedar Realty’s lawyer, who has spoken against the TIF before the East Penn School board, county commissioners and the Lehigh Valley Planning Commission.

Like Hugg, Herring questioned whether Hamilton Crossings meets requirements of the state’s Tax Increment Financing Act, which limits TIFs to blighted areas in need of redevelopment.

The 63-acre Hamilton Crossings site is a former open-pit iron ore mine. It contains thousands of tons of spongy waste material, called mine wash, in deep deposits that must be removed from the ground and dried.

Even then, the shopping center’s buildings cannot be constructed over those deposits. TIF money cannot be used for that mine wash remediation. It will only be used to make road, storm sewer and electric utility improvements.

Herring said the significant tax subsidies a TIF would give to Hamilton Crossings are not necessary “and are simply being requested to pad the developer’s bottom line.”

Also during the township meeting:

* Fosselman announced the Church Lane bridge, which has been closed for more than a year until repairs could be made, will reopen by noon Monday. The one-lane bridge crosses Norfolk Southern railroad tracks.

* The township will hire six crossing guards to work at Willow Lane Elementary School. They will work only two hours a day – one in the morning and one in the afternoon – when school is in session, at an hourly salary of $13.65.

Lower Macungie is splitting the cost of hiring the guards with the East Penn School District. “We’ll be paying for three guards,” said commissioner Roger C. Reis. The township will begin advertising to fill the positions next week and accept applications until July 12. Fosselman will interview applicants and background checks will be done on them.

* Based on bids, commissioners voted to pay Charles A. Higgins & Sons of Media $29,561 to install solar-powered flashing school zone signals along Willow Lane and Mill Creek Road at Willow Lane Elementary before school starts Aug. 22.

Commissioners also voted to pay F.A. Rohrbach of Allentown $104,786 for crosswalk and ADA ramp improvements around the school. All those improvements are being made in anticipation of more children walking to Willow Lane in the 2013-14 school year.

Township Engineer William Erdman said all the township’s off-site improvements should be completed before school starts. He praised the competency, reputation and qualifications of both contractors and said both are anxious to get started. He said that work should begin in three weeks.

* Erdman told commissioners East Penn School District intends to submit a revised plan for on-site safety improvements at Willow Lane. He said the district’s engineer has promised to get that plan to him in the next day or two.

Erdman hopes it will arrive in time to be reviewed by the commissioners’ planning committee at 4 p.m. next Thursday. If that happens, East Penn’s plan for Willow Lane could be before all five commissioners for approval by June 20. He expressed doubt that East Penn’s improvements will be completed before school starts.

At the meeting, commissioners also recognized and honored new Eagle Scout Robert Ross

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