East Penn Picks Members to Explore Costco Project Funding

East Penn School Board appoints members to Hamilton Crossings Tax Increment Financing Committee, despite one board member's concerns.

The East Penn School Board Monday night made a commitment to exploring a special funding option for the Costco project in Lower Macungie Township commonly known as a TIF by appointing two members and an alternate to be a part of a TIF committee.

The board appointed Superintendent Thomas Seidenberger and school board member Ken Bacher to the TIF committee, and Francee Fuller to serve as an alternate.

A TIF, which stands for Tax Increment Financing, is an economic tool that provides money for development of a site that requires a large amount of money to pay upfront costs. , faces pricey mine wash remediation and stormwater issues that must be addressed before it can move forward, according to developers.

School board member Julian Stolz voted against appointing any East Penn representatives to the TIF committee, stating that it is a case of “government interfering with business and the free market.”

Despite Stolz’s concerns, school board Chairman Charles Ballard emphasized that the committee will only explore the possibility of a permanent tax increment financing district for the proposed Hamilton Crossings shopping complex on Hamilton Boulevard.

Ultimately, Ballard said, East Penn’s representatives to the committee will “investigate whether or not it makes sense for East Penn to consider the TIF.”

The Goldenberg Group of Montgomery County has proposed a $100 million-plus shopping complex, to include Costco and Target. However, developer Jeremy Fogel of The Goldenberg Group has said that mine wash remediation and stormwater issues must be addressed before the complex can be completed.

When a TIF exists, according to state law, the taxing bodies – counties, municipalities and school districts – use a portion of tax revenue generated by the development for costs associated with building the project.

The TIF committee will be chaired by someone from the Lehigh County Industrial Development Authority, Ballard said. The committee must comprise representatives from the three political entities: Lehigh County, Lower Macungie Township and East Penn School Board.

The Lower Macungie Board of Commissioners appointed two representatives to the TIF committee in September: Township Manager Bruce Fosselman and Commissioner James Lanscek.

Fogel previously made a presentation to the school board. The Goldenberg Group is in partnership with Staten Island developer Tim Harrison on the Hamilton Crossings project.

The school board subsequently considered the situation and appointed its committee representatives Monday.

Stolz questioned whether the board was obligated to appoint anyone to the TIF committee. Board solicitor Marc Fisher said that decision was up to the board.

“This is picking market losers and winners, and giving preference to a business entity,” Stolz said. “We should not interfere with the free market.”

Bacher countered that the board is only putting representatives on the TIF committee to get the facts. “The time to debate the merits of the TIF will be when the details are known,” Bacher said.

School board member Alan Earnshaw agreed, adding, “If we have no voice, we have no choice” in the way the TIF develops.

The board voted 8-1 to appoint its representatives to the TIF committee, with Stolz casting the lone dissenting vote.

MS October 11, 2012 at 03:14 PM
I personally don't believe we should be using a TIF either, these developers are not poor, they have the money to make this project work, they just want to see how cheaply they can make it work....
MS October 11, 2012 at 03:16 PM
I drive this area daily, I live off of Brookside Road, I see the traffic in the morning and the evening back up to my house, which by the way is blocks from hamilton boulevard.....there is no left turn only signal at the light at Brookside and Hamilton, you can only get two cars through that light to turn left after 4pm and before 9am....all of this has to be looked into....traffic will be a nightmare if this isn't looked into, and this is coming from someone who is for the retail development
for real October 11, 2012 at 08:22 PM
The word I'm getting is this will create jobs, bring in big time tax revenue and all the developers want is a small % of the tax revenue to go towards the bonds. What is the problem? If this is the area by the new bypass develop it. If another developer is willing to fix the environment show us who that is. Tax relief and job creation is something that deserves support.
Ron Beitler October 12, 2012 at 01:44 PM
Missy thats what it means a deferral. But here is what makes it unique. Just my opinion. Right now the taxes on that property are about 7000 a year. Per acre thats nothing. When this project is built, it will be upwards of a million. So the rationale is that you defer the FUTURE taxes to pay for the bonds that enable this project to go from producing 7000 dollars to upwards of 1,000,000 dollars. Do I think the township/county/EPSD reps should vet this developer? Absolutely. Has the price been reduced? Have other funding mechanisms (not taxpayer money) been explored? Is the township getting every single smart growth bell and whistle possible? (Developer should pay for walking trail connecting Harvest Fields and the future greenway to the shopping center) What should the TIF length be? (as short as possible) ect. ect. ect. But in the end you have a public private partnership that will be be an absolute much needed cash machine for EPSD. In terms of what I care about. Smart Growth there are bigger fish to fry. (Jaindl property, Allen Organ property, continued low performing strip development of Old hamilton... ect. ect) I do have a fundamental issue with the grants. I see the creativity in the TIF. I hope the planning commission and BOC push this developer further with smart growth. There are some negatives. But I think the positives outweigh in this case. Though I am happy folks like Julian (who I sometimes agree with sometimes don't) are giving some pushback.
Ron Beitler October 12, 2012 at 01:48 PM
Big time tax revenue. Big time. Yes, we're deferring taxes. But they are taxes that right now do not exist. And yes, from my understanding it's a % of the taxes that go to the bonds. When it's all said and done from a TIF standpoint when this project is cooking it will immediately be a substantial net gain in taxes even with the % being taken out. Exactly how long the timeframe, exactly what % comes out... Thats what the TIF committee will explore. Now the state grants? I can't say enough. I disagree with grant money funding this project. TIF and grants... two different mechanisms in this case.


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