County Says 'No' to Costco Project Tax Breaks

The Lehigh County Commissioners in a surprising 6-3 vote on Wednesday night shot down the controversial TIF plan created to finance the proposed Lower Macungie Township Hamilton Crossings shopping mall, according to The Morning Call, perhaps putting the arrival of the Lehigh Valley's first Costco store on hold indefinitely.

The project cannot happen without the TIF, according to Hamilton Crossings developer Jeremy Fogel, executive vice president of The Goldenberg Group. In a Patch Q&A prior to Wednesday’s county vote, Fogel said: “We have exhausted the search to identify other funding sources – the TIF represents the final source of funding to close the financial gap. We must have the TIF to make the project feasible.” 

In the past Fogel and his partners have said that costly geologic remediation made necessary by mining activity on the 63-acre property along Krocks Road make developing the parcel without the TIF impossible. The developer also told Patch that the Krocks Road location is the only one in the Lehigh Valley that Costco will consider. 

• Read more from the Patch Q&A with Hamilton Crossings developer Jeremy Fogel, executive vice president of The Goldenberg Group. 

Under the Tax Increment Financing plan, the government bodies that would have ultimately benefited from the tax revenue generated by Hamilton Crossings –East Penn School District and Lehigh County – needed to agree to give up 50 percent of those tax dollars for a 20-year period to help the developer get the project off the ground. 

In real terms, this would have meant that during those 20 years about $7 million in tax dollars would have been diverted to the developer to cover costs. On the flip side, East Penn would have taken in about $600,000 per year and the county about $135,000 per year on a property currently owned by the Diocese of Allentown that generates very little tax revenue. 

The school district approved the TIF plan last month. 

The county commissioners had tabled their vote on the TIF twice before Wednesday’s vote, stalling progress on the much-talked about development that would have brought the Lehigh Valley its first Costco in 2014, as well as noted retailers such as Whole Foods and Target. 

Once Lehigh County approved the TIF, the plan would have also needed approval from Lower Macungie Township in order to move forward.

The Lower Mac Board of Commissioners, at its last meeting, voted to send the county commissioners a letter advocating the TIF plan. In anticipation of Wednesday night’s vote, East Penn Superintendent of Schools Thomas L. Seidenberger this week received his board's blessing to send a similar letter to the county commissioners.