Land assessed at $429,800 was sold for $11 million this week by the nonprofit Earth Conservancy for a warehouse project, according to deeds recorded in Luzerne County.
The buyer, TC Metro Development, Inc., then turned around the same day and sold the land in Hanover Township to a property trust company for $18.2 million, records show.
The Conshohocken-based TC Metro is a subsidiary of the Texas-based Trammell Crow Co., which recently convinced taxing bodies to extend the Keystone Opportunity Zone tax break on the property to allow construction of a distribution center that should employ 800.
County Councilman Stephen A. Urban said the purchase prices illustrate the need for higher assessments when land is reclaimed for future development.
As a concession for the tax break, Trammell Crow agreed to pay around $10,000 annually for a decade in lieu of property taxes on the land, based on the assessment.
Urban publicly questioned why the county did not increase the assessment of the land after Earth Conservancy spent $10 million reclaiming the site to make it more attractive to potential developers. A higher assessment could have convinced Trammell Crow to pay more in lieu of taxes, he said.
But mine reclamation isn’t cited in the law as a permissible cause for revaluing land with no structures, according to county Assistant Solicitor David Schwager.
Raw land can be revalued in a countywide reassessment because all properties are examined, preventing random “spot assessments.” However, county officials have no plans to conduct a reassessment at this time, saying sales statistics indicate most values are still within accuracy standards.
Tracts for future development projects can be revalued by the assessor’s office based on the addition of infrastructure such as sewer and water lines after a subdivision is recorded and the first lot is sold, Schwager said.
Earth Conservancy Executive Director Mike Dziak said that did not apply in this case because the new owner will install water and sewer lines and submit a subdivision plan.
Urban said he is continuing to research the law.
“The assessments are supposed to reflect the actual value. In my opinion, this is outrageous. The taxpayers took a hit on this,” Urban said.
He also believes the tax-break extension contributed to the $7 million increase when the property was resold by TC Metro.
Trammell Crow representative Andrew Mele, a principal with the company, could not be reached for comment Friday but has said the project would not happen without the tax-break extension because the incentive is available in other locations.
TC Metro sold the land to KTR Property Trust III, also called KTR NE PA LLC, which develops and owns real estate.
Dziak said the $11 million sale will allow his nonprofit to repay loans that funded the $10 million work filling deep mine pits and contouring land to eliminate ponds and prevent runoff.
Earth Conservancy spent $31 million reclaiming 1,600 acres since the nonprofit was formed around 20 years ago, he said.
The Hanover Township site would remain an eyesore and safety concern without Earth Conservancy’s involvement, he said.
“A normal investor or businessman wouldn’t do all this reclamation work. It’s a good thing for us and the community to have that land leaned up and developed for economic purposes and jobs,” Dziak said.
Earth Conservancy owns another 1,600 to 2,000 acres that must be reclaimed, he said. A key focus will be more than 1,000 acres that will be more accessible when the state completes the South Valley Parkway, a new highway connecting Route 29 and Kosciuszko Street near Luzerne County Community College, he said. The highway project will be funded by the state and is in final design.