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After debating pros and cons, a Luzerne County Council majority voted Tuesday to grant a tax break for a development project on 330 acres in Hanover Township and Nanticoke.
Missouri-based NorthPoint Development, which brought online pet-supply retailer Chewy.com to Hanover Township, sought the break for three new buildings — the largest 1.3 million square feet — it plans to construct on mine-scarred land near Luzerne County Community College.
The company will receive full real estate tax forgiveness on new construction — not the land — for seven years, 90 percent exemption in the eighth year, 80 percent in the ninth and 70 percent in the 10th and final year.
Council members Edward Brominski, Harry Haas and Stephen A. Urban voted against the tax break.
Urban argued the county already has enough warehouses, and “tying up all the real estate” with more will hamper future options for employer diversification. Most warehouses do not provide “living wages” or an abundance of management jobs, he said.
Haas said he cannot support seven years of full forgiveness and is uncomfortable selecting “winners and losers” to receive breaks.
“I think that hurts our free economy,” he said.
Brent Miles, NorthPoint’s economic development vice president, told county council other communities across the state and country are offering incentives. The county will miss out if it does not participate because prospective companies consider three main factors — taxes, transportation and the labor force, he said.
A break was warranted in this case, he said, because it will cost his company millions of dollars to grade the site and add utilities, sewer, water and roads.
Councilwoman Jane Walsh Waitkus said she won’t reject an opportunity to add jobs, and she asserted Chewy.com’s receipt of 4,000 applicants for its initial 1,000 jobs is “proof is in the pudding” that there’s a demand.
Miles had provided a low estimate of 1,300 to 1,500 jobs to be created at the new site but said it could be 2,000 to 3,000. He declined to speculate on the types of tenants or jobs that may be attracted because site marketing was on hold until the tax-break package was finalized.
Urban took issue with Miles’ previous public statement that the Chewy.com jobs pay between $15 and $22 per hour, saying he knows someone who started at $11.75 an hour. Miles said he was informed the average is $15 per hour.
Councilwoman Sheila Saidman believed the decision to approve the break was a “no-brainer” because taxing bodies haven’t received any revenue from the property in many years. NorthPoint is buying the land from the nonprofit Earth Conservancy.
New development at the site also will benefit small business in the area, she said.
“Yes we have to wait 10 years, but then we will get something,” Saidman said.
Warren Faust, president of the Northeastern Pennsylvania Building and Construction Trades Council, sought a commitment that NorthPoint would use qualified local companies for the new project, particularly since local residents will be sacrificing tax revenue to provide the break. NorthPoint used some local labor at the Chewy.com site but also hired contractors from other Pennsylvania regions or states, he said.
Miles said his company relied heavily on an out-of-state contractor for the Chewy.com project due to tight deadlines and its success on another NorthPoint project. While cost and experience must be considered, Miles said “we can always do better” increasing the use of local companies.
$25K settlement
In other business Tuesday, council approved a $25,000 settlement with Francis Lombardo to close out his 2011 litigation alleging he was assaulted by two county prison guards in 2009 and 2011 without provocation and that his requests for treatment were ignored by prison officials at that time.
The county won’t be on the hook for the settlement or additional legal fees because it met the $50,000 deductible at least a year ago, the solicitor’s office said.