Tax break pitched for project at ex-Valley Crest Nursing Home site

Several Luzerne County Council members expressed support this week for a real estate tax break that will help complete a retail/entertainment project at the former county Valley Crest nursing home site in Plains Township.

Robert Tamburro, of Valley Crest Real Estate LP, told council the break is needed to help fund an estimated $18.7 million in off-site public highway upgrades required to address congestion and safely get motorists to his site off Route 315 on Valley Crest Boulevard, which is the same road serving the adjacent VA Medical Center.

“We intend to do something that’s first class on this property. We just need some help,” Tamburro said during a presentation at Tuesday’s council work session.

Council may schedule a vote on the request at its next meeting Dec. 5.

County Chief Solicitor Harry W. Skene asked Tamburro if his company must pay for the public highway enhancements, even though they will benefit all motorists in the busy commercial corridor that includes Mundy Street and the Cross Valley Expressway.

Tamburro said Valley Crest Real Estate must provide funding and complete the public highway work because it needs Pennsylvania Department of Transportation approval for a high-volume driveway necessary for the proposed 400,000-square-foot retail/entertainment complex. This level of access was not necessary when the county operated a nursing home at the site, he said. However, the planned private development maximizes use of the 62-acre site, which will be known as Valley Crest Commons, he said.

The state has awarded $8.9 million in grants toward the off-site highway improvements, with most requiring privately-funded matches, his presentation said. In addition, county council provided a $200,000 American Rescue Plan allocation for stormwater work.

Tamburro said his company’s traffic study demonstrated the highway corridor is “not operating efficiently,” likening it to a heart that is “not pumping as much blood as it should be,” leading to motorist delays.

He said he could make an argument the highway improvements are warranted with or without the Valley Crest project, but a PennDOT representative told him the state likely would not get to it for 25 years if the work wasn’t pushed as part of his development.

“Before we put a shovel in the ground, we have to figure out how to pay for this $18 million. It’s quite a task,” Tamburro said.

The work will include a new traffic light at Valley Crest Boulevard, lane reconfigurations, ramp alterations and changes to existing traffic signals, he said. This corridor spans sections of three municipalities — Wilkes-Barre and Plains and Wilkes-Barre townships, he said.

A past option involving roundabouts was scrapped.

In a presentation slide labeled “skin in the game,” Tamburro said his company invested and committed approximately $7 million in private funds on the project to date, including property acquisition, a traffic study, design of both the highway and on-site improvements and demolition of former nursing home structures.

Tamburro also noted his company will be responsible for any highway project overruns exceeding the $18.7 million estimate.

Specific request

The tax break request would be under the Local Economic Revitalization Tax Assistance (LERTA) program for blighted properties. As required under this program, the property owner must continue to pay real estate taxes on the land throughout the break and receive a discount on taxes for the new development, typically for a decade.

Valley Crest Real Estate is not seeking full forgiveness. Instead, it proposes 90% forgiveness on new construction the first five years, 85% in the sixth year, 80% in the seventh, 75% in the eighth, 70% in the ninth and 60% in the final year.

Based on a past assessor’s office estimate, he projects the new private development project will be valued at $72.5 million and generate $1.9 million in school, county and municipal real estate tax revenue when the LERTA expires. During the break, tax payments would range from $106,300 in the first year to $770,600 in the tenth year, his chart said.

The presentation is posted as an attachment to council’s Nov. 28 agenda at luzernecounty.org.

Councilman Kevin Lescavage told Tamburro he is “very much in favor” of granting the request because the county must be progressive to achieve progress, which is why he also is supporting a proposed county earmark toward a hotel/convention center project at the former Hotel Sterling site in downtown Wilkes-Barre.

Lescavage described projects completed by Tamburro’s family companies as “fantastic,” which includes the Arena Hub Plaza in Wilkes-Barre Township and The Pointe on Mundy, which is anchored by Hobby Lobby.

“We absolutely need those things in this area,” Lescavage said.

Councilman Brian Thornton agreed and thanked Tamburro, saying his presentation was in-depth and informative. He also said he believes the highway improvements will alleviate frustrating backup on Mundy Street.

Councilwoman LeeAnn McDermott asked when the project will begin. Tamburro said a firm schedule for the public highway work is still under review and must be coordinated with PennDOT, even though the developer is ultimately funding it.

Plains Township approved the first-phase work at the former Valley Crest site, and Tamburro said his company is seeking bids and has started clearing trees. The state has awarded $3.8 million in grants toward the on-site portion of the project through the Redevelopment Assistance Capital Program (RACP), which requires a 50% match, the presentation said.

“On-site is not the big lift. It’s the highway, and that’s what’s prompting us to come here and ask for the LERTA because it’s going to help us, especially in the first number of years getting this property on the ground,” Tamburro told council.

Councilman Carl Bienias III said he supports this tax incentive as he has for other revitalization projects that bring businesses and jobs to the area.

Councilman Chris Perry said the presentation and proposed project are “outstanding,” which is the same word he used for the company’s development contributions to the Wilkes-Barre area and county as a whole. Perry said he looks forward to seeing the finished product.

Councilman Stephen J. Urban also applauded the company’s work, saying county officials current and future “need to pay attention to those willing to invest” in the region. He said he is trying to push for funding at the former Hotel Sterling site because that project also involves a local developer.