Luzerne County Council advances real estate tax break ordinance

Luzerne County Council formally introduced an ordinance that would set reporting requirements and other parameters for future real estate tax-break requests.

Council Chairman Jimmy Sabatino said Wednesday he will schedule a required public hearing and final vote on the ordinance at the council’s Sept. 22 meeting.

The proposed ordinance outlines the extensive information that developers must submit in their applications and throughout the period during which a tax break is granted, including data on job creation and other economic impacts.

It was prompted by a desire to make evaluations consistent and provide a way for council and citizens to assess whether projects are worthy of such incentives, council members have said.

All 10 council members in attendance at Tuesday’s meeting agreed to keep the ordinance on the table, with Councilman John Lombardo absent.

County Community Planning and Economic Development Division Head Ted Ritsick told the council Tuesday the ordinance ensures the county has an established process and annual public reporting on each project.

“That enables the county to verify continued public value over the abatement window and track developers’ performance over time,” Ritsick said.

The data will also inform municipalities, which decide which sites are eligible for tax breaks in the first place, Ritsick said.

Breaks fall under the Local Economic Revitalization Tax Assistance (LERTA) program, which allows up to a decade of real estate tax discounts on new construction, but not the underlying land.

For a project to be eligible, municipalities must declare a site is distressed, Ritsick said, emphasizing counties and school districts have no authority over that decision.

Under the proposed county ordinance, failure to submit the required annual report may be considered by County Council if the same developer or affiliated entities submit future tax break requests, it said.

Several council members expressed interest in imposing ramifications for noncompliance.

Councilman Chris Belles said the “privilege” of receiving a tax break should be contingent upon “full cooperation,” submitting truthful, complete, and timely annual reports. He envisioned a situation in which a developer, eight years into a tax break, stops filing a report because “things do not look so hot” with the project.

At a minimum, Belles wants ordinance wording that would immediately cancel the break when a report is not filed. He sought a county law office opinion on whether the council can take it a step further and require entities in such situations to repay all prior county taxes that were forgiven.

Councilman Steve Coslett also suggested an ordinance penalty requiring developers to repay forgiven taxes if they profit from the break by selling the property before it expires.

“I really believe that after three or four years, if you’re going to sell a warehouse and you are going to make several million dollars, we should get what we gave you back,” Coslett said.

The council could then have the option to allow the new owner to continue receiving the remaining portion of the break approved for that project, Coslett said.

Sabatino said a legal review would also be needed for that proposed amendment.

County Chief Solicitor Harry W. Skene said wording on the ramifications of a sale could be included in contracts with each developer, rather than mandating it in the ordinance.

Ritsick suggested the council consider a separate follow-up ordinance or resolution focused on a sample template agreement that could be used as a foundation in negotiations with developers.

Sabatino said he supports alterations that will ensure developers are held accountable as long as the county is “within the framework of legality that will not put us in a position to be sued.”

Several citizens offered positive and negative feedback on the proposed ordinance and tax breaks in general. Sugarloaf Township: John Zola, who created the Alliance to Stop the Line group opposing the route of a PPL Electric Utilities transmission line in his area, passed out written recommendations for ordinance changes.

Council members agreed to review Zola’s submission and submit written amendments next week so they can be considered by colleagues and the law office before the Sept. 22 meeting.

Local journalism matters, and your support makes it possible. You can help sustain this work by making a donation or choosing one of our subscription options. Subscribers enjoy valuable benefits, including full access to our e-edition, a reduced ad experience on timesleader.com, and more.

Your support helps ensure independent, high-quality local news remains available today and for future generations. Thank you for standing with local journalism.

Click for subscription offers.