Sales tax adds cost to arena paving project; bill to be split three ways

By Jerry Lynott - [email protected] | February 14th, 2018 5:14 pm - updated: 9:13 pm.

WILKES-BARRE TWP. — A mix-up that excluded the state sales tax from the recent paving project at the Mohegan Sun Arena at Casey Plaza will add $22,050 to the cost.

But the contractor, American Asphalt of Shavertown, won’t be responsible for paying the full amount.

According to a deal approved Wednesday, the tax bill will be split three ways with the Luzerne County Convention Center that oversees the arena, American Asphalt and Borton-Lawson engineers and architects, based in Plains Township — each paying $7,350.

Authority member Donna Cupinski said Borton-Lawson was told when it was preparing the bid documents that the authority was exempt from paying the 6 percent sales tax.

“However the contractor is not sales-tax exempt. So they did not include sales tax in their bid,” Cupinski said.

With the tax included, American Asphalt remained the low bidder, added authority chairman Ed Harry. “So we didn’t violate anything as far as that goes,” Harry said. In July, the authority awarded American Asphalt the contract to pave and repair the lot at a cost of $1,343,879.

Cupinski explained the cost sharing was done to keep everyone happy. After conferring with authority solicitor Joseph Persico, American Asphalt and Borton-Lawson were approached about a deal proposed by authority member Frank Conyngham.

“Since we are good partners with all the entities involved and we didn’t really want to point fingers and place blame, we talked about splitting the the cost of the sales and use tax three ways,” Cupinski said.

Eight of the 11 authority members who attended Wednesday’s meeting voted unanimously for the deal.

In other business:

• Bob Cavalieri, regional vice president for stadiums and arenas with SMG, the company that manages the arena for the authority, provided an update on the sale of the management company to Onex, a private equity firm based in Toronto, Canada.

SMG’s management contract for the arena expires this year and authority members worried what effect the sale would have on the local site.

“SMG doesn’t change at all. It’s just a stock purchase,” Cavalieri said.

The sale closed about a week-and-a-half ago, Cavalieri said, with no noticeable change at SMG’s corporate office in West Conshohocken. He didn’t expect any and would provide more information next month after a corporate meeting, he said.

The Mohegan Sun Arena at Casey Plaza in Wilkes-Barre Township. Mohegan Sun Arena at Casey Plaza in Wilkes-Barre Township. Sean McKeag file photo | Times Leader

By Jerry Lynott

[email protected]

Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.