Greater Wilkes-Barre Chamber of Commerce President and CEO Wico van Genderen appeared before Luzerne County Council last week to pitch a proposal to pay $3.4 million in loan and real estate tax principal and receive forgiveness for $751,715 in penalties and interest.
Council is set to vote on the matter April 24.
The lion’s share of the debt — $3.23 million in principal and $719,164 in interest and penalties — is for past county community development loans to buy land. This money must return to the loan fund and cannot be used for county general fund operating expenses, officials said.
County Manager C. David Pedri told council the additional chamber payment would be added to a pot of $15 million underutilized loan funds the county is earmarking to municipalities for infrastructure improvements, primarily in low- and moderate-income areas.
The U.S. Department of Housing and Urban Development, or HUD, never pushed for penalties and interest to be charged on the loans the chamber obtained from the county, van Genderen said.
“What they expected were jobs and economic development,” van Genderen said. “I think we’ve met that obligation.”
The land purchases were in the Crestwood Industrial Park, Hanover Crossings Business Park and Hanover Industrial Estates. More than 14,000 area residents work in approximately 300 businesses in the three parks, and the development generates nearly $10 million in school, county and municipal real estate taxes annually, van Genderen said.
More jobs and tax revenue will be added under the proposal because the principal payment would be funded by selling the chamber’s last remaining parcels in the three parks to a developer who has a letter of intent to purchase, van Genderen said.
The chamber can’t proceed with a sales agreement until it knows if council will approve the forgiveness, he said.
Under the proposal, the county would receive $188,011 in delinquent real estate taxes and forgive $32,551 in tax interest and penalties. If approved, this payment could be used for operating expenses, capital projects or other general fund purposes as determined by council, Pedri said.
County Councilman Eugene Kelleher asked if the debt was inherited by van Genderen, who was hired to oversee the chamber more than three years ago.
“Correct, but it is an obligation we have,” van Genderen said.
The chamber owed $13 million when he took over with a plan to get out of the real estate business and refocus on economic development, job creation, workforce development and community business advocacy, he said.
“Now we’re in the home stretch with the county HUD debt, he said.
Councilman Stephen A. Urban told van Genderen he won’t vote for the $751,715 forgiveness without resolution of other chamber debt related to Hanover Industrial Estates that was not addressed in this package.
The chamber’s Greater Wilkes-Barre Industrial Fund was supposed to put $6,000 from each acre it sold into a special fund to pay for traffic improvements at that industrial park, which primarily falls in Hanover Township, under a 1993 agreement, county officials have said.
In 2011, county officials estimated the chamber owed $926,300. Chamber representatives had sought the county’s forgiveness at that time in exchange for the chamber’s commitment to fund necessary traffic-related improvements within five years. Urban, a prior commissioner, told van Genderen that request was not granted.
Past chamber officials have said the 1993 agreement gave their organization the option to reduce or eliminate the amount owed by applying credit from traffic improvements funded by outside sources, such as the state and federal government.
Van Genderen reiterated that position and said the chamber is addressing the 1993 agreement, possibly with a traffic study.
County commissioners had agreed to take over care of the industrial park’s roads in 1983, officials have said.
Councilwoman Linda McClosky Houck asked if the chamber would receive any revenue from the pending land sale.
“Every penny” from land shedding has been used to pay debt since van Genderen took over, he said.
“We have kept zero of that money,” he said, noting the chamber also will kick in $49,425 out of pocket, or the shortfall between the developer’s offer and principal owed.
The back taxes are associated with the former Poseidon Pools property in the Crestwood Industrial Park in Wright Township, officials said.
In response to a question from Councilman Harry Haas, van Genderen said the township and Crestwood School District also will be asked to forgive tax interest and penalties.