The Arena Hub Plaza’s real estate tax bill has increased nearly half a million dollars due to a reverse appeal arguing the old assessment was too low, county court records show.
As a result of the Wilkes-Barre Township shopping center’s $19 million assessment increase, owner TFP Limited must pay a combined $1.43 million in real estate taxes to the township, Luzerne County and Wilkes-Barre Area School District. It’s an increase of $489,808 based on current tax rates.
School district Solicitor Raymond Wendolowski filed the reverse appeal in 2014 as part of an ongoing effort focused on larger commercial parcels, saying at the time that taxing bodies should not be forced to live with under-assessed properties until the county performs another reassessment of all values.
Wendolowski said Monday that both sides spent a “significant period of time” sharing information, and he described TFP representatives as “very cooperative.”
“It wasn’t an easy negotiation, but clearly they were willing to negotiate in good process,” he said. “They are now paying what we believe is a fair share, relieving the burden on other taxpayers already paying their fair share.”
TFP’s increase to a new assessment of $55.74 million applies to two retail parcels totaling 58.4 acres. One tract houses the Lowe’s home improvement store, and the other includes most of the commercial businesses in the plaza complex.
The new value was set through a settlement stipulation.
TFP representative Robert S. Tamburro said he wanted to reach a settlement agreement without having to go through a court proceeding, and he thanked his attorney, Francis Hoegen, for his assistance.
“We’re happy that we resolved it, and we’re ready to move on,” Tamburro said.
The amount of tax revenue generated by the complex shows the wisdom of a past tax-diversion program that funded infrastructure needed to develop his parcels and others in the surrounding area, said Tamburro. The Arena Hub also provides jobs and improves quality of life, he said.
“Up and down the line, it’s a big economic boost to have a facility like that in the community,” said Tamburro.
Because assessment decisions — higher or lower — date to the time a challenge was filed, TFP also agreed to pay increased taxes from 2015 forward, the court order said.
The assessments of the Rite Aid stores in Plains Township and Wilkes-Barre also recently rose due to reverse appeals initiated by Wendolowski and the school district in 2014, court records show.
Owned by Cole RA Plains PA LLC, the store on River Street in Plains will now be assessed at $4.1 million, which is a $2.6 million increase. The company’s real estate tax bill is rising from $37,788 to $105,705.
The assessment of the Wilkes-Barre Rite Aid, owned by S&F Motel Co. LLC, increased from $957,400 to $2.5 million, records show.
Major reduction for plant
Despite these tax-base gains, an unusually high reverse-appeal increase imposed on a Hazle Township cocoa product manufacturing plant in 2016 recently was reduced, records show.
To the surprise of some observers, the county assessment appeals board had agreed in 2016 to increase the value of the Cargill Cocoa and Chocolate building in Hazle Township by $47.8 million in response to a reverse appeal filed by Wendolowski on behalf of the Hazleton Area School District.
The company contested the increase, which raised its assessment to $65 million with no building footprint change.
Ambrosia US Newco LLC, which is affiliated with Cargill, bought the cocoa plant on 74 acres for $65.1 million in July 2015 from Archer Daniels.
Attorney Hoegen, who also represented Cargill, has said the purchase price had no correlation to the property’s fair market value because it was part of a bulk purchase of Archer Daniels’ global chocolate business. When individual allocations in such large-scale purchases are split up on deeds, the amounts assigned to each piece of real estate often are not based on actual real estate values, he has said.
A recent court stipulation said the property will now be valued at $23 million.
At $65 million, the tax bill would be $1.1 million under current tax rates. With the new value of $23 million, the combined tax bill is $397,470.
Located in the Humboldt Industrial Park, the Cargill property has been taxed on the land only due to a tax break, but the structure will become taxable in 2019, officials have said.
Wendolowski noted Monday the new value is still a significant increase from the property’s original assessment of $17.2 million before the reverse appeal. The final value resulted from a lengthy negotiation process that included site visits and other due diligence, he said.
“The amount established by the settlement stipulation is a good number for both the taxpayer and taxing authority and likely represents the fair market value,” Wendolowski said.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.