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A proposed tax break for the 600 Waterfront project along the Susquehanna River in Plains Township is different than ones Luzerne County has granted over the years because it is creating “luxury living” apartments.
In comparison, the other breaks typically aimed to attract distribution centers and large-scale commercial operations promising lots of jobs, sometimes on mine-scarred parcels and in industrial park settings. Officials also have stressed this type of break under the state’s Local Economic Revitalization Tax Assistance Act, or LERTA, is for tracts in deteriorated areas.
But attorney Francis Hoegen, who is representing 600 Waterfront developer Ross Spengler, said the LERTA statute springs from the Urban Redevelopment Law, which includes a focus on parcels that are defective in design or arrangement.
“And so our position is that this is land along the river which is a challenge for anyone to build on,” Hoegen said. “Because of its proximity to the river and the nature of the land itself, it doesn’t lend itself to any development whatsoever without a public-private partnership.”
Located on 3.7 acres at the Waterfront Professional Park, the eight-story, mixed-use residential and commercial 600 Waterfront project is estimated to cost $28.65 million.
In Hoegen’s opinion, the request should be described as an incentive instead of a tax break because the project won’t materialize without it. The temporary relief in real estate tax payments is needed to obtain the loan and cement investors, Hoegen said, noting Spengler is taking “a lot of risk” investing his own funds and borrowing. LERTA tax breaks apply to the new construction portion only, which means the property owner — Spengler — must continue to pay taxes on the land.
Other area developers have used LERTA as a “catalyst to turn land which was otherwise unusable to land that’s usable” so they could build large structures that are drawing attention, including some along Interstate 81, he said.
“That’s the way we view this,” Hoegen said.
The upscale project would be visible from the busy Cross Valley Expressway and help boost the area’s image, in part by offering “alternatives to various residents that aren’t in this marketplace,” he said. Prospective employers or residents passing through the area may give the region “a second look” when they see the structure, which he described as “beautiful.”
Its location off the expressway is a “gateway to downtown Wilkes-Barre” leading to two major universities — Wilkes University and King’s College — and two large regional hospitals, Wilkes-Barre General and Geisinger South Wilkes-Barre, project descriptions say.
“A project of this magnitude helps transform a property like this into a premier property — something that will benefit the community at large today and 10 years from now when it starts paying taxes,” Hoegen said.
Tuesday’s county council work session agenda includes a discussion on the developer’s request to hold a public hearing on the matter, which is required to determine the boundaries of the potential break and other preliminary details. The township and Wilkes-Barre Area School District have agreed to participate in a hearing, Hoegen said.
Even if a hearing is held to advance the request, future further approval by all three taxing bodies would be needed for a break to take effect.
According to project documents submitted to county council:
Spengler has invested $2.8 million to make the site “shovel ready” and has committed another $1 million to date. Most of the project is expected to be funded with a $23 million loan.
A senior commercial real estate developer, Spengler has completed several types of commercial and residential projects over the past 35 years.
He bought the site that will house 600 Waterfront in 1998 and 2016 and had carved out sections for a McDonald’s and two office buildings that are nearly fully occupied. Spengler also installed a traffic light and built sewer and underground water runoff systems.
The 600 Waterfront structure would be 151,600 square feet and include both first-floor underground and surface parking. The 200-space parking garage will include a docking station for electric cars.
Luxury living
In addition to 22,000 square feet of class-A retail space on the second floor, 600 Waterfront will feature 102 “luxurious” apartments — studio and one- and two-bedroom — on the third-to-seventh floors and two rooftop penthouses.
The apartment units will range from 543- to 1,233 square feet with monthly rental rates averaging between $1,500 to $2,300 per month — $3,900 per month for the two penthouses.
Each apartment will include high-end finishes, and there will be an on-site health club, concierge service, coffee shop and salon. The rooftop will feature a putting green and community room with theater seating and a big-screen television.
A pavilion, grills, walking track and enclosed dog park will be on the grounds.
The development is expected to serve a growing market of young professionals and retirees “with a preference for luxury rental living,” the paperwork said, noting competing developments in neighboring communities have occupancy levels above 95 percent.
“Other comparative properties with high occupancy (an indication of strong demand) have less amenities and an inferior location to 600 Waterfront,” which is being constructed at “an ideal time,” it said.
Hoegen said a “substantial number” of people have already put down deposits on apartments. He plans to provide an update on the count at Tuesday’s work session, which follows a 6 p.m. voting meeting at the county courthouse on River Street in Wilkes-Barre.