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Faced with the reality that tax breaks are a touchy request for elected officials, Greater Wilkes-Barre Chamber of Commerce President/CEO Wico van Genderen outlined what Luzerne County stands to gain by extending one.
The chamber is seeking a 10-year Keystone Opportunity Zone tax break extension on a troubled Wright Township property it wants to sell to Mericle Commercial Real Estate Services for a new construction project. The chamber took possession of the contaminated 27.35-acre former Poseidon Pools property in the Crestwood Industrial Park in 1999 after the prior owner went bankrupt.
Pitching the extension to county council last week, van Genderen said the chamber would use all sales proceeds to pay back real estate taxes and the remaining $925,040 it owes the county community development department for a loan provided to help with environmental cleanup and site development.
The delinquent taxes owed to the county, township and Crestwood School District total $1.6 million with penalties and interest dating back to the years 1994 through 1999, before chamber ownership.
Van Genderen is proposing paying the approximately $430,000 in principal to the three taxing bodies, which would require forgiveness of interest and penalties tacked on over the years.
The property was not listed in tax sales because the chamber had a 1999 agreement with the county to halt auctioning as long as the chamber paid toward the debt annually, officials have said. If the property had been listed, it was unlikely a buyer would have surfaced to pay all the taxes and address environmental issues, they had said.
Before Poseidon, the site had been occupied by the Eberhard Faber plant, reports said.
The tax break extension also would help attract a tenant to the speculative building Mericle plans to construct, create jobs, facilitate reuse of a site that has been unproductive for two decades and provide a “fresh anchor” at an entrance to the industrial park, van Genderen said.
He noted the park includes six companies formerly in the KOZ program that remained after their breaks expired and now contribute to the county tax base: Cornell Iron Works, Sealy Component Group, PepsiCo, AEP Industries, Mission Foods and Cardinal Glass.
Council approval is required for the chamber to seek state clearance for the extension. The school board and township already approved the request, and council plans to vote Sept. 10.
A few citizens spoke against the extension. Saylorsburg resident Jason Carr told council he was denied a request to waive approximately $140 in interest and penalties on one of around 30 properties he owns in the county due to a mailing address issue.
Carr said he believes development of the Crestwood site, if viable, would still proceed without a break.
“I hope the council represents all the citizens of Luzerne County and not just the special interests,” Carr said.
The current tax break on the property expires the end of this year, and the extension through 2029 would provide full real estate tax forgiveness and exemption from some other taxes.
Mericle Chief Operating Officer Lew Sebia told council attracting quality employers without a tax incentive is “really an uphill battle.” The company will “aggressively market” the site, particularly because it is assuming risk building a speculative structure before a tenant is lined up, he said.
The company plans to invest $6 million on construction of a new more than 200,000-square-foot industrial building expected to create 170 jobs, the chamber said.
Before a sale can proceed, the chamber must resolve some regulatory issues to obtain final clearance from the state Department of Environmental Protection (DEP). The chamber demolished the rundown Poseidon structure and has invested more than $2 million in environmental mediation work at the site, it said.
Mericle President Robert Mericle said his company has performed additional testing and monitoring and is awaiting a DEP determination on whether development can proceed and, if so, when. A requirement for extended monitoring could delay a project for two years.
Council Vice Chairwoman Jane Walsh Waitkus said she was “very happy” Mericle was willing to make the investment in the township and asked van Genderen the amount of back taxes that would be paid to the county.
Van Genderen said the county’s portion would be around $140,000, while the payments would be approximately $270,000 to the school district and $20,000 to the township.