WILKES-BARRE — After more than an hour of discussion and criticism from several property owners, a Luzerne County Council majority voted Tuesday to grant a controversial Keystone Opportunity Zone tax break extension for a Wright Township property.
The Greater Wilkes-Barre Chamber of Commerce sought the 10-year real estate tax break extension for the 27.35-acre former Poseidon Pools property in the Crestwood Industrial Park so it can be sold to Mericle Commercial Real Estate Services, which plans to invest $6 million building a more than 200,000-square-foot speculative structure projected to create 170 jobs.
Eight council members supported the extension: Patrick Bilbow, Tim McGinley, Rick Morelli, Chris Perry, Sheila Saidman, Robert Schnee, Matthew Vough and Jane Walsh Waitkus.
The three in opposition: Harry Haas, Linda McClosky Houck and Stephen A. Urban.
Morelli said he respects arguments made by tax break opponents but believes attracting new businesses and jobs help the county.
“I think that this is a wise choice,” Morelli said, noting Mericle is “taking a big risk” building without a tenant locked in.
The area won’t attract companies without tax break incentives offered in competing markets, said Saidman. While some jobs added to the region’s inventory are considered low paying, Saidman said new employers offer opportunities for advancement.
Walsh Waitkus said job creation was a primary goal when she ran for council, and she can’t reject 170 new jobs.
Schnee said he did not meet Mericle President Robert Mericle until Tuesday night but believes the county should support the developer’s proven record attracting employers since 1985. The long-idle Crestwood site will create jobs that put food on tables, he said.
“My question is, ‘Where would the valley be without a guy like him?’” Schnee asked, praising Mericle for providing heavy equipment to save homes during record 2011 Susquehanna River flooding.
Bilbow said people working in the new jobs will spend money at area businesses.
McGinley said he appreciates Mericle’s willingness to invest private funds in a speculative structure and is confident “a lot of benefits will come down the road” from the resulting project.
Echoing arguments from citizen critics, Haas said the breaks mean officials are “picking winners and losers” by offering incentives to some parcels but not others.
“It just feels like a perpetual shell game,” he said of continued requests for breaks.
Urban said other businesses are creating jobs and expanding in the area without seeking breaks.
County Manager C. David Pedri also presented more details about a proposed $35.14 million borrowing package that would provide $20.7 million for a 911 emergency radio communication system upgrade, $1.8 million toward new paper-trail voting machines and $12.1 million to refinance high-interest debt.
The costs to issue the loan would be around $150,000, he said.
After reviewing submissions from four prospective lenders, the administration is heavily favoring a proposal that would provide a guaranteed 2.174 percent interest rate and charge a one-time $4,000 bank fee, he said. Lenders cannot be identified during the screening process, he said.
The county would save more than $2 million by refinancing the $12.1 million in old debt from 2008 and 2009 because that portion currently carries interest ranging from 6.75 to 8 percent, Pedri said.
Pedri said he prefers a bank loan because traditional bond borrowing is “extremely expensive” and has restrictions on the timing of potential future refinancing. The interest rate would be about 2.45 percent for a bond, he said.
As of June 30, the county owed about $272 million in principal and interest, records show.
Harrisburg-based Public Financial Management, the county’s financial adviser, was unable to attend Tuesday’s meeting but will present more specifics to council when the proposed borrowing ordinance is up for introduction Sept. 24, including an overview on all outstanding debt, Pedri said.
Under the administration’s proposed schedule, council would adopt the ordinance Oct. 7 so the county could settle the transaction and receive the funding Nov. 26.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.