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The stout, brick Stegmaier Building in Wilkes-Barre – a property assessed at more than $4 million – generates tax revenue for the city each year, but not a penny goes to Luzerne County or the local school district.
Why?
Because the city apparently owns the ground beneath the structure, which means the site is tax-exempt.
Except, as far as the city is concerned, it’s not.
Confused?
Join the club.
In an article by reporter Jennifer Learn-Andes in Sunday’s edition of the Times Leader, a former city mayor and other sources claimed ignorance as to the origins of a long-term lease agreement with building owner Welles Street Associates II, of Philadelphia. The lease, signed by then-mayor Thomas McGroarty and recorded in December 1996, seemingly makes the site tax-exempt for about 30 years after the building’s 1998 renovation, with automatic, decades-long extensions to follow.
The office place today houses several federal government tenants, including branch offices of the Social Security Administration, the Internal Revenue Service and Small Business Administration.
Then-U.S. Rep. Paul Kanjorski, a longtime champion of the Stegmaier’s restoration and who once had a district office there, had announced plans to fix up the structure in June 1995. At the time, the U.S. Postal Service was expected to own and develop the site, Kanjorski said.
As it turned out, a firm called Keating Development, then based in Bala Cynwyd, partnered with Welles Street Associates to complete the dilapidated brewery’s transformation into modern office.
At current millage rates, if the Stegmaier Building was on Luzerne County’s tax rolls, the county would have received about $25,000 this year. The Wilkes-Barre Area School District stood to collect almost $69,000 this year.
Someone needs to supply satisfactory answers as to why Wilkes-Barre, which handles its own assessments for municipal taxes, has been tapping the Stegmaier, but other entities have not. And what was the logic behind the city’s unusual lease agreement?