Dallas City News

Luzerne County Council is set to vote Tuesday on a real estate tax break for two adjacent parcels in the Humboldt Industrial Park in Hazle Township.

It’s the first tax break since council reorganized in January, and a few of the newer council members have publicly expressed reservations.

Councilman Harry Haas, who returned to the county legislative body in January, addressed the subject when economic development came up during last week’s meeting of council’s strategic initiatives committee, which he chairs.

“I think that’s an old practice and an antiquated way of bringing development to an area,” Haas said of the proposed tax break.

The break would be under the Local Economic Revitalization Tax Assistance (LERTA) program for blighted properties, which means the property owner pays real estate taxes on the land throughout the break and receives a discount on taxes for the new development.

Hazleton Logistics plans to construct two industrial buildings totaling 802,732 square feet and is seeking a 90% abatement on new construction the first seven years, 80% in the eighth year, 70% in the ninth and 60% in the tenth and final year.

According to the presentation from Flint Development, the $75 million project on 66 acres of former mine-scarred land will accommodate market demand from a wide range of prospective warehousing, storage, distribution, manufacturing and other industrial users.

Advocates of LERTAs say such incentives are necessary to remain competitive and lock in new development that will significantly boost real estate tax revenue down the road for the county and other taxing bodies.

Councilwoman Brittany Stephenson, a strategic committee member who also took office in January, said during last week’s meeting she concurs with Haas and does not support the pending break.

“I don’t plan to move forward with that type of development. I don’t think it’s useful for the people of the county right now,” Stephenson said. “Although there are economical benefits, I think they are miniscule compared to the way we could be advancing the quality of life for the people who live here.”

Stephenson suggested setting a meeting with chambers of commerce to discuss economic development plans in-depth on a countywide level.

Strategic committee member Joanna Bryn Smith also supported a roundtable session with chambers to candidly address challenges and solutions. Smith said she wants job creation but questioned the need for more warehouse jobs.

During a council work session earlier this month, Councilman Kevin Lescavage, who is in his third year on council, said he is in favor of the Hazleton Logistics LERTA. However, he said he has become increasingly concerned about early morning Interstate 81 traffic back-up of trucks and vehicles heading to the Humboldt Industrial Park.

“I see that every morning, and it scares me that traffic gets pushed out onto the highway that far,” Lescavage said.

A Flint Development representative told council the company had an approved traffic study for the new development and did not anticipate traffic linked to the site would have a major impact on I-81 congestion.

In a follow-up inquiry, the Pennsylvania Department of Transportation said its district traffic unit will determine if there are any options to re-time traffic signals during the morning hours “and see if this helps the situation” referenced by Lescavage.

Tax revenue

Without the Hazleton Logistics project, annual real estate tax payments on the site are currently $18,355, including $6,158 to the county, Flint’s presentation said.

Under the proposed schedule, total payments to taxing bodies are projected to rise to $48,527 in the first year of the LERTA and to $369,400 in the tenth and final year. After the break expires, total tax payments are estimated at more than $1 million, including over $300,000 to the county, it said.

The LERTA already has been approved by Hazle Township and the Hazleton Area School District.

The exemption schedule — 90% the first seven years then 80%, 70% and 60% — was modeled after two provided last August to NorthPoint Development for projects in Hanover Township and Hazleton/Hazle Township and to JVI LLC for a project in Hazle and Sugarloaf Townships and West Hazleton.

NorthPoint also received the same percentage agreement in 2021 for a project in Hanover and Newport townships.

Haas told his colleagues the break would be “more palatable” if the percentage of abated taxes is lowered.

He said this region is “at the heart of trade” due to its location near major highways and markets.

“This is the place to be. I really don’t think we need any LERTA whatsoever because if you remember the old ‘build it they will come’ — they’re here,” Haas said. “You can see it on the ground.”

LERTA packages granted by council have been mixed from 2021 through 2023. The others in addition to those for NorthPoint and JVI, according to prior reports:

• Valley Crest Real Estate LP for a retail/entertainment project at the former county Valley Crest nursing home site in Plains Township: 90% forgiveness on new construction the first five years, 85% in the sixth year, 80% in the seventh, 75% in the eighth, 70% in the ninth and 60% in the final year.

• Mericle Commercial Real Estate Services for a 1,740-acre project on mine-scarred land primarily along Interstate 81 in Hazle Township to be named the Crossroads East Business Park with an emphasis on manufacturing: 100% exemption for a decade

• Bluecup Ventures Wilkes-Barre LLC for a warehouse project in Wilkes-Barre Township: 65% exemption for a decade.

• Hillwood Properties for the Hazleton Logistics Park in Hazleton: 90% off new construction the first five years then 80% in the sixth year, 60% in the seventh, 40% in the eighth, 20% in the ninth and no forgiveness in the tenth year.

• Bluecup Ventures for a three-warehouse project in Hazle Township — 65% exemption for a decade.

• Hazleton Creek Commerce Center Holdings LLC for a five-structure project in Hazleton and Hazle Township on land severely scarred from past surface and deep mining and two dumps: 100% for 10 years, with a $10,000 annual payment to the county in lieu of taxes throughout the break.

Tuesday’s 6 p.m. voting meeting is at the county courthouse on River Street in Wilkes-Barre. Instructions to attend remotely are posted under council’s online meetings link at luzernecounty.org.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.