Antrim officials give industrial zones status to get tax breaks; school board also adopts LERTA
Following over two hours of testimony at a hearing Aug. 14, the Antrim Township Board of Supervisors enacted a resolution declaring all industrial zones part of a LERTA district.
Pennsylvania's Local Economic Revitalization Tax Assistance Act grants municipalities the power to set aside such districts, which then allows real estate taxing authorities to give tax abatements on a sliding scale in an effort to stimulate economic growth. The tax break applies to new construction and improvements on current properties.
Supervisors John Alleman, James Byers, Rick Baer, Fred Young III and Pat Heraty unanimously approved the measure.
Several developers explained why they wanted the classification, repeating information shared at a township meeting two weeks ago, and at the Greencastle-Antrim School Board meeting on Aug. 2. School board members present at the hearing were Tracy Baer, Ken Haines, Eric Holtzman, Mike Still and Melinda Cordell.
Gary Hans, vice president of acquisitions, spoke on behalf of Matrix Development Group, owner of the World Kitchen Property. He walked through the various criteria Antrim could use to justify LERTA. For his company, the key point was that the 1960 building, with expansions in 1975 and 1980, was now of defective design. The layout was unconventional for a warehouse, since trucks had to drive on local streets to access the shipping and loading docks at each end of the building. Some sections were unheated, so only had a dry sprinkler system.
"At over 50 years of age, this building is obsolete. It will be repositioned to compete with other properties," Hans said.
Matrix was negotiating with World Kitchen on a lease renewal, and planned to inject $10 million into improvements if the business stayed in Greencastle.
Pat Coggins, vice president of Atapco, pushed for LERTA status for their 250-acre Antrim Commons Business Park. He wanted a level playing field for all developers in Antrim.
"We're imploring you to include all the industrial land, and send out a message that Antrim Township is open for business."
Because Antrim was competing with incentive packages offered in Maryland and West Virginia, as well as along the I-81 corridor, Coggins pushed for the tax assistance to add to the advantage of the Norfolk Southern rail line presence.
Mike Ross, president of Franklin County Area Development Corporation, said that while Matrix was the genesis of the LERTA discussion over the past few weeks, the conversation had radiated to other properties. He supported adding industrial land to ensure fairness.
"Antrim has set a precedent by being aggressive," he said. "It, with help from the school district, built a water tower for Food Lion. That was cutting edge."
Byers expressed concern that farmland under LERTA was considered undesirable. "Convince me why vacant land qualifies. I'm having a problem with that."
Antrim solicitor John Lisko clarified that farmland in the industrial zones had been determined by Antrim in the 1980s as not the highest economic use of the land.
The fine points
Zoning officer Sylvia House had created a map showing the industrial zones spread across the township. The board had to identify any business exceptions it wanted included in the LERTA district prior to its vote. The members brainstormed and selected several properties to add to the list. They were the parts of Atapco not pictured, all of the Matrix property, Gibbles factory, Precision Manufacturing and Engineering, Mitchell Machine, Greencastle Bronze and Granite, Biltwood Powdercoat and Timber Mill Storage Shed. The six Greencastle businesses were non-conforming uses in zones other than industrial.
The Bowman property on Grindstone Hill Road was not included. Baer wanted it omitted since Antrim had put a road in the development and installed a water tower.
Young agreed. "That was their huge gift."
Lisko said if any properties were missed on the list, the owners could request another hearing.
The timeframe for the sunset provision was also established. Township administrator Brad Graham's proposed draft said companies had to apply for LERTA status within five years, and the township could extend the deadline by three years. Once the constuction was assessed by Franklin County for its tax rate, the abatement schedule would kick in for 10 years.
Coggins urged a seven-year limit, plus the extension cushion. "You have to give property owners enough time to make it meaningful. We need time to put deals together."
On a Heraty/Baer motion, the resolution passed 5-0, including the 7/3 sunset clause. It included a tax abatement schedule of no real estate taxes due in year one, 10 percent due in year two, through 90 percent due the last year. In year 11 the business would pay the full rate. Lisko reminded the group that the other taxing bodies, Franklin County and G-ASD, could set their own schedule if they adopted LERTA. Antim was not affected by the program since it does not levy real estate taxes currently.
School board also adopts LERTA
The Greencastle-Antrim School District jumped on the LERTA bandwagon, passing a resolution Aug. 16 to participate in Antrim Township's Local Economic Revitalization Tax Assistance program. Pennsylvania allows municipalities to establish districts of deteriorated areas eligible for real estate tax exemptions in an effort to stimulate economic growth. Antrim put its industrial zones into LERTA on Aug. 14. Therefore, new construction and improvements to existing businesses may be taxed at a lower rate, based on the 10-year schedule adopted by both entities.
On a Mike Still/Mike Shindle motion, the resolution passed unanimously, with Eric Holtzman, Ken Haines, Melinda Cordell, Joel Fridgen and Tracy Baer also supportive. William Thorne and Brian Hissong were absent.
Major developers have been asking for the status for the past several weeks. Pat Coggins, Atapco vice president of development, reiterated Thursday night his business park would most likely attract logistics and warehouse centers. "That's what we're chasing."
Atapco had had 26 serious conversations with companies over the past four years, and was now actively talking to nine. No contracts had yet been signed for a tenant.
He said up to 2,000 new jobs could be created when the 250-acre park was fully built. He didn't know how many people would move into the area as a result. Antrim and G-ASD's resolution called for no real estate tax the first year, then adding 10 percent for each of the next nine years. In the 11th year, LERTA clients would pay the full levy. Atapco tenants could generate $3 million in revenue by then, said Coggins.
Fridgen cautioned that new children in the school district could cause an imbalance in funding, even with the new business taxes rolling in after the sliding fee scale ended. Supt. Dr. C. Gregory Hoover announced that enrollment was up 100 students for 2012-13, the most ever, and there was maybe one vacant classroom in the whole district. Fridgen extended that concept into a talking point. If new businesses triggered 100 new kids per year for five years, that was an extra $6 million needed to pay for the education of the children, including this year's enrollees.
Shindle concurred, "If 100 new families move in and each has one child, the real estate tax won't cover the cost. The first couple years we have to come up with the money and the space to educate them."
"I support LERTA," said Fridgen, "but it's important to understand what it fully means. In the short-term, maybe five years, we have to be cognizant what will happen. If we say to the public, LERTA will solve our problems, it won't. Taxes may still go up."
He suggested a five year schedule of tax abatement rather than 10, to bring in the same amount of money more quickly. No one else was interested.
"It's more important to get the properties here. Ten percent of something is better than 100 percent of nothing," said Holtzman.
The vote on approving a policy on board members attending by electronic device was tabled, as some members didn't think there was enough clarity on what constituted a quorum. The primary purpose of the policy was to set the guidelines for a person who called in by telephone if he or she had to miss a meeting, but wanted to participate in discussions and votes. A question arose that six people might be on the phone, and only three physically present, so was that acceptable. Solicitor Jerry Weigle planned to look into the legalities, and board members generally wanted five to be physically in the room.
Cordell supported the phone-ins. People on vacation could choose whether they wanted to participate, but sometimes health or schedules or unanticipated events caused absences at meetings, she said.
The resignation of Jennifer Brown, high school English teacher, was accepted, with Rebecca Farson hired in her stead. Brittany Martin was also hired as half-time primary art longterm sub.