Township, county don't agree on approach to tax abatement

Antrim Township supervisors are planning to vote on a revised Local Economic Revitalization Tax Assistance map at their next meeting, but they won't have the support of Franklin County commissioners.

"I support the township's intent in trying to develop support in the township, but my recommendation is for the county not to participate," said Commissioner Dave Keller. "Given our interpretation of LERTA zones, this map does not fall into the definition of the way LERTA is zoned."

LERTA history 

Created in 1977 and amended in 1988, the Pennsylvania Local Economic Revitalization Tax Assistance Act allows local government bodies to designate economically depressed areas to encourage new construction and improvements to deteriorated industrial, commercial and business properties, by allowing a reduction in property taxes over a period of up to 10 years.

Antrim Township adopted a LERTA in 2012 at the end of the recession to encourage economic development and compete with incentives offered by Maryland and West Virginia. In its current form, LERTA offers property tax cuts on business development or improvement for 10 years, with a 100 percent abatement the first year, declining in 10 percent increments annually.

Antrim’s LERTA program was enacted in August 2012, with a seven-year window of availability which expires next month, but allowed for three-year extensions. At that time, county officials declined to participate.

Recently, with increased competition from nearby areas and their upgraded incentive packages, Antrim officials approached both the Greencastle-Antrim School Board and county commissioners for continued support.

Earlier this year, G-ASD board voted in favor of a three-year LERTA extension to offer tax breaks to developers in certain parts of the township, but with some changes.

The expiring program schedule provided for a 100 percent tax abatement in the first year, 90 percent in the second, etc., so that in the final year the property owner would return to full tax responsibility. 

The new schedule provides for 95 percent tax break in the first year, 85 percent in the second, and so on.  The last two years would see a jump from 15 percent abatement to 0 percent. 

Developers who take advantage of LERTA must agree not to appeal their tax assessment within five years after their tax break ends.

Some of the properties benefitting from the current LERTA include Matrix/World Kitchen, Gate 7, Blaise Alexander, Sheetz, Greencastle Health Services and Eldorado Stone.

The county did not participate in the Antrim Township LERTA when it was first enacted and still isn't interested in getting on board.

Sticking points 

"My understanding of the law is the municipality determines the location of the zone," said Commissioner Bob Ziobrowski. "We have no flexibility in picking and choosing what's in that district."

But Antrim officials said they've asked for county input.

"Several times in the past, the commissioners expressed various concerns with how Antrim’s LERTA was structured.  I addressed one of those concerns by proposing a modified LERTA zone map that, in effect, reduced the number of properties included in the zone," said Township Administrator Brad Graham. "A number of industrial and commercial properties that have been in the LERTA zone but did not apply during the initial phase were removed from the zone.  The supervisors expressed their willingness to consider adding such properties back in if commissioners requested it. Those modifications were presented to the county commissioners."

But the revisions didn't satisfy the county board.

"From my read of the revised map, there's a very minor modification of the original zone," said Commissioner Dave Keller.

He cited Manitowoc, which is not included on the new LERTA map.

"It is conceivable that's an existing property that may, at some point, be in need of tax incentives," Keller said.

"They took out Manitowoc ... and added property north of Greencastle," added Ziobrowski. "What they added was raw land. Antrim Township has used the LERTA law as a tool for raw land. To me, that's not what the LERTA law was for. I am not in favor of supporting this particular map."

"The LERTA law was intended for communities like Chambersburg, Waynesboro and Greencastle that have older properties that need significant enhancement," said Commissioner Bob Thomas. "It's not an economic development tool. I would suggest LERTA is not intended for raw land."

But Graham said he thinks there may be some misunderstanding on how LERTA works.

"An important thing to note is that the abatement is only on improvements made on the property — new building construction, significant renovation or additions, etc — they are still responsible for the full tax responsibility on the real estate," he said. "Many people misunderstand this and errantly think that all the taxes are abated."

Graham said G-ASD officials presented findings showing the increasing financial benefit realized due to the increased tax revenue to the district resulting from the LERTA.

But Graham said the township isn't giving up on working together with the county.

"A disparity in interpretation of the guidelines for LERTA programs has resulted in the two governing bodies deciding differently," Graham said. "The township will continue to attempt to encourage the county’s participation in order to incentivize further commercial development."

Supervisors will vote on the LERTA at their July 23 meeting in the township building on Antrim Church Road. The meeting will begin at 7 p.m.