A proposed controversial second tax-break for a prominent Hanover Township property has been scaled back so it may be more palatable to on-the-fence Luzerne County Council members voting on the request Tuesday.
According to a comparison of original and revised county documents:
• The new version would end the break on Dec. 31, 2026, instead of 2027.
• Buildings constructed by 2017, or in time to receive the break for the maximum span of a decade, would not receive 100 percent off taxes the entire period as originally suggested. The latest proposal forgives 90 percent of the taxes in the ninth year and 80 percent in the 10th year.
• Property owner Missouri-based NorthPoint Development has agreed to deposit $100,000 in escrow to address the council’s complaints about a prior owner’s broken development promises. NorthPoint will get the money back if it submits a building permit application to the township within one year after the second tax break is approved. If not, the county gets to keep the money.
NorthPoint, which purchased the 172-acre tract in the Hanover Industrial Estates through a limited liability company for $15 million earlier this month, argued the additional Local Economic Revitalization Tax Assistance Act, or LERTA, break would help its plans to attract employer tenants at four structures it wants to build.
The site is considered a gateway property by local officials because it is visible from Interstate 81 and conveniently located off Route 29.
The Keystone Opportunity Zone (KOZ) break NorthPoint inherited at the New Commerce Boulevard site expires at the end of 2024.
All real estate taxes and most state taxes on tenants are forgiven under the KOZ, while only newly constructed buildings are exempt from real estate taxes under LERTA.
If NorthPoint constructs the first three structures in 2017 as planned, both tax breaks would kick in that year because the LERTA clock starts when a new property is valued by the county assessor’s office. However, the LERTA would not be utilized until the more beneficial KOZ expires.
At a recent work session, Councilman Harry Haas said he must be “really convinced” the additional break is justified to support it because he believes eight more years of the KOZ is a “good enough incentive” to prospective tenants.
“I just see this as government welfare for corporations,” said Haas, who also complained about prior owner Texas-based Trammell Crow Co.’s failure to follow through on plans to construct a new 800-employee distribution center at the site that was pitched when it obtained the KOZ extension.
NorthPoint representative Brent Miles said his company retains ownership of most of its holdings, owns about 25 million square feet of industrial space in the country and is “chomping at the bit” to start construction at the Hanover site.
“The sins of the past are washing on me a lot,” he said. “I hope people would look at us in a different light.”