A proposed real estate tax break is coming before Luzerne County Council.
While such breaks often prompt criticism, officials in Hazle Township already supported the proposal because a portion of real estate taxes will be paid and the plastic storage bin company — IRIS USA — is creating 95 manufacturing jobs, township Supervisor Jim Montone said Friday.
“Everybody wants these jobs,” Montone said. “We hear all the time that all we do is bring in the warehousing jobs and where are the manufacturing jobs?”
The proposed tax break is permitted under the state’s Local Economic Revitalization Tax Assistance program, also known as LERTA, for deteriorated areas. Property owners approved by all three taxing bodies pay real estate taxes on the land but not new structures for 10 years.
However, this proposed LERTA is not as generous as many past ones that provided 100 percent exemption.
According to council agenda documents:
IRIS would receive full tax forgiveness the first year, but the exemption will be lowered to 90 percent in the second year and continue decreasing by 10 percent annually in subsequent years, ending with a 10 percent reduction in the tenth and final year.
Full taxes must be paid after a decade of exemption.
IRIS plans to buy land on Forest Road in the Humboldt Industrial Park from the Hazleton area economic development agency CAN DO Inc. to build a manufacturing facility, Montone said. He pointed to the purchase as evidence of the company’s commitment to remain in the area.
Township supervisors met with company heads months ago and were “very impressed,” Montone said. The firm will make and distribute its storage boxes, drawers and bins at the Humboldt site, he noted.
“We thought it was a good thing. It’s not like they’re coming in and paying nothing for 10 years,” explained Montone.
The CAN DO site is 46.8 acres and has full tax forgiveness that expires at the end of this year through a Keystone Opportunity Zone, or KOZ, according to online marketing information. A utility right-of-way cuts through the parcel, and there are several low-grade wetlands that CAN DO has started mitigating, it says.
While the new tax break won’t start until the new construction is assessed, IRIS must submit an application alerting the county assessor’s office that construction has started within 45 days after receiving a building permit. This application must be submitted within three years after county council’s resolution is approved granting the tax break.
The company must waive its right to appeal the property assessment during the tax break unless the new construction is assessed at more than $20 million, the proposed council resolution says.
A council majority last supported a LERTA one year ago for a 172-acre Hanover Township tract owned by Missouri-based NorthPoint Development. Because this property already has full KOZ exemption through 2024, the LERTA will kick in for 2025 and 2026, when the property owner will receive a discount of 80 percent instead of 100 percent for new construction. NorthPoint attracted online pet supply retailer Chewy.com to the site.
In addition to the NorthPoint property, 20 others have LERTA tax breaks that expire between 2018 and 2023 — most at the CenterPoint Commerce and Trade Park in Jenkins Township, according to the county assessment office.
Critics have maintained tax-break programs unfairly give select properties a government-funded competitive advantage, while supporters argue much of the development here wouldn’t exist without tools to attract employers and developers who are offered incentives in other states.