Greater Wilkes-Barre Chamber proposes plan to close out its Luzerne County debt

By Jennifer Learn-Andes -
Wico van Genderen -

The Greater Wilkes-Barre Chamber of Commerce wants to settle its debt with Luzerne County by paying $3.4 million in principal and obtaining forgiveness for $751,715 in interest and penalties, according to Tuesday’s county council work session agenda.

Most of the debt stems from past loans to purchase land. Any loan repayments would go back into the county’s community development business development loan fund, which cannot be used for general fund operating expenses.

Also included in the repayment are delinquent taxes associated with the former Poseidon Pools property in the Crestwood Industrial Park in Wright Township, according to county officials and records.

The chamber assumed ownership of this property when the previous owner went bankrupt in the 1990s. Past chamber head Todd Vonderheid said in 2010 that the organization had inherited the tax debt and had a 1999 agreement with the county to keep the property out of back tax sales as long as it pays $10,000 a year. The chamber has been honoring that payment, according to tax claim representatives.

As of Friday, the chamber owed $1.55 million in combined school, county and local taxes from 1994 through 1999 on the Poseidon property, with interest and penalties tacked on.

The chamber has been working diligently in recent years to pay down its county debt, get out of the real estate business and make the organization a “transformative force” driving economic, entrepreneurial and workforce development, chamber Chief Executive Officer Wico van Genderen told county officials in an April 3 communication.

“We are now at an inflection point in which we can fully meet our obligations for the remaining principal debt we owe to the county,” van Genderen wrote.

Payment of the principal is now possible because the chamber has a letter of intent for a developer to buy its last remaining parcels in the Crestwood Industrial Park, Hanover Crossings Business Park and Hanover Industrial Estates, he wrote.

According to his agenda submission:

If county council approves the debt resolution agreement, the chamber will work with this developer to finalize a purchase agreement.

The proposed $3.4 million payment to the county would cover $3.237 million for past loans and $188,000 in county real estate taxes.

The organization is seeking forgiveness of all interest and penalties — $719,164 associated with loans and $32,550 tied to delinquent taxes.

Chamber documents also indicate it will be paying $423,300 to the Crestwood School District and $23,970 to Wright Township for taxes in addition to $18,040 to the township for a sewer easement.

County Manager C. David Pedri said he supports the agreement because it will resolve debt lingering for 20 years.

“They’re going to pay back every dime they borrowed,” he said.

Describing the payment of county obligations as a “milestone,” van Genderen’s letter said the industrial parks have left a “legacy” of value by attracting more than 12,000 jobs and 200 companies generating more than $9 million in local tax revenue annually.

Council may be more amenable to sacrificing interest on the loans for two reasons:

• Demand for loan funds has dwindled to the point that the county plans to use $15 million of the fund to provide grants to municipalities for infrastructure projects. The U.S. Department of Housing and Urban Development, or HUD, has been encouraging community development offices to reprogram large pools of unused funds instead of allowing the money to continue sitting unused in the bank.

• Getting the loans off the books may benefit the county in a still-pending HUD inquiry.

The federal agency had issued a directive in April 2014 requiring the county to put $10 million into the county’s loan fund because seven outstanding loans had not resulted in job creation, including four the chamber now wants to pay off. The county contested the order. HUD continues to monitor the situation but has not issued a final payment order.

Prior forgiveness

This isn’t the first forgiveness obtained by the chamber.

In 2016, county council voted to forgive $728,226 in community development loans so a $6.1 million downtown Wilkes-Barre redevelopment project linked to its Innovation Center @ Wilkes-Barre could proceed.

As part of the loan forgiveness, the chamber agreed to use its $2.6 million in proceeds from the Innovation Center sale to repay $1.7 million in outstanding county community development loans, $126,600 in back taxes and a $704,000 state loan.

The chamber had initially requested the county erase an additional $1 million in loans, but council members kept that debt intact after learning those loans were tied to other unrelated chamber projects and would not put the entire Wilkes-Barre development project at risk.

Van Genderen had told council at that time he was not sure his organization could scrape together enough revenue from land sales to repay the $1 million not forgiven.

Wico van Genderen van Genderen

By Jennifer Learn-Andes

If you go

Luzerne County Council’s work session will follow a 6 p.m. voting meeting Tuesday at the county courthouse on River Street in Wilkes-Barre.

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

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