For the first time since Luzerne County’s 2012 switch to a home rule government, a proposal to consider a tax diversion known as a TIF may come before county council, in this case to fund infrastructure improvements leading to the former Valley Crest Nursing Home site in Plains Township.
Intense grilling is expected due to past issues with such diversions in county government.
Short for Tax Incremental Financing, TIFs use real estate tax revenue from a new development project to pay off loans for roadwork or other infrastructure tied to that project. Taxing bodies must agree to temporarily give up the revenue and approve a plan specifying what must occur for the sacrificed revenue to start coming to them, such as repayment of the infrastructure loan.
An inherited 1998 TIF linked to new development along Highland Park Boulevard and at the Arena Hub Plaza in Wilkes-Barre Township has generated complaints from county council members since they voted to close it out in September 2015.
While this program’s funding of infrastructure improvements on Highland Park and Mundy and Coal streets was deemed a success for attracting new stores, restaurants and hotels, council members have bemoaned delays obtaining the county’s share of approximately $2.88 million left after the TIF loan was repaid.
The county is estimated by some to be entitled to $1.2 million, but opinions differ based on wording of the original TIF agreement. The Wilkes-Barre Area School District and Wilkes-Barre Township also gave up tax revenue for the project.
County Manager C. David Pedri said Tuesday the parties are awaiting a final PennDOT review of project expenses.
“Hopefully, we’re pretty close to resolving this,” Pedri said.
Another inherited TIF had been criticized for its tie to a corruption probe.
Former county commissioner Greg Skrepenak and former county Redevelopment Authority director Allen Bellas had both pleaded guilty to accepting bribes in exchange for their support securing a TIF for Jenkins Township Properties Courtyards Inc.’s 13-acre Insignia Point residential project in Jenkins Township, according to published reports.
Jenkins Township Properties later sold the site.
In addition to the Insignia project, one other residential TIF is still active for the Stauffer Pointe development in Pittston Township, the authority said. Both TIF agreements date to 2008 and 2009 and won’t expire until 2025 and 2026, it said.
County Council Chairman Tim McGinley said Tuesday he would personally be hesitant to pursue another TIF until the Highland Park one is resolved.
A thorough presentation from the county administration on the pros and cons of TIFs and how to protect the county’s interests also would be necessary because the process is new under home rule, McGinley said.
A representative of Pennsylvania-based consulting company Mullin and Lonergan Associates provided an initial briefing on the proposed Valley Crest TIF by phone during Tuesday’s county Redevelopment Authority meeting, said authority Executive Director Andrew Reilly.
The authority was approached and has been involved in past TIFs because the 1990 state law allowing the tax diversion program specified authorities must handle them, Reilly said. The authority would receive an administrative fee.
Authority members did not vote Tuesday on whether to act as administrative agent. Instead, the authority administration will seek additional information from Mullin and Lonergan for discussion at the February authority meeting, when the board may vote on whether to take on the potential project, he said.
If the authority proceeds, a TIF committee with representatives from the county, Wilkes-Barre Area School District and Plains Township also must convene to identify a TIF district to be revitalized, the infrastructure work that would be completed and the amount of the loan funded by tax revenue.
Representatives of Tamburro R.E. Development and Management LLC, which bought the 62.3-acre Valley Crest property from the county for $2.075 million in 2015, have said they were working with PennDOT on possible traffic changes where the main Valley Crest access road connects to Route 315.
The Tamburro company has said it plans to demolish the nursing home to make way for a new residential and commercial project. Reilly said the consultant indicated the portion of the project involving the former nursing home would be funded by the owner and not be part of the TIF.
“The TIF would be solely for transportation and public infrastructure improvements,” Reilly said.
Even if a committee is formed, Reilly stressed no TIF would take effect unless the three taxing bodies approve the committee’s proposed plan down the road.
“Ultimately, the full board of each taxing body would have to decide if it was good for their jurisdiction,” he said.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.