LOWER MACUNGIE TWP., Pa. - Much more than just a controversial tax increment financing plan for the long-proposed Hamilton Crossings shopping center may be decided by Lower Macungie Township commissioners in their next public meeting on June 5.
If a majority of commissioners do approve participating in the TIF plan at that meeting, they immediately will proceed to vote on whether they want to approve land development plans for the entire $139-million shopping center.
Affirmative votes will give a big green light for construction of a project first proposed to the township in April 2009.
The shopping center, which will include a Costco, Target and Whole Foods as its anchor stores, would be completed in the spring of 2016, on 63 acres along Krocks Road between Hamilton Boulevard and Route 222 in the township.
But if the commissioners do not approve Lower Macungie's participation the TIF, no votes will be taken on the land development plans, at the developers' request
In fact, the township's solicitor suggested those plans will become moot.
Standing before township commissioners Thursday night, Hamilton Crossings developer Tim Harrison again stressed the project cannot be financed without the TIF.
He also warned that East Penn School District officials might have second thoughts about participating in the TIF if Lower Macungie does not also participate.
While Harrison put the total price tag for the shopping center at $139 million, he explained much of that investment is being made by the retailers. For example, he said Costco, Target and Whole Foods are paying their own building costs.
Harrison said he and his co-developer, the Montgomery County-based Goldenberg Group, are responsible for $66 million of the total project cost.
He said the tax increment financing plan will give the developers up to $6.2 million, almost 10 percent of that $66 million.
"That is an important part of our capital stack," stressed Harrison to the commissioners. "Without it, we don't have a financeable project. That's why the TIF is necessary."
The East Penn School Board already has voted twice to participate in the Hamilton Crossings TIF.
The TIF stipulates that 50 percent of new property tax revenue from businesses in the shopping center will be diverted to help pay the debt on road and other nearby public improvements for up to 20 years.
East Penn is expected to get an additional $592,861 a year in new real estate tax revenue once the shopping center is completely up and running, with another $592,861 diverted to pay TIF debt.
Lower Macungie is expected to get an additional $12,010 a year, also with an equal amount diverted to pay that debt.
Township commissioner Ron Beitler, the only one of the five commissioners who openly opposes the Hamilton Crossings TIF, asked Harrison why the township's "fractional" portion of the TIF "is critical to moving forward?"
"It's very, very important," responded Harrison.
"The township is the governing authority that's going to hopefully create the TIF district. The township is the locality of the project. The township is in effect the sponsor of the tax increment financing district. The township has been working on this project for more than five years."
Harrison said if Lower Macungie is not willing to invest $12,000 a year in the project, it will send a very negative message to the school district that the township doesn't believe in the project.
"It would make me very, very concerned that the school district might well revisit their decision to participate."
"So the answer is it's largely symbolic," suggested Beitler.
"I'm not going to use an adjective," said Harrison. "I'm going to say solidarity is very important for reasons that have nothing to do with the quantitative impact of the township's contribution.
"It's almost like playing Russian roulette with a school district opt-in."
Ryan Conrad, president of the five commissioners, stressed tenants of the shopping center will pay 100 percent of their tax obligation.
"There is no corporate welfare to Costco, a multi-billion dollar company, Target (or) Whole Foods," said Conrad. "They're paying their full tax obligation throughout this entire process."
But Beitler said the developers themselves are getting "corporate welfare."
Said Harrison: "No corporation that is part of this project – whether it's the developer or the tenants – is going to pay any less in property tax with a TIF than it would without a TIF. The property tax obligations are exactly the same."
Resident Ira Lehrich said he believes some of the five commissioners have aspirations to run for high political office.
Warned Lehrich: "If you're not running for higher office, you can vote for the Costco subsidy – it's not important for you. However, if you have aspirations of running for higher office, you're making a major mistake in voting for the Costco subsidy. Your yes vote will kill you in a primary."
What happens on June 5
Atty. Richard Somach, the township's solicitor, explained to commissioners what Hamilton Crossings agenda items they will be voting on at their June 5 meeting – and in what order.
Somach said their first vote will be on a proposed ordinance in which the township will agree to opt into the Hamilton Crossings TIF and allocate 50 percent of the incremental real estate tax revenues from the shopping center's properties toward the cost of public infrastructure improvements.
The solicitor said if that ordinance gets a positive vote, the commissioners will act on another ordinance establishing the Hamilton Crossings TIF district and adopting the TIF plan.
He said if that ordinance also gets a positive result, commissioners will consider three resolutions approving the project's land development plans.
Finally, they will vote on another ordinance that slightly realigns Krocks Road between Hamilton Boulevard and Route 222.
"If the initial TIF motions do not pass, in all probability you're just going to table the rest of these things -- they'll be moot," said Somach.
Asked Beitler: "What makes the subsequent ordinances moot if we don't approve the TIF?"
Replied Somach: "The developer has asked that if the first one doesn't pass, then he's not necessarily going to proceed .He'll have to see what happens on that night."
New traffic signal controls
Harrison reviewed the history of the project for commissioners at their meeting.
He said road improvements planned for the project will include new traffic signal controls east of the shopping center site, at the already congested intersection of Hamilton Boulevard and Brookside Road as well as the intersection of Hamilton Boulevard and Minesite Road.
He said the "adaptive traffic signal controls" that will be installed at those intersections are cutting edge technology that use real time video and computers to continually adjust the "cycle lengths" of traffic lights "in a way that optimizes traffic flows."
Harrison said this will be the first time that technology will be used in the Lehigh Valley, but added the controls have proven themselves in many other parts of the state -- including on the road network around the King of Prussia Mall in Montgomery County.
.He said study after study across the state has shown the new traffic signal controls improve traffic flow by a "phenomenal" 33 to 50 percent.
In addition to those two intersections, Harrison said the new controls will be installed at five others closer to the shopping center:
• Route 222 and Krocks Road.
• Krocks Road and Hamilton Boulevard.
• Krocks Road and the main entrance roads into Hamilton Crossings,
which will be built on both sides of Krocks.
• A new entrance road planned off Hamilton Boulevard opposite the
Ethan Allen furniture store.
• Farther west of the project site, at South Krocks Road and Hamilton
Harrison said the seven intersections will function as one coordinated system that substantially improves traffic flows, perhaps so much that additional future improvements may not be needed at those intersections.
The developer also reviewed plans to improve the intersection of Route
222 and Krocks Road, including adding "service road" lanes so eastbound traffic can more easily get off and on Route 222 at the shopping center.
He said westbound Route 222 will get a second left turn lane onto southbound Krocks Road and a right turn lane onto northbound Krocks Road.
Krocks Road itself will be widened between Route 222 and Hamilton Boulevard, with two through-lanes in each direction, plus turning lanes to access the shopping center.
He said bicycle lanes also will be added on both sides of Krocks Road.
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