Lehigh Valley

Lower Macungie commissioners send a formal endorsement on shopping center funding

Group asks Lehigh County commissioners to support Hamilton Crossings TIF

LOWER MACUNGIE TWP., Pa. - Lower Macungie commissioners formally are encouraging Lehigh County commissioners to approve the county's participation in the tax increment financing plan for the proposed Hamilton Crossings shopping center project.

Not only did the five township commissioners unanimously vote to urge their county government counterparts to support the controversial TIF, but they all plan to personally sign the letter of support that township manager Bruce Fosselman will send to county commissioners.

"The Hamilton Crossings TIF project will achieve a clear economic benefit for the township, the East Penn School District and Lehigh County through the creation of new jobs and employment opportunities," said Ron Eichenberg, president of the township commissioners, who made the motion to send a letter to county commissioners.

The twice-delayed TIF vote by county commissioners is scheduled to take place at their next meeting on Wednesday night. They delayed deciding the fate of the project on May 22 and again on June 12—after it was discussed for nearly three hours.

On May 13, East Penn School Board became the first of the three local taxing bodies to embrace the Hamilton Crossings TIF, with a 6-2 vote. Lower Macungie commissioners must be the last to vote on it, after the county commissioners.

A no vote by the county commissioners will kill the deal, because all three taxing bodies must approve the TIF. And the project's developers repeatedly have said they cannot build the $140-million shopping center in Lower Macungie without a TIF to help pay for infrastructure improvements.

Atty. Jonathan Hugg, who represents the owners of two nearby shopping centers that oppose the Hamilton Crossings TIF, told Lower Macungie commissioners the Hamilton Crossings TIF is illegal, a misuse of the state's TIF statute, and an anti-competitive and unfair act.

"This is an ‘ends-justify-the-means' approach to the law, which my client may have no alternative but to fight in court," warned Hugg.

When Hugg held up a picture of the site to be developed, he accused commissioners of looking away and not being interested. He said rather than being urban blight as required by state law to qualify for a TIF, the property is "just a field out in the middle of nowhere."

"You are misusing the law and we may have to go to court in order to remedy that," said Hugg. "This does not look like urban blight to any reasonable person. If you open your eyes, you would see that."

Hugg represents Cedar Realty Trust, Inc., owner of the nearby Trexler Mall and Trexlertown Plaza shopping centers along Hamilton Boulevard.

Bruce Schanzer, president and CEO of Cedar Realty Trust, recently told county commissioners if they vote against the TIF and the Hamilton Crossings developers walk away, his company would be happy to build the shopping center without a TIF.

Hugg has been making the rounds at public meetings to warn of legal action if the Hamilton Crossings TIF is approved.

Next to take the podium was Atty. John Lushis, solicitor for the Lehigh County Industrial Development Authority, which developed and would administer the Hamilton Crossings TIF.

Lushis told the township commissioners: "What Mr. Hugg just told you is incorrect as a matter of law. Forty-nine states have TIF legislation. In no state has the TIF law ever been declared unconstitutional."

Interrupting Lushis, Hugg first accused him of being the township's solicitor, which he is not, then of being in the same law firm as township solicitor Richard Somach, which he is.

Eichenberg scolded Hugg, saying: "This is not a debate, sir. Let the man finish."
Continuing, Lushis said the constitutionality of TIFs has been challenged in eight states, but those challenges were not successful.

Lushis said the township's planning commission determined the property is blighted under the Urban Redevelopment Act of 1945. Lushis said it meets several characteristics of blight under that law. "Atty. Hugg is now coming before you saying your township planning commission was erroneous, made an error of law. As a matter of law, he is absolutely wrong."

When Lushis told commissioners Hugg's client also has been the recipient of TIF benefits, Hugg shouted: "That is categorically incorrect."

Lushis said it is totally misguided for Hugg to tell commissioners what they are doing is illegal or unfair.

Hamilton Crossings developers Tim Harrison and Jeremy Fogel attended the township meeting but did not address commissioners.

Other opinions

Resident Michael Siegel thanked commissioners for supporting the TIF. Siegel said he served on the planning commission when it determined the Hamilton Crossings site is blighted, because of mine wash, PPL easements and severe flooding problems. He said Hamilton Crossings will be a great asset to the township.

Charles Pattrell, who lives along Krocks Road about a half mile from the proposed shopping center, expressed concern about its impact on that road "and the whole area."

He expects it will double or triple the amount of traffic on Krocks Road, making it a major thoroughfare. He said it is a road with no sidewalks, where children walk and wait for buses. He warned of increased accidents, including fatalities.

Atty. Blake Marles, a township resident who is working with the Hamilton Crossings developers, agreed Krocks Road will have more traffic, because it is a collector road.

"One of the things that one deals with when one buys a house on a collector road is there is more traffic," said Marles, who is a former township solicitor. "If one wants less traffic, one doesn't buy on a collector road. Krocks has been a collector road for at least 30 years."

Marles also maintained residents who live closest to the planned shopping center have not been the objectors. "The objectors have generally been from elsewhere."

Marles maintained 50,000 people living in that part of Lehigh County but don't have enough nearby commercial activity, including "the kinds of commercial activity that many of the people in Lower Macungie Township use on a regular basis."

As for the TIF, Marles said: "The only taxes implicated in the project are the taxes being created by this developer and the people this developer brings to the township. None of the taxes of any of the rest of us are being used. What's wrong with government saying ‘if you're bringing new tax dollars into the community, you can use those tax dollars where we can see them, in our community – not somewhere else'?"

If the TIF plan is approved, 50 percent of increased real estate taxes from Hamilton Crossings will be used to help pay debt on public infrastructure improvements for up to 20 years, rather than 100 percent of that money immediately going to the school district and county. (Lower Macungie currently does not collect any real estate tax.)

Eichenberg's motion

The motion recommended by Eichenberg and passed by township commissioners maintains the land development plans submitted to Lower Macungie by Hamilton Crossings' developers "show significant and substantial roadway and traffic improvements, including the addition of a collector/distributor road, turning lanes and signalization, all of which the applicant will assume responsibility for constructing."

It also notes that Lower Macungie has allocated $250,000 of township funds in its 2013 capital budget to help make road improvements for Hamilton Crossings.

In addition to road improvements, the TIF money will be used to remediate flooding and upgrade existing utility services, as Eichenberg noted in his motion.

Township commissioners intended to approve the TIF plan and hold a public hearing to create a Hamilton Crossings TIF district at Thursday night's meeting.

But, because of the county commissioners' delays, they won't get to vote to approve the TIF until their next meeting at 7 p.m. July 18 – if county commissioners approve it first.

Eichenberg said the state's law stipulates that TIF district hearing cannot be held until after the county, school district and township agree to participate in the TIF.

That law requires the township to hold such a hearing to delineate boundaries of the Hamilton Crossings TIF district.

At least three weeks after that hearing, the township must adopt a resolution or ordinance creating the district.

The proposed district consists of more than 63 acres between Hamilton Boulevard and Route 222, with Krocks Road running through the center of the district.

Also during the township meeting:
• Fosselman announced that by mid-July, Service Electric TV will begin televising township meetings. The meetings won't be televised live. Fosselman said they can be viewed at 10 a.m. the second and fourth Wednesdays of each month and at 6 p.m. the second and fourth Thursdays of each month, on Service Electric's channel 50. The township manager told commissioners Service Electric cannot broadcast more than 2.5 hours of each meeting. He said the township also will continue putting webcasts of its meetings on Lower Macungie's website.

• The commissioners issued a proclamation honoring township resident David Terfinko, who is retiring from the Lower Macungie public works department "after 30 years of committed service." The audience gave Terfinko a standing ovation. Many other public works staffers attended the meeting

• With no comments from the commissioners or the public, the board unanimously approved a new ordinance aimed at reducing false fire alarms in the township.

It will allow only one penalty-free false alarm every six months.

After that, the fine will be $150 per incident for residential structures and $300 for commercial structures.

In previous meetings, commissioner Roger C. Reis reported that 30 to 40 percent of the calls responded to by the fire department are false alarms.

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