LOWER MACUNGIE TWP., Pa. - Both construction of the long-debated Hamilton Crossings Shopping Center and a controversial tax increment financing plan –TIF – to help finance the project were approved by Lower Macungie Township commissioners Thursday night.
Final plans for the development unanimously were approved by the five commissioners.
But first came the critical vote to participate in the TIF, which was approved 3-2.
Commissioners Ryan Conrad, Brian Higgins and James Lancsek voted for the TIF.
Commissioners Ron Beitler and Douglas Brown voted against it.
Hamilton Crossings developers have insisted the project would not be built without the township's participation in the TIF.
Beitler doesn't believe them.
"Is the project going away if we do not participate in the TIF?" he said. "Absolutely not."
But Higgins had a different opinion: "People have said that this project will happen no matter what. It's a given. It's a definite done deal. There is no guarantee that's the truth."
Said Conrad: "We risk the chance of losing this project."
After the vote, the developers said construction of the shopping center could begin before the end of this year and it will be completed by the summer of 2016.
The $139-million Hamilton Crossings will include a Costco, Target and Whole Foods as its anchor stores. It will be built on 63 acres along Krocks Road between Hamilton Boulevard and Route 222 in the township.
Conrad, who is president of the five commissioners, said the community has been yearning for "these types of outlets."
"We are extremely pleased with the progress made with the Hamilton Crossings project as a result of tonight's actions by the board of commissioners," said Hamilton Crossings developer Jeremy Fogel after the votes.
He added that the project has benefited from a great amount of public debate.
More than 100 people attended the township meeting.
Hamilton Crossings' developers were among them, but they did not address the commissioners.
Lehigh County Executive Thomas Muller, who lives in Lower Macungie and supports the TIF, also was in the audience but also did not speak.
The votes to approve the TIF came after a dozen residents spoke for and against the project and/or the TIF.
But the only opinions that really mattered Thursday were those of the five commissioners.
Most had not publicly expressed their opinions about the Hamilton Crossings TIF for many months, so no one was certain how some were going to vote.Last year, Lower
Macungie's participation in the TIF seemed a sure thing, when all five commissioners went on the record supporting it. But two of those five were voted out of office in November.
In June 2013, those five commissioners unanimously voted to send a letter to the Lehigh County commissioners, encouraging them to approve the Hamilton Crossings TIF.
Brown, Conrad and Lancsek were among the five who signed that letter.
On June 26, 2013, the county commissioners decided not to participate in the TIF by a vote of 6-3.
Among those speaking in support of the TIF Thursday night were former township commissioner Ron Eichenberg, who also signed that letter, and former township solicitor Blake Marles.
Former township commissioner Joseph Pugliese spoke against the TIF, but after the majority of commissioners already had voted for it.
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.
Lower Macungie is expected to get an additional $12,010 in property tax revenue a year from those new businesses, but now is agreeing that an equal amount of its tax revenue will be diverted to pay that debt.
"No matter how you slice this, there's a net revenue gain to the township," said Conrad. "We'll be receiving $12,000 per year over the course of 20 years and deferring $12,000 at the same time."
Conrad said the township will get other tax revenue from Hamilton Crossings, such as from local service and earned income taxes.
"We'll be getting $73,000 in revenue per year for foregoing $12,000 per year. That's a pretty good return on investment."
Conrad acknowledged that if the township would not participate in the TIF, it would begin getting 100 percent of the revenue from businesses in Hamilton Crossings as soon as the shopping center goes into operation.
"But to me, 50 percent of something is better than 100 percent of nothing. And that's the risk that we take if we vote down this TIF."
Standing before township commissioners last month, Hamilton Crossings developer Tim Harrison again stressed the shopping center project cannot be financed without the TIF.
Harrison warned that East Penn School District officials might have second thoughts about participating in the TIF if Lower Macungie also does not participate.
Higgins said most people still have no idea how the TIF works.
"The township will be earmarking revenue generating from this specific site to fix problems around that site," Higgins explained. He added those improvements will benefit residents living near Hamilton Crossings and even other businesses in that area.
"Without this project, the improvements that will be needed at some point will be the responsibility of individual taxpayers," said Higgins. "That's a fact. All the infrastructure problems will be paid for by the residents of this township and only by the residents of this township."
Higgins continued: "If you told me, that as a result of this TIF, that one dime of residential taxpayer money was to be put toward this project, I would absolutely vote no."
He said he also would vote no if Lower Macungie would be the only governing body funding the entire TIF, but the school district also is participating.
Most people left the township meeting after the commissioners cast their 3-2 votes to participate in the TIF and to create a Hamilton Crossings TIF district, but before they cast their six unanimous votes to approve plans for the project.
That may have been because none of the commissioners expressed opposition to the shopping center in their remarks before their first votes.
Sara Pandl, the township's planning director, said the project includes a high level of amenities, including 2.5 miles of walking trails –"over and above what our ordinance requires" – plus about 260 shade trees, extensive landscaping and four public gathering places.
"It raises the bar for shopping center development in our township," said Pandl.
In addition to the three anchor stores, Hamilton Crossings will include a Dick's Sporting Goods and other stores, restaurants, a service station and a bank.
On and off ramps will provide access to the shopping center from Route 222 and traffic signal controls will be updated to improve the flow of traffic in that part of the township.
Even the intersection of Krocks and Cetronia roads in Upper Macungie Township will be getting traffic signals because of the project.
After the meeting, township engineer William Erdman said the commissioners' approval of the plans constituted "a phenomenal green light." for the project, which was first proposed to the township in the spring of 2009.
But Erdman noted the developers still have to meet "a whole list of conditions" before they can actually start work.
That includes permits from state's transportation and environmental protection departments, agreements with the township and approvals from other entities, including Lehigh County Authority, Lehigh County Conservation District and PPL.
"They have a lot of work ahead of them," said Erdman.
How Higgins would vote probably was the biggest question mark of the evening, because he had kept his opinions about the TIF to himself.
He told the audience: "Throughout this process, I've been purposely silent, because I've been more interested in what everybody in the community thinks about this and their level of understanding."
He said he's spoken to more than 100 people about it in the last three weeks and read all the correspondence that has come into the township supporting or opposing the TIF and/or the project.
Higgins said residents overwhelmingly support the project, but there is a 50/50 split about the TIF.
He said the plan has been endorsed by the township's planning commission, zoning hearing board, environmental advisory committee, parks and recreation board and historical society.
"It's the first time I've ever seen every one of those groups agree on something."
Higgins began revealing his position when he said: "This is an absolute no-brainer project. I'm excited as a resident. I'm excited as a consumer."
While some project opponents said there already is too much vacant retail space in Lower Macungie, Higgins argued the project will spur economic growth, including on the site along Hamilton Boulevard where a Home Depot was planned but never built.
He predicted it also will improve Trexler Mall, whose owners adamantly have opposed the Hamilton Crossings TIF. He said they will look for better tenants to make that shopping center more desirable.
Higgins said the additional tax revenue coming from Hamilton Crossings "definitely will help to lower the tax burden on the average citizen in Lower Macungie Township. That is a guarantee."
Beitler's vote was not a surprise, because he often has publicly expressed his opposition to the TIF.
He said a developer should pay for infrastructure improvements in and around a project site as part of "the cost of doing business. Any other developer who comes into the township must take care of their infrastructure."
Beitler said TIFs are an important tool for economic development in distressed communities, adding: "There's not one person in this room who would characterize us as a distressed community. In fact, we are economically robust. We are firing on all 12 cylinders.
"We have job creation, we have economic development, without TIFs."
Beitler also said he supports the project, calling it wonderful and saying he's looking forward to it.
He also noted: "From a zoning perspective, this is absolutely the appropriate location in our township for this shopping center.
"We want the commerce to come into our township, but we don't want the traffic. So where do you stick it? You stick it right next to the bypass."
Despite his support, Beitler said the township will have to do more to maintain roads and other infrastructure around the shopping center. He also said Hamilton Crossings is going to "drive" the township toward creating its own police force, something he doesn't want.
Brown stressed he is not opposed to the project but now is against the TIF, although he was one of the five commissioners who supported it last year.
He said after a public hearing on the Hamilton Crossings TIF was held in the township on May 1, he solicited opinions and found that people generally oppose the TIF.
"That why I was elected, to represent the people and their opinions, so I will be opposing the TIF," said Brown.
Lancsek stressed the commissioners were not voting on whether or not they want a Costco. "That has nothing to do with our decision."
He said the developers could have presented plans for the shopping center with no names of retailers on any of the building sites. "We don't have a right to know who's coming in there."
"The property is zoned properly for a shopping center," said Lancsek. "As long as they meet the zoning and other regulations, they have a right to build."
Lancsek said many benefits of the project have not been mentioned, including traffic improvements for safer access to Wescosville Community Park.
He said storm sewers constructed at the shopping center will solve upstream water problems for future developers.
"A lot of infrastructure will be paid for by the developer that, if the project does not go forward, we will have to pay for --- and raise taxes to raise that money," said Lancsek.
He even argued Hamilton Crossings is going to help "quite a few people" keep their homes. He explained a manufactured housing community is on the edge of the shopping center site. "If this project does not go through, they most likely will have to move their homes or lose their homes, because they cannot meet zoning. This project solves that problem for them."
When Lancsek concluded his remarks by saying he would be supporting the project, several people in the audience blurted out: "What about the TIF?"
"I will be supporting the TIF," he responded.
Lancsek said the state created the TIF program as a financing tool for development.
He said the property qualifies for the TIF because "it is blighted by definition. The planning commission has looked into that extensively."
"This project does meet the criteria in the TIF law," echoed Conrad. "The planning commission determined that independently.
"It may not look like a typical blighted property, but it doesn't have to. It has to meet the statutory criteria and it has. That's been independently verified and affirmed by our township planning commission."
He added: "There is a demonstrated need for TIF support for this project."
Conrad also stressed all the jobs that will be created by construction of the shopping center and after it is completed. He dismissed criticism that many jobs in the shopping center will be low-paying as "an elitist perspective."
Moments of humor
As Beitler was offering a lengthy explanation of his position, he suddenly admitted: "I lost my train of thought."
Conrad got the best laugh of the night, when he reminded Beitler: "We're keeping it brief, I think you said. Do we have that buzzer, the three-minute buzzer?"
"I'm not good at being succinct," said Beitler.
When Higgins spoke, he said he and Beitler had debated the issue for hours in the parking lot of the township building after meetings "with no light, worried about our safety."
Quipped Conrad: "I guess we need a police force, is that what you're saying?"
"No, no, no," responded Higgins, as the audience laughed.
Allentown, PA 18102