Lehigh Valley

East Penn School Board rejects public TIF meetings on Hamilton Crossings

Should meetings be conducted in public by a committee that will recommend if East Penn School District, Lehigh County and Lower Macungie Township give up increased property taxes to help developers build a shopping center?

That question was debated at Monday night's East Penn School Board meeting, where a resolution that would open those meetings to the public failed by a 6-3 vote.

A tax increment financing (TIF) committee has been created to determine whether  whether some property taxes generated by the proposed Hamilton Crossings shopping center should be used to help pay for the development.

Although each of the three taxing bodies appointed two representatives to that committee by late November, the committee has not yet met, according to its East Penn representatives.

In November, at least two Lehigh County commissioners-- Michael Schware and Scott Ott -- also said TIF committees meetings should be open to the public, although the county commissioners did not vote on it.

Tax increment financing allows a portion of increased property taxes collected on a developed property to be diverted for up to 20 years to help pay for the project's public infrastructure improvements and other costs. Hamilton Crossings developers have said they cannot do their project unless they get that financing.

Hamilton Crossings, which will include a Target and the Lehigh Valley's first Costco as anchor stores, is proposed on a 63-acre site located along both sides of Krocks Road between the Route 222 bypass and Hamilton Boulevard. The project is about a year away from getting final land development approval from Lower Macungie officials.

The developers argue that the three local taxing bodies will collect much more money in taxes from the new shopping center than if the property remains undeveloped.

Charles Ballard, president of East Penn's board, said that property now generates only $7,500 a year in property taxes for the school district, but that could increase to $500,000 to $1 million a year.

The TIF committee will determine what percent of increased taxes will be used to finance infrastructure improvements and for how long, after which the full amount of taxes would come to East Penn, Lower Macungie and the county. "It's not any lost taxes," said Ballard. "It's a question of foregoing the collection of a certain amount of taxes for a certain period of time."

TIF committee meetings can be open to the public, but school board solicitor Marc Fisher said the state's Commonwealth Court has ruled there is no requirement that those meetings must be held in public.

Fisher said the meetings will not be public if the Lehigh County Industrial Development Authority, which will run them, says they won't. He said that authority will make TIF recommendations, as a result of the committee meetings.

But Fisher stressed public meetings -- including a public hearing in Lower Macungie -- will be held when those TIF recommendations are made.

School board member Lynn Donches initially proposed Monday's resolution, which stated East Penn taxpayers are concerned about the distribution of their taxes and have every right to hear any discussion about the use of those taxes.

Donches said because the TIF committee is made up of public officials from the three taxing bodies and public money will be diverted for the project, "I believe the meetings should be open to the public."

Board member Julian Stolz amended her motion slightly, so East Penn's two representatives on the committee –Superintendent Thomas Seidenberger and board member Ken Bacher –would support making all TIF committee meetings of the whole open to the public.

Stolz said because the developers are asking for special privileges in the form of temporary tax breaks, they should be encouraged to meet a standard of transparency with the public.

Ballard opposed the resolution because it would "tie the hands of our representatives" and "may get people to believe our representatives are somewhat compromised in their ability to maintain confidentiality in these meetings."

Ballard also expressed concern TIF meetings "could be turned into a media circus."

Bacher said even if TIF meetings are not open to the public, "it's important that we share as much information as we can on the process as it's going on." He said he would appreciate receiving input from district residents because the decision potentially will have a big impact on East Penn's future finances.

Bacher said he is a firm advocate of transparency but, because the committee has not yet met, he doesn't know what the arguments will be regarding why meetings should or should not be public. He wants the flexibility to listen to those arguments and make a decision based on what he hears. "I'm not sure this resolution is the right way to achieve the transparency I believe in," said Bacher.

Seidenberger declined comment on the matter because the committee has not yet met. Only Donches, Stolz and Michael Policano voted for conducting TIF meetings in public.

The TIF committee is expected to work for several months before recommending whether tax increment financing is appropriate for Hamilton Crossings and, if so, how much property tax should be diverted by the school district, township and county. But the three taxing bodies will make the final decisions – in public -- on whether they want to participate and how much Hamilton Crossings tax revenue they want to contribute.

Board member Alan Earnshaw said once the committee has done its work and makes a recommendation, "We get to give it a thumbs up or a thumbs down."

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