The owner of the former Dixie Cup plant is seeking a temporary tax abatement in hopes of finally spurring redevelopment of the vacant 10-acre site.
In a presentation to the Wilson Area School Board Monday night, the Allentown-based Reibman and Reibman highlighted plans to apply for state grant funding to redevelop its four-story, 630,000-acre industrial site into a mix of residential and commercial uses.
The state government grant program, known as the Keystone Opportunity Zone, would require Wilson Borough, the local school district and county government to approve a property tax abatement of up to 10 years.
Borough Council has already approved a resolution supporting the grant application and proposed tax abatement. The school board on Monday night said it will consider a similar resolution during its next meeting on Oct. 15. County Council will sign on as a supporter if both the borough and school district approve resolutions.
Superintendent of Schools Doug Wagner advised the board to have its legal counsel review the resolution prior to its approval, and to find out for the board the exact amount of property taxes the property owner pays yearly. While the exact figure was not readily available during Monday night’s meeting, officials estimate the owner pays in excess of $100,000 per year in property taxes, which is divided between the school district, borough and county government.
Joseph Reibman, representing owner Reibman and Reibman, said the Keystone Opportunity Zone program would help reignite previous redevelopment efforts that stalled several years ago when the economy soured. The former Dixie Cup plant -- built in four stages between the 1920s and 1950s -- was originally set to be redeveloped with a mix of condominiums and apartments totaling 302 units, but that effort grinded to a halt in recent years when the real estate market “disintegrated before our eyes,” Reibman said.
The latest proposal, estimated to cost between $50 million - $60 million, calls for 50-75 percent of the facility being redeveloped with one- and two-bedroom market-rate apartments. The remainder of the facility would be redeveloped with office space, according to Reibman.
The Keystone Opportunity Zone would also offer those leasing units an abatement in the earned income tax, which Reibman said would boost occupancy efforts.
“The Keystone Opportunity Zone could be the most effective tool to get this building back in shape,” he stated.
Reibman said a market study completed last year revealed demand for small apartments in the area. The apartments are projected to draw recent college graduates and seniors, which would have a very minimal impact on the student population, according to Reibman.
While the municipality, school district and county would lose out on property taxes for up to 10 years, there would be much more to gain over the long-term future by allowing the abatement, according to Borough Council President Leonard Feinberg, who accompanied Reibman during the presentation.
“After 10 years, the value of a redeveloped building will be worth a lot more than it is now,” he said.
If the building continues to sit vacant for an extended period of time, Feinberg said it will only continue to deteriorate, which could result in the owner eventually seeking a tax appeal to pay a much lesser amount.
Under the proposal discussed Monday night, the tax abatement could be in place as early as 2014 and as late as 2023.
Reibman said his firm has owned the property since 1983. After being vacated by Dixie Cup, Frick Transfer for about a quarter-century managed the site as a third party logistics facility before leaving about five years ago.
Before redevelopment can move forward, Reibman said financing will be needed from lending institutions; he is hoping the Keystone Opportunity Zone program will help entice these institutions to support the project. He also noted extensive environmental remediation must be completed, including the removal of asbestos and lead paint.
While the school board is waiting until its Oct. 15 meeting to consider a resolution of support for Keystone Opportunity Zone program, board members did give indications that it would support the effort.
“That building is a white elephant sitting there,” Board Member Anthony Verenna said. “We don’t need another seven years of a white elephant sitting there.”