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.