If a TIF is approved for Hamilton Crossings, the county, township and East Penn School District will give up 50 percent of increased property taxes generated by businesses in the shopping center for 20 years.
The TIF will give the developers $7 million, which can be used only to help pay for public infrastructure improvements.
Harrison said the project has been in the works for more than five years.
Fogel said trying to get the TIF has delayed it for close to a year and has “risked the entire project.” He said no developer would spend so much time and effort to try to get a TIF if it wasn’t critical to the financial success of the project.
Harrison said Hamilton Crossings will bring $132,000 in new tax revenue to the county every year, and twice as much annually after 20 years.
He said East Penn School District will get over $571,000 annually for the first 20 years, then double that.
“This is an investment of tax money that doesn’t exist today,” said Harrison. “It’s not like the county is getting this money today. It’s not going to get this money unless the project is built.”
Harrison said the developers’ rate of return on Hamilton Crossings will be lower than any of the projects they’ve done. “But we’ve sunk so much into it. It’s really hard for us to walk away. And we’ve got our reputations on the line.”
The 12 misconceptions
Here are the 12 misconceptions the developers addressed about their project:
1. The TIF is a tax break.
Fogel said all businesses in the shopping center will pay the full property tax, just as if there is no TIF.
He said the only difference is when the tax is collected, 50 percent of it will be allocated to help pay for the project’s infrastructure improvements and the other 50 percent will go to the county, township and school district.
2. The project should be able to pay for itself without a TIF.
Harrison said about two-thirds of the project’s infrastructure costs will improve existing problems that may never be fixed if the shopping center isn’t built.
They include road, utility and flood control improvements. He said those costs total $10.3 million, $3.3 million less than the $7 million developers would get from the TIF to help pay for those improvements.
3. Without the TIF, the shopping center’s tenants will just find some other location in the Lehigh Valley.
Fogel said the Lower Macungie property is the tenants’ “first and only” location in the Lehigh Valley. Harrison said if Hamilton Crossings falls through, the key anchor stores won’t be built in Whitehall Township or in Northampton County, but in other states that are competing to get them.
4. The TIF will cause our taxes to increase.
“The truth is the TIF cannot cause a tax increase,” said Fogel. “The TIF is funded from the projected increase in real estate taxes from our project and from our project only.”
5. The TIF would let governments play favorites.
“TIFs are used across the whole country,” said Fogel. “They are available to any project that thinks they are appropriate.”
He said the school district, township and county don’t care who the developers are but just want the project developed according to the plans.
6. Lower Macungie Township has “no skin in the game” because it doesn’t have a real estate tax.
Harrison noted the township adopted a real estate tax for 2014. He also said the township is prepared to invest $3 million in the project. “Lower Macungie has plenty of skin in the game,” he said.