7. TIF financing is for blighted urban areas, not for affluent suburban areas like Lower Macungie.
Harrison said Pennsylvania’s tax increment financing law does not require that TIF financing can only be used in blighted urban areas.
He said the law stipulates that the planning commission of a municipality where the property is located must find that one of six criteria exists.
“One of the criteria is economically or socially undesirable land use.” He said on Nov. 13, 2012, Lower Macungie’s planning commission “found that this barren property -- on which nothing will grow, on which nothing can be built, which generates $7,000 of property tax from 63 acres – constitutes an economically or socially undesirable land use.”
He added there was a 30-day appeal period to the planning commission’s finding, but no one appealed because no one disagreed.
8. The TIF unjustly enriches the landowner.
The landowner, not identified by Harrison Tuesday night, is the Allentown Catholic Diocese.
He said when the developers presented the landowner with a phone book-size binder detailing problems on the property and said “we need help,” the landowner reduced the price of the land -- a lot.
He added the landowner is getting less than half of what a previous developer once offered for the property “and they’re getting something like 40 percent less than we originally agreed to pay. We’re talking about millions of dollars of contribution the landowner has made.”
9. The TIF isn’t needed; it’s too small a piece of the overall budget.
Fogel said Target and Costco are building their own stores but that’s included in the $140 million project cost. He said the development team’s share of the total cost is $66 million.
The $7 million the developers would get from the TIF constitutes nearly 11 percent of that $66 million, he said. “That $7 million is a very significant amount of money in the context of our budget and critical in our ability to finance the project.”
10. The developer will never walk away, even if there is no TIF.
Fogel did not directly refute that misconception but words on the screen stated: “Without a TIF, this project will fail for lack of financing.”
He said the developers do not want to walk away. “If we didn’t need this TIF to make this project work, the last thing we would do is spend the time to go get it. It’s critical to the project.”
11. The county has no dog in this hunt.
Said Harrison: “We have heard the argument that ‘why should Lehigh County invest in this project? Those are not county roads. Those are not county sewer pipes. Those are not county water pipes.’”
He said the county will benefit from $2.6 million in new tax revenue the project will generate over 20 years, plus new jobs, plus $11 million that will go to the school district, which educates the children of many county residents.
“Even if you thought that the TIF were of no benefit to the county, why not say yes just to help the school district, which sorely needs the help?”
12. Cedar Realty will develop the site without a TIF.
Last June, Bruce Schanzer, president and CEO of Cedar Realty Trust, which owns the nearby Trexler Mall and Trexlertown Plaza shopping centers along Hamilton Boulevard, told county commissioners that if they would vote against the TIF and the Hamilton Crossings developers would walk away, “Cedar Realty Trust would be happy to do this development without the TIF.”
Representatives of Cedar Realty have argued the TIF unfairly would subsidize Hamilton Crossings and harm their business. But Harrison said Cedar’s chief operating officer admitted they really don’t know the economics of the project.
He said Cedar also must abide by restrictive covenants that prohibit that company from developing another food store -- or any store that sells perishable groceries -- within a four-mile radius of its existing shopping centers.
Harrison said Cedar has taken no action to say it wants to buy and develop the property. “It’s really a competitor doing what competitors sometimes do, which is insulate themselves from the competition.”