LOWER MACUNGIE TWP., Pa. -

Despite a lawsuit challenging the legality of Lower Macungie Township approving a tax increment financing plan for the planned Hamilton Crossings shopping center, “the developer intends to proceed full speed ahead,” said township solicitor Richard Somach.

He added: “For those interested, your Costco is still coming.”

Cedar Realty Trust filed the lawsuit against the township last week in Lehigh County Court.

The goal of that suit, said Somach, is to nullify ordinances passed by Lower Macungie commissioners on June 5 that authorized the township’s participation in a TIF for the shopping center.

“All interested parties believe that the action filed by Cedar Realty is without merit,” declared Somach.

The solicitor made his remarks during the commissioners’ public meeting Thursday night, which was held after he briefed them on the Cedar Realty litigation in a closed-door executive session.

He said the township must file a formal response to the suit by July 30.

Somach said he confirmed on Thursday that the Hamilton Crossings developers intend to petition Lehigh County court to intervene in the case.

If the court permits their intervention, he indicated the majority of work in defending against the suit will be handled by the developers.

He said the developers even intend to reimburse the township for any expenses incurred because of the lawsuit.

“My time, for which we will be reimbursed, will be minimal --- reviewing what they are doing because we are the named defendant,” said Somach.

The $139-million Hamilton Crossings will include a Costco, Target and Whole Foods as its anchor stores.

It will be built on 63 acres along Krocks Road between Hamilton Boulevard and Route 222 in the township.

The developers have said construction of the shopping center could begin before the end of this year and it will be completed by the summer of 2016.

Cedar Realty owns the adjoining Trexler Plaza and Trexler Mall shopping centers, which are farther west along Hamilton Boulevard, on the Lower Macungie/Upper Macungie boundary.

For more than a year before Lower Macungie approved the TIF plan by a
3-2 vote in June, Jonathan Hugg, Cedar Realty’s lawyer, had been threatening legal action at public meetings where Hamilton Crossings was discussed.

Cedar Realty maintains that, by approving the TIF, the township is giving Hamilton Crossings an unfair competitive advantage. The company maintains the TIF subsidizes Hamilton Crossing while hurting its own shopping centers.

Hugg has said Cedar Realty invested more than $30 million to redevelop its two shopping centers in the last few years, without any government subsidy or handout.

He has complained that Hamilton Crossings is even trying to lure Cedar Realty’s tenants out of the two shopping centers.

Cedar Realty also maintains the Hamilton Crossings site should not qualify for a TIF because it is in an affluent township, not a blighted urban area..

But Hamilton Crossings developer Tim Harrison has said Pennsylvania’s tax increment financing law does not require that TIF financing can only be used in blighted urban areas.

Proposed Hamilton Crossings shopping center

Harrison 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 those criteria is economically or socially undesirable land use.

Harrison 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.”