Palmerton borough officials have been asked to support a temporary tax abatement program to attract businesses.

George Petrole, chief operating officer for Northface Development in Palmerton, pitched the Local Economic Revitalization Tax Assistance program to council.

The borough is one of three local taxing bodies - along with Palmerton Area School District and Carbon County - needed to support Northface.

The company plans to build four roughly 500,000-square-foot warehouses, one each year starting in 2022, on the property located just off Route 248.

Before construction, however, it would enter into lease-to-own agreements with the companies who would occupy the warehouses.

Proposed redevelopment

Petrole said the anticipated 2 million square feet of transportation, logistic and warehouse project in Palmerton would create about 475 construction jobs and bring about 1,500 new full-time employees.

Upon build-out, the light industrial campus is anticipated to have a total 2 million square feet of available transportation, logistic or warehouse space.

Petrole referenced the Ball State University’s Center for Business and Economic Research methodology, an economic impact calculator for counties in the country to determine how a new business will directly and indirectly impact the community.

He said the estimated annual production (direct output) is $358.5 million, and an annual production per worker of $106,000. The anticipated output or sales impact in Carbon County is estimated to be $426.2 million, while generating roughly $15.5 million in direct and indirect business taxes to federal, state and local government.

Being competitive

Petrole the LERTA is needed to be competitive, and that all the entities must show that they are committed.

“That is to say that they are willing to use the tools that the Legislature has provided to make Carbon County competitive in the race to broaden our tax base and to ease the burden of property taxation on the individual inhabitants of the county,” Petrole said. “LERTA is one of those tools. It is not the only tool, but it is the most efficient and timely for the efficacy of this project.

“The race to be competitive is difficult, and there are many suitors for the limited opportunities currently available. Our county, which has suffered so long as a rust belt, now has a rare opportunity to compete and sit at the table with the big boys of the current economic shift we find ourselves in.

“The borough of Palmerton, which once was home to one of the largest zinc processors in the world, can now recoup the jobs lost in the 80s and continue to be the shining light of Carbon County. However, it is unfortunate that Pennsylvania is somewhat of a poor stepchild in the race to compete for the development and redevelopment taking place in our part of the country.”

Petrole said Carbon County has one of the highest median property tax rates in the United States ranked at 372 out of 3,142 counties. The effective average property tax rate in Carbon County is 1.87%.

“It is extremely difficult to compete against other countries, other states, other counties and other towns who are using many of these same development tools,” he said. “And the major companies and developers will certainly go to where it is most advantageous.”

Petrole told council much is to be gained from this project.

“The land itself, which does not benefit from this program, will create additional tax revenue as it is reassessed following infrastructure upgrades,” he said. “The development of the 248 access alone will generate additional assessed value, and its near $1.5 million dollar cost is being borne by Northface Development alone.”

“The jobs and indirect economic impact of the project construction and development will be substantial to the community and region in short and long term. To believe that a tax abatement plan is but charity for the developers is an extremely shortsighted viewpoint and one which will only keep our communities in the rust belt.”

Petrole said that under LERTA, the borough, along with the district and Carbon County, would excuse a percentage of the additional tax revenue the buildings would bring in for the first 10 years.

In the first year of each building being constructed and occupied, he said 100 percent of the additional tax revenue would be excused, followed by 90 percent in the second year in and so on until after 10 years.

Using an estimated assessed valuation of $8,217,500 for each building at full taxation and based on current millages, the tax for each building would be: Palmerton Borough ($104,927), Palmerton Area School District ($466,583) and Carbon County ($100,664).

Every major project of this type avails themselves of these programs, added Petrole. He said not having the programs would be detrimental to any redevelopment of the West Plant Site.

“We are not asking for the stars; we are merely asking for a methodology to help develop this property in the hope we can grow our community economically and ensure that our children and grandchildren can actually get to the stars,” he said.

Council reaction

Councilman Kris Hoffner asked Petrole when he would hear back from PennDOT concerning his access points. Petrole is expecting an answer soon.

Petrole said he has no formal commitment for someone to come in and build.

Council President Terry Costenbader asked Petrole if a five-year LERTA plan would be a deal-breaker. Petrole said that when compared to another site with a 10-year LERTA plan, it would be.

However, Councilwoman Holly Hausman-Sell expressed reservations.

“Why should we trust you now?” Hausman-Sell said. “You haven’t been a great partner to the people on Mauch Chunk Road.”

Hausman-Sell said many people are nervous about the trucks continuing to travel on Mauch Chunk Road.

Petrole said even if they did nothing, that would take about 90% of the traffic off Mauch Road and onto Route 248.

Councilman Andrew Hollywood retorted, “This should have been done years ago.”

Petrole said they did a presentation with PennDOT several years ago, and have been working with them since.

“It’s always excuses,” Hollywood said.

Hausman-Sell said she still had her doubts.

“Even though 10% sounds better than 90%, why should we trust you now when we didn’t see results (before),” she said. “I’m not comfortable voting on anything until I know those trucks are coming off Mauch Chunk.”

Petrole said they are doing what they think is necessary and the best use for a lot this size is distribution.

Costenbader said council would review the request.

“We’ll kick this thing around and have at it,” Costenbader said.

Should the process move forward, each taxing body would adopt separate resolutions, followed by a public hearing.