Luzerne County Council is set to hear a presentation Tuesday on another real estate tax break request.
Four entities received breaks for projects in the second half of 2023 under the Local Economic Revitalization Tax Assistance (LERTA) program for blighted properties, which means the property owner pays real estate taxes on the land throughout the break and receives a discount on taxes for the new development.
The latest request is from Hazleton Logistics LLC for the construction of 802,732 square feet of industrial space in two buildings on adjacent lots in Hazle Township.
Hazleton Logistics is proposing forgiveness of 90% of the taxes on new construction in the first seven years followed by abatements of 80% in the eighth year, 70% in the ninth and 60% in the tenth and final year, according to the work session agenda.
The 66-acre site is on Chestnut Hill Drive in the Humboldt Industrial Park, which is located along Route 924 near Interstate 81.
According to presentation paperwork with council’s agenda:
Approximately $75 million will be invested to build structures totaling nearly 593,000 and 210,000 square feet designed to accommodate market demand from a wide range of prospective warehousing, storage, distribution, manufacturing and industrial users.
The assessed value of the two empty lots is currently $969,000 but would increase to a projected $48.16 million when the project is completed.
Current real estate tax payments on the undeveloped parcels total $18,355 to the county, township and Hazleton Area School District.
After the break expires in year 11, the tax payments to all three taxing bodies are estimated to be $1 million, including more than $300,000 to the county.
Hazleton Logistics notes taxing bodies would still collect more than they are receiving now during the LERTA period, ranging from approximately $48,500 in the first year to $369,400 in the tenth year.
Flint Development is handling the project. Since it was founded in 2020, the company has developed 7.4 million square feet of industrial space in 17 markets across the United States.
Tuesday’s work session follows a 6 p.m. voting meeting at the county courthouse on River Street in Wilkes-Barre. Instructions to attend remotely are posted under council’s online meetings link at luzernecounty.org.
A vote would be required at a future meeting for a tax break to take effect. Council reorganized last week, with five new members joining the 11-member legislative body.
Most recently, council voted in December to provide a break for a retail/entertainment project at the former county Valley Crest nursing home site in Plains Township.
Valley Crest Real Estate LP, which owns the property, will receive 90% forgiveness on new construction the first five years, 85% in the sixth year, 80% in the seventh, 75% in the eighth, 70% in the ninth and 60% in the final year.
Robert Tamburro, of Valley Crest Real Estate, told council the break is needed to help fund an estimated $18.7 million in off-site public highway upgrades required to address existing congestion and safely get motorists to his site off Route 315 on Valley Crest Boulevard, which is the same road serving the adjacent VA Medical Center.
Valley Crest Real Estate must provide funding and complete the public highway work because it needs Pennsylvania Department of Transportation approval for a high-volume driveway necessary for the proposed 400,000-square-foot retail/entertainment complex, Tamburro had said.
• In October, council granted Mericle Commercial Real Estate Services a LERTA for a 1,740-acre project on mine-scarred land to be named the Crossroads East Business Park. Primarily along Interstate 81, the project would add approximately 36 buildings, collectively measuring 14.64 million square feet.
Mericle will receive 100% county tax exemption on new construction for a decade. Developer Rob Mericle told council his company will continue focusing on attracting manufacturing tenants to the county at the new development.
• Two breaks were approved in August.
NorthPoint Development was granted breaks for one new building in Hanover Township and six in Hazleton and Hazle Township.
In the second approval, JVI LLC received a break on four new manufacturing and distribution facilities it plans to build on a 550-acre parcel along Tomhicken Road that falls in Hazle and Sugarloaf Townships and West Hazleton.
Both entities sought and received the same package: a 90% reduction in real estate taxes on new construction the first seven years, an 80% reduction in the eighth year, 70% in the ninth year and 60% in the tenth.
Much of the new development receiving breaks is on long dormant, mine-scarred land, including these LERTAs approved in 2021:
• NorthPoint Development for a $125.2 million development on 122 acres known as the “Bliss Earth Conservancy site” off Middle Road in Hanover and Newport townships — 90% tax forgiveness on new construction in the first seven years and then 80%, 70% and 60% in the final three years.
• Hillwood Properties for two buildings on a 100-acre site now called the Hazleton Logistics Park near the intersection of Route 309 and the Arthur Gardner Highway — 90% off new construction the first five years then 80% in the sixth year, 60% in the seventh, 40% in the eighth, 20% in the ninth and no forgiveness in the tenth year.
• Bluecup Ventures for a three-warehouse project on 360 acres on Route 309 in Hazle Township — 65% in real estate tax reduction on new development over 10 years.
• Hazleton Creek Commerce Center Holdings LLC for five new structures on a 400-acre site along Routes 309 and 924 in Hazleton and Hazle Township.
This $500 million project received full tax forgiveness on new construction for a decade because the site is so severely scarred from past surface and deep mining and two dumps, officials had said, although Hazleton Creek agreed to pay the county $10,000 annually in lieu of taxes.
The impact of past expiring tax breaks can be tracked through the county’s annual audit.
The county’s most recent audit covering 2022 attributes a $911,000 increase in county real estate tax collections to newly expired LERTA and Keystone Opportunity Zone (KOZ) breaks.
The audit indicates $2.6 million in county taxes were abated for LERTAs in 2022 in addition to $768,166 for lingering properties in KOZ zones.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.