EASTON, Pa. – In one of the first signs Thursday of the impact of the new members of Northampton County Council, one of the Lehigh Valley’s largest proposed industrial developments could lose property tax breaks from Northampton County.
County Executive Lamont McClure asked council Thursday to repeal an ordinance creating the Local Economic Revitalization Tax Assistance district covering much of the industrial-zoned land in Upper Mount Bethel Township.
Most of that land is set to become River Pointe Commerce Park, including 5.87 million square feet of industrial buildings on roughly 800 acres in Upper Mount Bethel. One planned building alone covers 1.5 million square feet.
County council voted in April to extend LERTA tax breaks for the district through 2028, allowing developers to pay no county property tax in the project’s first year on the value of what they build there.
Each year after, the developer pays an additional 10% of their tax bill, reaching 100% at year 11. Property owners still pay taxes on the original unimproved value of the land they build on.
McClure initially vetoed the five-year extension; council voted 6-3 just weeks later to override his veto.
McClure told council that if the repeal is approved, he intends to put forward a new ordinance soon reinstating LERTA tax breaks for part of the site that formerly held the Portland Generating Station power plant, which shuttered in 2015.
The move shows McClure feels empowered by council’s newest members – Kelly Keegan, Ken Kraft and Jeff Warren – and the 5-3 Democratic majority (with an empty seat left by Tara Zrinski's departure as county controller) on the body they help create.
In a report to council Thursday night, McClure said that the proposed buildings will surely become warehouses given their mammoth size.
“Anything over 250,000 square feet in the comprehensive plan, as promulgated by the Planning Commission, is considered a warehouse. So anything above 250,000 feet… you can be fairly well certain is going to be a warehouse,” McClure said Thursday.
“It is my opinion that it's obscene to incentivize the building of warehouses with tax rebates to tax incentives like LERTA.”
The argument that larger buildings are destined to become warehouses echoes comments from residents opposed to the complex at the April council meetings where the LERTA extension was approved.
“A warehouse, by definition, is what goes on within the walls of that building, whether it's 200,000 square feet or a million square feet,” developer Lou Pektor said Thursday. He said he intends for every building in River Pointe to be used for manufacturing.
Repealing tax incentives for much of the site and the resistance the move represents, Pektor said, would make River Pointe less competitive with the sort of big-name manufacturers he’s courting.
If the county’s LERTA is repealed, it “doesn't kill my site,” said Pektor. “Does it kill me? No. Does it hurt me? Yeah. And the more it hurts me, the more it drives me to the lower end of the spectrum,” meaning warehouses, which are cheaper to develop.
Stopping “warehouse proliferation,” as McClure calls it, has been a core pillar of the executive's recent time in office. Democratic council candidates also embraced the issue ahead of the November election.
Regardless of whether county council repeals county-level LERTA breaks for the land, the incentives will remain in effect for property taxes levied by the township and school district.
