EASTON, Pa. — Northampton County Council voted down a tax break Thursday benefiting redevelopment of the former Dixie Cup building in Wilson Borough.
Developer Skyline Investment Group plans to turn the long-vacant industrial site on 24th Street into 405 apartments, at an overall cost of $184 million. The building has sat vacant since the early 1980s.
Council members voted 5-4 to reject a tax increment financing district for the site, once the factory where Dixie cups were made.
Commissioners Jeff Warren, Kelly Keegan, Jeff Corpora and Ken Kraft, all Democrats, supported the TIF. Voting against it were Republicans John Brown, John Goffredo, Tom Giovanni, and Democrats Ron Heckman and council President Lori Vargo Heffner.
The TIF district would have allowed the developer to effectively pay its debtors instead of paying most of its property tax bill for the first 20 years after the new apartments open.
A developer working within a TIF district can take out a loan for the rough amount of property taxes the landowner would pay on the finished apartments over the life of the tax break — 20 years for the Dixie Cup TIF proposal.
Under a TIF, property taxes are phased in, allowing builders to pump money that would have gone to taxes back into the project to spur redevelopment and pay off loans.
Despite the vote, Skyline Investment Group Managing Partner Brian Bartee said Thursday that work toward turning the former 640,000-square-foot factory into apartments will continue.
“There are ways to organize things going forward. We kind of want to keep that close to the vest, but the project will move forward, ” Bartee said. “We’re going to keep spending money and keep building.”
Proponents of creating a TIF district for the Dixie Cup redevelopment project argue it will breathe new life into the borough as well as the decaying building, which has been vacant since the early 1980s despite a handful of failed attempts at redevelopment.
The tax break’s opponents have said it amounts to a handout to a well-heeled developer at the expense of residents who do not have the luxury of a property tax incentive.
“We've waited over 40 years for this project to get done. Everybody seemed like they were on board with it, and now we’re right back at square one. It’s a definite letdown by county council.”John Burke, Wilson Borough Council president
Council members also took issue with a $1.1 million payment to Northampton County’s affordable housing fund, negotiated ahead of the TIF process, arguing Skyline should pay much more considering the size of the project and its decidedly-not-affordable rents.
Both Wilson Borough and the Wilson Area School District already signed off on a TIF incentive for their portions of property taxes assessed on the site. All three taxing agencies have to approve the TIF arrangement.
Officials from the borough and school district have consistently lobbied county commissioners to approve the tax break. The TIF, they said, will bring a new economic engine to a small borough with few remaining opportunities for large-scale economic development.
After Thursday’s vote, Wilson Borough Council President John Burke said he was “very, very surprised” by the outcome, and criticized council members’ decision.
“We've waited over 40 years for this project to get done. Everybody seemed like they were on board with it, and now we’re right back at square one,” Burke said. “It’s a definite letdown by county council.”
Northampton County Executive Lamont McClure released a statement criticizing council members as “out of touch with the residents they represent” for voting down the TIF.
“At a time when action was needed, council dropped the ball, turning a chance for progress into yet another chapter of missed opportunity,” he said.
“The council was presented with a straightforward plan to breathe life back into a site that has sat empty for 42 years.
“They continue to prove themselves to be the most useless county council in home rule history.”
