Will NorCo Council Be Whistling Dixie?

This picture was taken 8/17. Windows are now being fixed.

Northampton County Council will introduce legislation tonight that will, if passed, approve a $26-29 million tax break for the developer of the long vacant Dixie Cup factory in Wilson Borough. It will enable Skyline Investment to float two series of bonds for a proposed 405-unit luxury apartment complex and use the projected increased assessment to pay for the improvements made over a period of 20-25 years. During this time, taxing authorities will continue to receive the taxes on the existing assessment, but they will have to wait a quarter century to see receive the taxes it should receive when improvements are made. 

In addition, Skyline will also use historic tax credits and has already received a state grant for asbestos removal. 

Both Wilson Borough and Wilson Area School District have already agreed to this windfall. but NorCo Council has yet to weigh in. Under state law, the soonest they can do so will be in late October. 

Council member John Goffredo described what is happening as "almost like corporate welfare. We're giving a tax break to some of the most wealthy and most privileged people there are out there," he complained. Wilson Borough Council President John Burke said the development might actually attract other projects to hos borough and might even lead to reduced taxes "down the line." 

Skyline's Brian Bartee said he'd be contributing $1.1 million for low-income housing. His rental rate will be $2.51 per sq ft., which is actually cheaper than three luxury apartment complexes he identified in Easton and Bethlehem. He said the average rent at one of his apartments will be $2,452 per month.  Once construction starts, he projects that he'll be able to build 20 units a month. 

Noting that the project would take Bartee about 20 months (or slightly longer) to complete, Council member John Brown told Bartee that he'd be generating a substantial cash flow (406 units @ $2,452 is about $1 million a month). "Why do you need an additional 17 years of tax break in order to make the project work?  There's something in that math that seems a little odd to me." At that rate, Brown noted he could have everything paid off in 12-15 years. 

Bartee answered that "[w]e need a 20-year term so that we can maximize the proceeds so that we can meet the equity constraint to close." He said a lesser term would make it impossible to close. 

Brown also noted that Bartee's background is "pretty scarce." (I have previously raised a number of red flags about Skyline) "You have a nice website and that's about it," Brown said. Bartee conceded he has no previous experience as a developer, but his partner (David Amirian) does and won developer of the year in 2024.