Despite numerous official social media posts from Northampton County demanding to "GetDixieDone," it's increasingly clear that, whatever happens, it won't be anytime soon.
Jonathan Cox a bond counsel with Eckert Seamans and has been retained by the "Skyline Team" to assist with the TIF process, and explained what is going on at a Council Committee hearing yesterday. He pointed out that there are three taxing districts - school board, borough and county. The county is creating the taxing district into which bond proceeds for the $29 million in increased assessments will flow. The school district and borough must adopt resolutions to participate. Just as the county is slated to get $1 million for affordable housing anywhere within the county the school district and borough are themselves seeking cash. It's less enthusiastic than was originally thought. "We believed we had the support of the borough and the school district," said Cox. Executed copies of the resolutions from the borough and school district had to be available at the public hearing. They weren't, and that's because neither the school district nor Wilson Borough had even begun. Stan Margle, Wilson Borough's lawyer, admitted this at the public hearing. So technically, that public hearing was illegal.
Cox is now recommending that the county wait until both the school district (the largest taxing authority) and Wilson Borough (the taxing authority most detrimentally impacted) have acted. He believes that, even if all goes well, the soonest the county can schedule a TIF hearing is August 15, with a final vote on September 5. He acknowledged that the wait could be longer.
For those of you interested in how tax incentives like a TIF works, this is how. All properties, even the blighted Dixie Plant is assessed as having a certain value, and taxes are based on that assessment.
A developer who does not hold his hand out to the government for every penny he can grab, will see the assessment of the property increase as he develops and puts up apartments. The borough, school district and county will see increased tax revenue immediately, and that will continue for so long as apartments or other improvements are made.
A developer with a TIF is able to float a bond (tax-free, of course) based on the increased assessment anticipated. At the DIXIE, it's $29 million. When apartments are put up, the increased assessment is collected by all three taxing authorities, but it is not kept by them. They must fork the money over the county General Purpose Authority (GPA) which will conveniently be administering the bond and no doubt for a tidy commission. The GPA will use this money to pay down the debt on the bond, and for 20 years.
Basically, the government is financing and paying the debt service on a $29 million construction loan. I don't fault Skyline for taking advantage. I do fault the government for using your tax dollars.
Blogger's Note: Eckert Seamans represents the County on union issues, but the County executed a formal waiver of any conflict.
30 comments:
Watched some of the lawyer. Very long winded. Love the part where the lawyer explained the TIF process and Steve Barron contradicted him. Barron needs to get over himself. He comes off as foolish.
A 3-4 month delay in pushing through this Dixie project is a wise option. More relevant details will likely be discovered that, I believe, will work against this particular developer.
In the meantime, we can comment on other things. Like how wonderful the Biden administration is doing, or how much this Congress is getting accomplished in best interest of citizens. Sarcasm, of course!
Our government is being overthrown, folks. We really should be paying more attention to that right now, anyway.
This deal is dead! Joe "greedy" Reibman failed again.
7:05, Stick to the topic please. You don't get to decide you can go off topic.
"This deal is dead! Joe "greedy" Reibman failed again."
This is by no means dead. Not even close.
Often the TIF is used for public improvements that are needed for a large private development. For example, for a large shopping center in Lower Macungie, the TIF was used to fund the public road improvements. Many of the public improvements in South Bethlehem, including the concert areas near Steel Stacks and the Trestle Trail, were funded by TIF. However, I think it is a very different to fund the actual private building construction with diverted real estate tax dollars.
By the way, the reason the Dixie Cup became very popular in the 1920s was to cut down on the transmission of polio and other diseases. Before the Dixie Cups became common, everyone often drank from one shared cup at a drinking fountain. FYI, for anyone new to the area, Hugh Moore was a leader of the company, and Louise Moore was his wife.
The TIF that paid for public improvements in South Bethlehem lasted for 20 years. It was renegotiated mid-way through so that only 65% of the real estate tax revenue was diverted. It also paid for the visitor's center/restroom building.
Bernie
Don’t forget to mention how much money Eckert Seamans and all the lawyers on all sides will line their pockets with to get this deal done before any work is done at the site, “soft costs” are never spoken about.
I’ve seen these refinancing deals done over the years, and the fees are obscene. Where is the help for us middle class folks, we are being robbed at every turn and these developers are
I agree that a TIF to fund public improvements is quite different from what we have seen from Dixie developer Skyline.
Wilson Borough should just create a NIZ where they skip over the whole bond part and just use the tax dollars to pay the developer’s debt servicing directly.
Armando Moritz-Chellipicuin has successfully killed this project. He can now walk his daughter by it for the next 20 years and say look darling Daddy did that. Nice job dope.
Let's ask the developer to pay a one time fee for all School District and Wilson residence.
1. The yearly tax bill for all Wilson property owners (TOTAL)
2. Give the County there Million Dollars.They asked ,they shall receive
So long-term bonds would be issued by the County Redevelopment Authority to pay for much of the actual renovation costs of the building? The bonds are supposed to be repaid by the increased taxes paid by the building after completion and occupancy. What happens if the project goes belly-up while the building is half-way built? Anyone remember the half-finished minor league baseball stadium along I-78 that was eventually demolished? That project had been funneled through an entity with little experience in completing major developments.
As I understand it, the County Redevelopment Authority could be liable to pay off the bonds if the project fails. Would the County government have to raise taxes to bail out their Redevelopment Authority? It is a different case from Bethlehem where the TIF funding was coming from Sands, a huge international casino company.
Here's info on the bond payment issue from a major law firm:
https://norrismclaughlin.com/blb/general/the-pennsylvania-tax-increment-financing-act-an-analysis/
"TIF projects require the involvement of a fourth legal entity, a redevelopment or industrial development authority. It is this entity—not the county, school district, or local municipality—which ultimately issues the bonds, and such debt payments on the bonds are paid from the incremental tax revenues. These debt service payments are often secured by one of several methods, including the levying of special assessments on property in the TIF district, or the furnishing of a guaranty from a third party such as a developer, or the furnishing of a guaranty under the Commonwealth’s TIF Guaranty Program."
I read the developer's submittal, and I didn't find anything in it about a guarantee of how the bonds would be repaid.
Correction from above - Apparently it would be the County General Purpose Authority and not the County Redevelopment Authority that would issue the bonds.
These types of authorities routinely administer the issuance of long term bonds for hospitals and colleges. However, those bonds are specifically structured so that only the hospital or college is obligated to pay the bond, and the governmental agency or taxpayers cannot be obligated to pay under any circumstances. This is called a "limited obligation bond." However, I had trouble finding that restriction in the developer's submittal, which calls them "special" bonds.
Many of the members of the County General Purpose Authority are members of County Council or County staffpersons.
The County's draft ordinance does say that the county is not guaranteeing payment of the bonds, but it doesn't otherwise address who is responsible for payment if the project is not completed and the anticipated amounts of taxes are not generated over 20 years of proposed repayment.
This gubmint by midwits. Right, Steve Barron? Elect greasy midwits. Be ruled by greasy midwits.
Ekert Seamans is also a McClure campaign contributor.
Hopefully Northampton County will use some of the money to make the shitters at Louise Moore park usable
If not maybe purchase scented air freshener tablets with McClure’s portrait on to float in the porta potties
Good suggestion! I can think of nothing more likely to make a MAGA Republican shit than a portrait of Lamont McClure.
Bernie this is yet another grant grab get to give in kind gifts for those greasing the wheels of this farce. Just look around and see who sit on many different boards and commities in conflicts.
Easy Bern. They just want to piss on his visage. That's not an exclusive MAGA club in this county. County employees would likely hold a little extra for the process. Truth.
Those shitters were the source of many deaths during CoViD. Lamont closed them and saved our children's lives. Science.
you should write about the hospitals selling off their buildings to "build new buildings" when they are completely broke and just trying to stay viable, and ask how much LVH knows about this
Yo BO, is it true that at a public meeting of council Kegan was wearing a Biden campaign button. Looked like it on video. Is that legal?
Does anyone know why the shitters are closed at the park
BernieOHare to at 11:41, I saw no such campaign button. She certainly would have a constitutional right to wear one. I do not consider it wise bc she is elected to represent everyone . I have never seen this behavior from an elected official. Ron sometimes came to meetings with buttons but they were antiques from races many years before.
Interest rates are high, which are delaying many development projects, including most new apartment buildings across the nation. I assume LVN is able to avoid a great deal of interest payments by selling some of their buildings with a long-term lease. The buyer of the building may benefit from some federal tax write-offs for which LVN is not eligible. Sale with leaseback has been very common over the last few decades. The building continues to operate without any noticeable change to patients.
As elected official, Keegan DOES NOT represent everyone. She's a progressive hack who only seems to care about liberal women and seems to only be able to open her orifice to whine about tampons and abortion. Even the most progressive males are of no concern to her.
This aged well.
#DixieBoondoggle
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