There's Trouble in Wilson Boro's Dixieland

As many of you are aware, Northampton County Council voted recently to reject an ordinance that would have enabled a developer to finance the construction of his property with your money. In a narrow 5-4 vote, County Council denied a 20-year real estate tax break amounting to as much as $29 million to an out-of-town developer with no experience wnd who has already received handouts from the state. What's more, the developer wanted your money to provide housing for the wealthy - luxury apartments at the old Dixie Cup factory in Wilson Borough. But this is by no means over. Two of the Council members who voted No to this tax break - John Goffredo and John Brown - were defeated in November's election. A third No vote came from Council member Ron Heckman, who has opted to retire at the end of this year. The only Council members who voted against this tax break and who will remain on Council next year are Lori Vargo Heffner and Tom Giovanni. Next year's County Council might resurrect tis tax break even though it is highly likely that moeny is going to be tight.

The tax break in question is known as a TIF (tax increment financing). How does it work?

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 industrial development authority. This agency will administer the bond, no doubt for a tidy commission. This authority 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.

One of the many things that troubles me about this tax break is that, once the $29 million bond is sold, Developer Bill Bartee (Skyline Investment) has put himself down for a $4 million "developer's fee." Consultant Claudia Robinson, who specializes in getting tax credits and public subsidies, is slated to pull down even more, $4.25 million. And Bartee's "exclusive" architect, CHASM, will collect a $6.75 million fee.  So, $15 million of the $29 million in increased assessment will be lining the pockets of a developer, a consultant who specializes in public cash grabs and an inflated architectural fee. The Borough, County and School District will just have to wait 20 years. 

Once the developer and his associates are paid, they have every incentive to walk away. 

Without question, Dixie is blighted. But that's mainly because the borough allowed it to get that way over a period of 40 years. During that time, only tepid efforts were made to enforce obvious code violations. A local magisterial district judge who would decide enforcement actions was allowed to store his race cars inside the building, 

At a time when people are struggling to pay rent and when many county employees are actually on food strops, a tax break for luxury apartments is the height of arrogance. It is a reward to borough that failed to enforce code and to an owner who failed to maintain the property. 

That former owner is WilsonPark, who is fronted by Joe Reibman on behalf of a number of estates. On June 24, 2024, WilsonPark conveyed the defunct and dilapidated Dixie Cup factory to Brain Bartee, front man for Skyline Investment Group Easton, for $11 million. But Reibman has received no money. He's instead holding am $11 million mortgage, and that becomes due only when TIF Bond is floated or after 33 months, whichever comes later.  What's more, his mortgage has been subordinated to a $4 million mortgage used by Bartee to acquire the vacant LA Fitness building. On his webpage, Bartee boasts that he will convert the former LA Fitness into "130 hotel suites with 250 multifamily residences are planned that will feature 1920s-inspired art elegantly paired with modern amenities and exceptional service. Along with the introduction of approximately 163 permanent jobs, The Wilson will feature EV charging stations, a high staff-to-room ratio, and a suite of premium services. Guests will enjoy the personalized attention of a dedicated butler, doorman, concierge, chauffeur, and valet parking, all provided by a team of highly trained professionals committed to the highest standards of hospitality."

That should solve the affordability crisis. 

In the meantime, the real estate broker who arranged the deal between Bartee and Reibman has been stiffed. According to a complaint (see below) filed in Northampton County, the broker put several years into this project and is still owed $183,000. Reibman has ignored requests for payment. He'll be unable to ignore a complaint. 

Garibaldi Complaint For Broker Commission by BernieOHare