The Dixie Cup TIF and the "But For" Standard

Tonight, Northampton County Council is poised to act on a massive tax break, known as a TIF, to kickstart the conversion of Wilson Borough's vacant Dixie Cup factory into 405 luxury apartments. Though this proposal was defeated in November in a close, 5-4 vote, a new County Council with 4 new members might see things differently. The latest scuttlebutt, however, is that developer Skyline Investments wants to pull its application and go it alone with Wilson Borough and Wilson Area School District. 

Aside from Allentown's NIZ or an outright grant, a TIF is the most generous tax break a taxing body can give to a developer. As Good Jobs First explains it, Tax Increment Financing is a geographically targeted economic development tool. It captures the increase in property taxes, and sometimes other taxes, resulting from new development, and diverts that revenue to subsidize that development. That diversion means local public services do not get the new revenue they would normally get from new re/development. 

In the case of the Dixie Cup site, a TIF will enable developer Skyline to use $26.5 million or more in anticipated real estate taxes increases to finance the cost of the project and pay it back over 20 years. During this time, participating taxing bodies will be denied the opportunity to collect any increase in real estate taxes to pay for its own operations. 

This TIF, by the way, is in addition to outright grants for this venture. Skyline has already been awarded $1,000,000 from an RACP application in 2024 and this year. It has received $163,257 from a DCED Multimodal Transportation Funding Grant and a $175,000 Greenways, Trails and Recreational Program grant. It is seeking even more grant money from PennDOT, DCED Mixed Use Housing Development, another DCED Greenways grant, another DCED multimodal transportation grant, and Pa Historic tax credits. It also wants $28.5 million in federal tax equity credits.

According to the proposed ordinance Exhibit I, the TIF bond will reward Skyline $4 million as a "developer's fee," and his architect will collect $5 million. Another $3.235 million in soft costs is just listed as "fees" with no additional explanation. I have no idea where that money is going. 

Nearly two years ago, I pointed out a number of red flags about the bona fides of Skyline, a private equity firm. Not only has this firm never developed anything, but it falsely claimed to have built the "Louix," a nonexistent project. 

I have noted on multiple occasions, and as recently as three weeks or so ago, that 405 luxury apartments will actually exacerbate the workforce housing crisis. 

But the main reason why a TIF should be denied is because the developer, by his own admission, has said he doesn't need the county's help. In February, he was specifically asked by Council member Jason Boulette whether he needed the county's help.  "It really means a lot to us to have the county support and buy-in as well." answered Bartee. But when pressed he acknowledged that "[t]here are other ways to have the project move forward." 

If he does not need the TIF, granting it would technically be illegal. Under the Tax Increment Financing Act, a TIF can only be granted when development of the project is economically or physically unfeasible "but for" the tax break. This is a prerequisite for TIF approval. When a developer stands up before a taxing body and asserts that no TIF is needed, as Bartee has done, it really should not be granted. 

Lehigh Valley's DSA Opposes Tax Break For Luxury Apartments

Lehigh Valley's Democratic Socialists of America oppose this handout because they think they can squeeze more money out of an unproven and nonlocal developer. I oppose it under any circumstances. A real estate tax benefit totaling about $26 million (not just $20 million) is in addition to other tax breaks.

Skyline has already been awarded $1,000,000 from an RACP application in 2024 and this year. It has received $163,257 from a DCED Multimodal Transportation Funding Grant and a $175,000 Greenways, Trails and Recreational Program grant. It is seeking even more grant money from PennDOT, DCED Mixed Use Housing Development, another DCED Greenways grant, another DCED multimodal transportation grant, and Pa Historic tax credits. 

It also wants $28.5 million in federal tax equity credits.

Moreover, this will actually make it more difficult to find affordable housing, especially when other landlords start increasing their rents. 

At a time when it's all but certain that a tax hike is looming, this handout sends the wrong message.

Skyline Gets NorCo Council to Support $500,000 State Grant For Luxury Hotel in Wilson Boro, Next to Dixie Cup

Local governments Wilson Borough and Wilson Area School District have been falling all over themselves to help the for-profit private equity firm (Skyline Investment Group) build both luxury apartments and a high-end hotel in Wilson Borough. In addition to seeking a $29 million tax break to redevelop the vacant Dixie Cup factory, it already has received $838,257 in state grants. At Thursday night's meeting, Northampton County Council endorsed another $500,000 in state RACP grants. Skyline still another $9 million from the state. Without the local tax break known as a TIF, which amounts to about $29 million, it is seeking $124,338.257 in the form of outright grants or tax credits. 

Skyline principal Brian Bartee was introduced by DCED Director Tina Smith, who told Council that the Zrinski administration supports this project. But what exactly is the project? 

We all know that Skyline wants a $29 million TIF to turn Wilson Borough's vacant Dixie Cup factory, into luxury apartments that few can afford. That proposal failed last year. But with a new County Council, Bartee plans to get the county to join the borough and school district in awarding his project a TIF and apparently plans to seek county approval again sometime next month. 

But does County Council even know there's much more? There was little discussion during the meeting as Council members told each other they were merely voting on a "pass through" grant. It's still the public's money, but Council member Lori Vargo Heffner was the sole NO vote. 

Here's what County Council does not know but could have discovered if they looked at the actual application. It includes more than the Dixie Cup. It also includes what Skyline calls its "New Life," project, a plan to convert the 3-acre former LA Fitness site into a "premier hotel" known as The Wilson. According to Skyline, "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".

Do you think it's wise to spend public tax dollars for luxury apartments and a premier hotel that includes butlers and chauffeurs? 

The grant application describes the site as a "brownfield," but that is completely untrue of the LA Fitness site.  

Skyline has already been awarded $500,000 from an RACP application in 2024. It also received $163,257 from a DCED Multimodal Transportation Funding Grant and a $175,000 Greenways, Trails and Recreational Program grant. It is seeking even more grant money from PennDOT, DCED Mixed Use Housing Development, another DCED Greenways grant, another DCED multimodal transportation grant, and Pa Historic tax credits

It also wants $28.5 million in federal tax equity credits.

 

Dixie Cup Rcap Application 2025 by BernieOHare

Wilson Boro's Dixie Cup Project Wants $124 Million in Grants, Tax Breaks and Tax Credits

Yesterday, I shared Lehigh Valley News Brief's story about the DaVinci Science Center boondoggle, and told you about its hopefully dead plans to build a 500,000 gallon salt water aquarium in downtown Easton, complete with a 100' tall Vitruvian man straddling it. Believe it or not, Northampton County Council wasted $300,000 on this project before common sense prevailed. Jeff Ward, who publishes Lehigh Valley News Briefs, believes we "need more skepticism in local government, particularly when it comes to dispensing taxpayers’ dollars." At least DaVinci is a nonprofit with a noble mission. But guess what? Local government is falling all over itself to help a for-profit private equity firm (Skyline Investment Group) build both luxury apartments and a high-end hotel in Wilson Borough. In addition to seeking a $29 million tax break to redevelop the vacant Dixie Cup factory, it already has received $838,257 in state grants. What's more, it wants another $9.5 million from the state. Without the local tax break known as a TIF, which amounts to about $29 million, it is seeking $124,338.257 in the form of outright grants or tax credits. 

I know this because of a Redevelopment Assistance Capital Grant Program (RACP) filed with the state this year for a $9.5 million grant, which you can see for yourself below. 

Technically, the applicant is NorCo Exec Lamont McClure. This in itself is odd. County Council was never informed of this grant request, nor was its approval sought. County Council is usually asked to endorse grant applications to the state, and I question whether the Executive has the authority to seek a state grant without the assent of the governing body. The grant writer is in fact a county employee in the Department of Community and Economic Development, meaning that the county has devoted its own manpower to this project. 

Under the county's Home Rule Charter, the Executive has the authority to represent the county in obtaining federal or state assistance to local governments (Section 303(6)), but has no power to seek grant assistance on behalf of a for-profit corporation. 

The grant application includes the Wilson Borough Dixie Cup factory, which is slated for luxury apartments that few can afford. It also includes its "New Life," project, a plan to convert the 3-acre former LA Fitness site into a "premier hotel" known as The Wilson. According to Skyline, "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".

Do you think it's wise to spend public tax dollars for luxury apartments and a premier hotel that includes butlers and chauffeurs? 

The grant application describes the site as a "brownfield," but that is completely untrue of the LA Fitness site.  

What you see below indicates that Skyline has already been awarded $500,000 from an RACP application in 2024. It also received $163,257 from a DCED Multimodal Transportation Funding Grant and a $175,000 Greenways, Trails and Recreational Program grant .It is seeking even more grant money from PennDOT, DCED Mixed Use Housing Development, another DCED Greenways grant, another DCED multimodal transportation grant, and Pa Historic tax credits

It also wants $28.5 million in federal tax equity credits.

 

Dixie Cup Rcap Application 2025 by BernieOHare

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 an $11 million mortgage, and that becomes due only when the 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

NorCo GPA Takes No Action on Dixie Land Transfer

In May, Skyline Investment Group representatives were at the NorCo's General Purpose Authority (GPA) meeting. Wilson Borough actually owns a small triangular piece shown on the tax map you see above as 1C-1. It is 0.35 acres located along the eastern side of 25th Street and is actually the beginning of a bike path that extends from the Palmer Bike path and hooks up with the Tatamy Trail. According to Claudia Robinson, who is actually a tax credit maven employed by an outfit called AreaProbe, Skyline plans to move the giant Dixie Cup currently on top of the vacant factory and plant it next to the bike path, where people could ooh and ahh at its wonder. 

But there's a problem. Wilson Borough is unable to convey directly to Skyline unless it first conducts an auction at which anyone could bid to buy the tract. This could complicate Robinson in her quest to attract private equity with promises of an historic tax credit. 

To foreclose the possibility that someone other than Skyline gets this tract, the Borough could convey to the county GPA, which in turn would munificently turn it over to Skyline. That way the law against this kind of insider dealing would be followed even though the spirit of the law would clearly be ignored. 

In July, the GPA tabled this land transfer because Wilson Borough itself had yet to take action.  Though Wilson Borough has since authorized the transfer, the GPA took no action at all at their meeting yesterday. 

Tax Break Will Line Pockets of Dixie Developer, Consultant and Architect With a Cool $15 Million

Last week, I published Allentown developer Nat Hyman's warnings to Northampton County Council at their June 6 meeting concerning a $29 million tax break known as a TIF proposed for the long vacant Dixie Cup factory in Wilson Borough. "Put simply, folks, you are being scammed," he cautioned. His remarks drew 65 comments from my readers, many of whom agreed with him. But he was also subjected to several attacks, which began almost immediately after he left the building. Many of them come from people who have a major financial interest in this project, thanks to taxpayer largesse. Developer Bill Bartee 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. 

Where did I get this outlandish information? Did I just make it up? Unfortunately, no. It is part of the TIF application attached to the Ordinance introduced on May 6. (Page 5).

The Hyman criticism began with Stan Margle, Solicitor to Wilson Boro. His borough has not formally acted on the TIF request. "I would preliminarily support it," he told Council, seeming to forget that his role is to provide legal advice, not opine on public policy. "This is a real developer," he added, although Skyline has never developed anything other than the Louix, a building that does not even exist. 

"I can tell you Nat Hyman is wrong," proclaimed Margle. "The developer is not getting $29 million out of that [TIF] if you pass it." Margle was unable, however, to tell Council member John Goffredo how much the tax benefit actually is. 

Despite Margle's claim, Hyman happens to be correct. He told County Council that they would be awarding a $29 million tax break, and that's precisely what it is. He did not guess at this figure. It is on page 9 of the TIF application    

Margle also claimed that Hyman was wrong when he asserted that Wilson Borough has been far too lax at enforcing code violations. He told Council member Ron Heckman that Wilson has cited Dixie 10 times for code violations and has fined the maximum $300 each time. I checked. It's true that Dixie was cited 10 times in 2018 and 2019, but not since then. Of these 10 citations, Dixie was fined only three times. They were $100 fines for snow and ice removal (once) and broken windows (twice). If Wilson was really interested in code enforcement, it could cite Dixie for every broken window, and on a daily basis. That would encourage a sale. Instead, it has allowed the property to languish for the past 40 years. 

Margle added that Hyman's $7 million offer to buy the property was rejected "because the product he proposed was substandard." Margle later conceded that Hyman "does good things, but it would not be appropriate for this building in this place." This was all news to Hyman, who told me he had prepared no plans for the property.

Rather than stick around through all the speeches about abortion and a SEIU union contract, Hyman left when he had finished his speech. Council member Jeff Warren waited until then to attack him. "Is Mr. Hyman still here?" asked the increasingly sanctimonious Warren. "I'd like to ask him a question. He came in here pretty bombastic about his project seeming as though he somehow wanted to destroy this project." He later added, "I was going to ask him about labor, but he's gone." 

That explains why Warren and Executive Lamont McClure are so gung ho over an out-of-state developer with zero experience. You see, this project is expected to create about 150 temporary construction jobs. Warren and McClure are so intent on seeing them go to their campaign contributors in the trade unions that they are willing to hand out $29 million of your hard-earned money to someone they do not know for apartments that most of us could never afford. This is no way to govern. 

Another black mark against Hyman, at least to Warren, is that he is from Allentown and not a Northampton County resident. Well, that's a helluva' lot better than a developer who uses a virtual address in NYC as his office. 

Hyman was slammed by Warren for leaving after he made his points, but developer Bill Bartee was completely MIA. Consultant Claudia Robinson, a specialist in corporate welfare, was physically absent and participated via a phone held up to the mike by the "Project Manager." Instead of outlining the advantages of this project, she of course attacked Hyman for a "very unfair" speech. She never stated how Hyman was wrong, but then launched this ad hominem. "Mr. Hyman has his own skeletons and it's really not appropriate for me to start discussing them now ..." Really? Then why mention that there are skeletons?    

Council President Lori Vargo-Heffner eventually stepped in and admonished Robinson. "With all due respect to Mr. Hyman, he came, he left a note, he's not the point of reference here. We are. So it's our turn to ask questions and get the answers. He had an opinion, but that's not what we're basing our questions on." Robinson then apologized.

Council member John Goffredo also defended Hyman. He pointed out that they were conducting a public hearing.  Hyman, unlike Robinson, was actually there, even if he did leave.  

Goffredo asked Robinson of the TIF was really needed. "Without this TIF, this project will not happen," she declared for the first time. Up until now, she had been saying it would be harder to attract private equity investors. Now it's impossible. 

Hyman was also defended by former Council President Ron Angle, who had come to the meeting to say good-bye to outgoing clerk Linda Zembo. "I don't know Nat Hyman, but I do know his reputation is very good," said His Eminence. "Whatever he builds is done right ... . Do you know who Skyline is? One guy. He'll give you all kinds of locations around the country ... That guy should be here. Nat Hyman did come here. He left, maybe he had another appointment, but he did come. ... "

Several people ridiculed the $1 million bribe for affordable housing as a drop in the bucket. Chuck Weiss, the Associate Exec Director of Housing for CACLV, noted that $1 million gets you maybe four apartments. "It would be nice to see a little more money coming out of this for affordable housing." Alyssa Baratta, Exec Director of Third Street Alliance, said that 2,203 LV households are homeless "A million dollars means nothing to housing these people." Armando Moritz-Chapelliquen, a Wilson Borough activist, looked at the gap between the $1,800 in rent to be charged for a 1 BR apartment and the fair market rent of $1,137. He concluded that a much fairer contribution to affordable housing would be $6.3 million. 

The final speaker was Wilson Borough Mayor Donald R. Barrett Jr. Unfortunately, he wasted a lot of his five minutes by needlessly criticizing Wilson Borough activist Armando Moritz-Chapelliquen. "It just needs to get done." he said.  

Warren, who never is at a loss for words, made this final pitch. "Sometimes, you take what you can get."

That's a ridiculous excuse for throwing away $29 million in taxpayer money. 

Dixie Cup Developers Offer Full Throated Defense of Project

On Friday and Monday, I questioned the credibility of Skyline Investment Group., the private equity firm that plans to redevelop the long vacant factory into 405 fashionable apartments beyond the reach of most Lehigh Valley residents. I did so because Skyline wants a 20-year tax incentive known as a TIF. Under this program, it could be 20 years or longer before any taxing authority sees increased tax revenue. But it will be required to provide the services that 405 residential units will undeniably demand. In response to thos criticism, the wagons have circled. 

At last night's County Council meeting, several people involved in the project once again stressed the importance of the project. Skyline principal Bill Bartee, whose website is an exercise in puffery rivalling Donald Trump, was there in the flesh. So was Claudia Robinson, although this time she made sure to make clear she is a consultant. David Amirian, a real estate developer who said he's a "man of faith," identified himself as involved in the project. Finally, Executive Lamont McClure also waxed on about the importance of this project, stating that the giant Dixie Cup will be a symbol for other communities to emulate. He also issued a news release advocating the project.

I'll agree there are numerous arguments supporting a tax break. I expect it to pass easily. But Bill Bartee's website for Skyline Investment Group.is without question blatantly dishonest. 

The Argument For the Dixie Cup TIF

Over the past few days, I've been hammering away at the special tax break known as a TIF at the long-vacant Dixie Cup factory in Wilson Borough. I philosophically oppose most tax breaks but usually have no problem when it's given to develop a blighted urban property or a brownfield. The Dixie Cup is certainly a blighted urban property, but I oppose a tax break there for three reasons: (1) I believe it will exacerbate, not alleviate, our housing crisis; (2) I have no confidence in the private equity developer; and (3) It subverts natural revenue growth. TIF Having said this, I expect the TIF to be granted by the borough, school district and county. And no, it has nothing to do with campaign contributions to anyone. There are none. The simple reality is that reasonable people of good will can look at the same facts and have different opinions.

Yesterday, I received an anonymous letter (not an email, but an actual letter) endorsing the Dixie Cup project. Although I know who the author is, I'll honor his anonymity. Here's what he said: "The TIF is a good thing for certain type properties, like the Dixie Cup property which has sat vacant for too many years. Waiting another 20 years to get the increase in taxes is not a long time. The government bodies lose nothing because without the development there will be no increase in tax base. It's obvious this building will sit forever if no government incentives, like the TIF, are involved."

In addition to this anonymous letter, I also received a "Redevelopment Project Status Report" concerning the project, which you can review yourself below. Though Skyline's Brain Bartee leaves a lot to be desired, he has had enough sense to involve over 20 highly qualified consultants. Moreover, before closing on the deal, over $3.5 million has already been invested into this project. 

I also received a message (I'll keep it anonymous) telling me that doing nothing is what exacerbates the affordable housing crisis. "[Y]ou exacerbate the Affordable Housing crisis by not increasing the overall supply of rental housing in The Valley. So, a warehousing use or worse yet no use at all makes things worse by failing to increase the overall supply. In other words, doing nothing or the wrong thing exacerbates the situation. More supply. Lower rents throughout the market as people will stop renting less housing than they can afford"

The justification for the $1 million the county receives for the TIF is that it will fund affordable housing projects in Glendon Borough, Forks Tp and on the Southside of Easton. But, more importantly it is sending a symbolic message that if you're going to build luxury or mid-market rate with County support, you are going to need to find a way to help us defray the costs of the Affordable projects we are working on all over the County.

I remain opposed to a TIF, but there are two sides to every coin. 

Redevelopment Deal Status Report 240220 Dixie Cup by bernieohareiii on Scribd

Why Dixie Developer Needs NorCo To Take Over Wilson Boro Tract

Last week, Skyline Investment Group representatives appeared at the county's General Purpose Authority.   Wilson Borough owns a small triangular piece shown on the tax map you see above as 1C-1. It is 0.35 acres located along the eastern side of 25th Street and is actually the beginning of a bike path that extends from the Palmer Bike path and hooks up with the Tatamy Trail. Skyline wants to take it over and move the giant Dixie Cup that currently sits on top of the factory to this triangle. But Skyline wants this deal to go through the county. It wants the Borough to convey to the county or General Purpose Authority, then have the county or General Purpose Authority convey to Skyline.

Why?

Under the Borough Code, Wilson Borough can convey land to another municipality or municipal authority. But if it desires to convey to a private party, it must do so by auction. 

This provision in the Borough Code is obviously intended to prevent sweetheart deals between a municipality and for-profit developers. But isn't that exactly what is happening? 

UPDATED: Dixie Cup's Questionable Developer Will Exacerbate Affordable Housing Crisis

In March, Northampton County Council approved a nonbinding resolution aimed at capping increasing lot fees charged by the private equity firms that are gobbling up manufactured home developments throughout the country. But at the same time, Northampton County is poised to give a significant tax break for Skyline Investment Group. This private equity firm plans to buy the long vacant Dixie Cup building in Wilson Borough and convert it into 405 apartments. Monthly rentals for single bedroom apartments will be $1,900, which is well above what City Center charges ($1,200) for luxury apartments at the Strata. It's nearly twice what most commercial landlords charge in the Lehigh Valley. Though Skyline is willing to throw a $1 million bone to the three taxing districts for affordable housing elsewhere, all three taxing authorities will have to wait 20 years before they see increased revenue to help their bottom lines. While waiting, ordinary taxpayers will have to pick up the tab for the increased services that the school district, borough and county will have to provide for double-platers who move here from New Jersey and NYC. These transplants will be among the few who can afford these rents. Most of us would agree that tax breaks for warehouse developers should be spurned. Similarly, we should discourage private equity firms like Skyline that exacerbate the affordable housing crisis. They've already taken over the trailer parks and now have their sights set on larger apartment complexes throughout the country. While they certainly have the right to invest in apartment buildings and charge exorbitant rents, the last thing a government should do is incentivize them. 

Earlier this week, I shared Armando Moritz-Chapelliquen's informative description of the project (you can read it here.) In addition to seeking a tax break known as a TIF, which would delay enhanced tax revenue for 20 years, Skyline wants the county to acquire a triangular tract (at least temporarily) next to the factory upon which it plans to move the Dixie Cup that currently sits on top of the building. 

One of my readers asks, "Has anyone done research into this developer? What other projects have they done? Anything of this size? Do they have a reputation as a good operator? I would think that A LOT of research should be done before McClure hands out our tax dollars to them!"

I've done a little digging and can see a number of red flags.

First, this private equity firm (it is not really a developer) calls itself Skyline Investment Group. Just as there are knock offs of name brand products, Skyline Investment Group appears to be a knock off of the worldwide Skyline Development Group. That's owned by Zygi Wilf, who also owns the Minnesota Vikings and is an actual developer. I believe using a name so similar to Skyline Development Group is designed to confuse gullible people.  

Second, Skyline Investment Group's website lists locations in California, Florida, New York, Tennessee and Texas. But with the exception of its New York location, it fails to provide a physical address for any of these other venues. The only contact - and it's the same contact for all five locations - is a cell phone number with a 551 area code (in New Jersey).

Third, the sole physical location it does list in New York is 200 Park Avenue, Suite 1700. That's the Metlife Building, and the use of that address is intended to create the impression that Skyline has a prestigious address. But it's a virtual address. 

Fourth, the portfolio for Skyline lists one project called the Louix. It fails to indicate where it is, what it is or when it was built. There is no description at all. 

Fifth, the services offered are a ridiculous array of items from accounts receivable to second mortgages to lines of credit to energy production. This is not development. 

Sixth, it lists several firms as "partners" that are actually not partners. For example, CHASM Architecture is listed as a "partner." It is actually an architectural firm that would be employed by a developer.

Seventh, the public faces of Skyline at municipal meetings have been Claudia Robinson and Neil Griffin. But get this. Neither is actually employed by Skyline at its make-believe office. Robinson is actually employed at AreaProbe, Inc., a Washington DC real estate advisory firm. She is apparently particularly good at snagging tax credits and is obviously working this deal as a consultant.  I don't know what she may have told other municipal bodies, but she failed to disclose exactly what her employment status is with Skyline, despite a direct question about it from Council member Lori Vargo Heffner. As for Neil Griffin, I was unable to find out exactly who he is and where he works.

So who is the moving force of Skyline? It appears to be one person - Brian Bartee. Amazingly, his LinkedIn page fails to even mention Skyline. He calls himself an investor in venture capital and private equity. He was a salesman for Lifescans for a year and was an account manager for the health care industry.  

If Bartee has lined up a number of investors for the Dixie Cup, good for him. If he wants to charge rents that most of us could never afford, that is his right. But the government should do nothing to help someone who is only going to make the affordable housing crisis worse even if he dangles a $1 million carrot.  

UPDATED (12:30 pm): Brian Bartee, Skyline's owner, called me this morning. The one part of my story that is inaccurate is my confusion of him with another Brian Bartee from Arizona. He also insists that CHASM is a partner, although that's debatable. The rest of my story is accurate. I'll fill you in on that conversation on Monday.  

UPDATED: Dixie Cup Developer Wants County To Take Over Wilson Borough Tract

Last week, the New York City based developers of the long vacant Dixie Cup building presented their plans to NorCo Council. Skyline Investment Group is seeking a tax incentive known as a TIF. Under this kind of a tax break, the owner can divert increased real estate taxes to pay for improvements over a period of 20 years. In exchange for this benefit, they will make 10% of their apartments "affordable" or kick in a little over $1 million that the county can use for affordable housing elsewhere.  As generous as that may be Skyline has one more request.

Yesterday, Skyline was at the county's General Purpose Authority (GPA) meeting. Wilson Borough actually owns a small triangular piece shown on the tax map you see above as 1C-1. It is 0.35 acres located along the eastern side of 25th Street and is actually the beginning of a bike path that extends from the Palmer Bike path and hooks up with the Tatamy Trail. Wilson Borough wants Skyline to take it over and move the giant Dixie Cup that currently sits on top of the factory to this triangle, where people can offer human sacrifices or whatever to the Dixie Cup gods.  Skyline wants GPA to help with the purchase of this tract. Specifically, it wants the NorCo to assume ownership of the triangular lot, and then eventually pass it on to Skyline. 

It's unclear to me why this is necessary. 

Tina Smith, NorCo's Director of Economic Development, told the GPA that "[I]t's a great project and we hope to see it come to fruition."

Skyline Investment Group descriobes itself on LinkedIn as "one of the premier nationwide commercial real estate finance firms. Senior debt, preferred debt, student housing, construction, multifamily, hospitality, retail, industrial, office, net lease, credit lines and assisted living financing is part of our core business." I'm unaware of any projects in which it has been involved.

Claudia Robinson told Council member Lori Vargo Heffner, "It;s a small industry. My area is historic rehabs." Though she presented on behalf of Skyline, she actually is employed by another firm. She did identify a major investor, but I was unable to catch the name. She stated that monthly rents for 1 BR apartments would be about $1,900.

Dixie Cup Developer Wants Tax Break

Below you will see a detailed report from Wilson Borough resident Armando Moritz-Chapelliquen concerning the redevelopment of the long vacant Dixie Cup factory into apartments. Developer Skyline Investment group wants a tax break known as a TIF in exchange for setting aside 10% of the units for affordable housing. Wilson Borough and the school district have both signed off on this tax break, and all that is left is approval from the county. This TIF must be approved by Wilson Borough, the school district and the county to get the benefit from all three taxing bodies.

I will weigh in with what I think after checking out this New York investor. 

Armando's report:

[On May 2], two representatives from Skyline Investment Group, the buyer for the Dixie Cup site, presented their most up-to-date plans to Northampton County Council's Economic Development Committee. A lot of information was shared in the supporting documents (which you can find here starting on Page 13), but among the biggest updates is that the developer is requesting the Council pass an ordinance to set up a Tax Increment Financing District, or TIF.  

 

What is a TIF?

As Good Jobs First explains it, Tax Increment Financing is a geographically targeted economic development tool. It captures the increase in property taxes, and sometimes other taxes, resulting from new development, and diverts that revenue to subsidize that development. That diversion means local public services do not get the new revenue they would normally get from new re/development. 

 

In the case of the Dixie Cup site, the TIF would be in effect for roughly 20 years. Given this potential diversion of tax revenues, the question on everyone's mind should be "Is a TIF worth it for this project?"

 

What is Being Proposed

Some may recall an earlier image I circulated to show what were some of the major components of this project. The below image comes from the developer's TIF Plan, submitted to County Council as part of their May 2 meeting (accessible here starting on page 24).

• Dixie Cup Seating Area (Red Square): The Dixie Cup currently on top of the building will be brought down to ground level and set up with benches for people to enjoy up close. A replica cup will be created and placed on the roof. Based on the plan provided, this area would be close to where the bike path meets 25th Street.
   
• Access Lane to Bike Path (Green Oval): The bike path that runs along the western end of the site will be accessible from the southern parking lot of the redeveloped Dixie Cup building. This would provide a new outlet for cyclists who can currently only exit this stretch of the bike path at Northampton Street to the north or 25th Street to the west.
   
• Cafe and Dog Lounge (Blue Triangle): The old boiler house will be converted into a retail/commercial space, along with a dog run (note the bone-shaped outline on the western end of the triangle). This amenity, in addition to the Dixie Cup seating area, will be open to the public and provide an additional component of connective tissue between the Wilson Area High School to the east and Easton High School to the west.
   

The previously mentioned fire lane around the building, pool for building residents, and rooftop lounge are still included (the pool can be seen to the west of the 2nd northern-most "finger" of the main building). While the parking lot to the south of the building is visible even today, it's bound to be more active once the building is complete. 

Affordable Housing

Within the TIF ordinance is a section on affordable housing (pages 18-19 for those reading through the documentation). While the text requires 10% of the units to be affordable, there is also language that allows for an owner using the TIF to opt out of this requirement if they contribute $27,000 per unit, up to 10% of the total number of units, to the County's Affordable Housing Initiative Program. The redevelopment plan is for 405 units, meaning either 40 units would need to be affordable OR the developer would contribute $1,080,000 ($27,000 x 40 units) to the County fund. The developer has repeatedly stated they would prefer to contribute to the fund, so the only remaining question is whether $1,080,000 is a sufficient contribution to the fund. 

My Opinion

While the affordable housing question still needs to be answered, this proposal is an enormous validation of community voices--like yours-- that pushed back on the warehouse plan in 2022 and completed my survey in 2023. For those unfamiliar, I asked area residents to score their favorability towards various uses permitted on the Dixie Cup site. The results were very aligned with what Skyline Investment Group is proposing.

Separate from affordable housing, I still have questions regarding some of the more specific details of the site (amenity access, bike path accessibility from Washington Blvd, general questions about vehicular traffic, etc). Regardless, the possibility of a reactivated and engaging Dixie Cup site as part of our community is only because of community involvement and advocacy over the past few years. And if you have concerns about this plan, there is still time to make your voice heard.

Next Steps

County Council will be holding a public hearing on the TIF ordinance on Thursday, June 6. A vote on the ordinance is scheduled for Wednesday, July 3. I'll be attending both and am happy to meet up with others who would like to give testimony. We are so close to getting something that will benefit our community. Let's make it happen!

 

Thanks as always for your collaboration!

-Armando

 

PS: If you think someone would appreciate this information or want to receive updates on this Dixie Cup site, forward them this email!

Dixie Cup's Supposed Buyer Lends $442,000 to Owner

 Yesterday, I shared Armando Moritz-Chapelliquen's take on the latest proposal for the redevelopment of the blighted Dixie Cup factory in Wilson Borough. What I neglected to tell you is that, contrary to what has been reported in some media sources, the property is still owned by Joe Reibman's WilsonPark,LTD. Although a memorandum of an agreement of sale has been recorded with Syyline Investment Corp, no Deed has actually been conveyed.

Even more interesting is that the Seller has actually borrowed $442,000 from Skyline. I have never seen a commercial buyer loan a seller money and have no idea why they would do this.

Dixie Cup Developer Wants Tax Break to Convert Factory Into 422 Apartments

Blogger's Note: Wilson Borough resident Armando Moritz-Chapelliquen, who fought against converting the old Dixie Cup factory into a warehouse, remains quite concerned about the redevelopment of that site. To that end, he attended Monday night's meeting of Wilson Area School Board to learn what Skyline Development plans. His report is in detail below.

Bascially, Skyline wants a tax break known as a TIF so it can redevelop the site into 422 1 and 2-BR apartment.

My chief concern is the developer itself. I'll be sharing more soon.

Also, I see no reason for any tax break when there are people willing to buy this property without one. Why on earth would we subsidize a developer to increase the tax burden on property owners to pay for the education of students coming from two bedroom apartments?

Good Morning Neighbor, Thanks to those who came out last night to the Wilson Area School District's board meeting. The development team at Skyline Development presented a slide show to attendees. While I didn't take pictures, I did want to share some notable takeaways from the event.    What's Being Proposed The developer is proposing to convert the old Dixie Cup factory into 422 1-and 2-bedroom apartments, all market rate (for comparison sake: The Confluence in Easton will have a total of 230 units of varying sizes). Proposed amenities for tenants include a rooftop lounge, spa, dog run, and private pool located between the 2nd and 3rd "fingers" on the western side of the complex. It was unclear if any of these amenities would be available to borough or wider community residents. When asked about affordable units, the development team indicated they are not looking at affordable housing, instead aiming to attract a market of "In-Style Denizens", "Young Professionals", and "Exurbanites". Because of this target demographic and the size of the units, the development team is anticipating minimal impact on the school population.   The parking lot adjacent to the Dixie Cup site (the one along Washington Street and across from the football field), would be a parking lot for residents of the complex. Access to the bike path from Washington Street would be gated for building tenants.   When asked about commercial tenants, the development team acknowledged it was a very fluid situation but they are not considering retail at this time. The only commercial tenant they could come up with was whoever would manage the dog recreation space.   What's Been Done So Far The development team indicated that they have already paid the delinquent taxes on the Dixie Cup site, an issue first identified by Bernie O'Hare during the 2022 LERTA debate. Additionally, they are waiting on National Register of Historic Places designation (the cup will be preserved). Environmental remediation is underway and the development team is awaiting approval from the EPA to allow the site to be used for residential.     What's Unclear The development team indicated they would contribute to Northampton County's Affordable Housing Fund. How much is unknown at this time. Additionally, when asked about the impact on local traffic by adding 422 units and activating two parking lots, the development team indicated that studies are underway. The development team indicated they signed some non-disclosure agreements and would not be at liberty to discuss some details until they have title over the property, which would not happen until remediation is complete (tentatively November 2023).   What They Want The development team indicated they would like the Wilson Area School District and Wilson Borough to revoke the LERTA they passed in 2022 (the one successfully blocked by County Council). In its place, they would like the District, Borough, and County to grant the site Tax Increment Financing (TIF).   What Do You Think? In terms of next steps, there are many different options but they all rely on what the community really wants. Are you happy with the proposed plan? Should we prioritize affordable units? Community benefits like public access to the previously mentioned amenities? Dedicated commercial space like event space or retail? I have my own opinions, but I'd like to hear from you. Let me know what you think should be the biggest priority for our elected officials as they consider granting this TIF.    As always, thanks for the collaboration! Armando