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.
