County Council could face request tonight

Last updated: May 12. 2014 11:37PM - 2180 Views
By - jandes@timesleader.com

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Luzerne County Council members were torn in February before a majority ultimately approved a tax-break extension for a Hanover Township distribution center, and now another tax-break request for the former Techneglas property in Jenkins Township is headed their way.

Local attorney Francis Hoegen is scheduled to present a request during tonight’s council economic development/real estate committee for a LERTA on the Jenkins Township property off state Route 315.

The acronym refers to the state’s Local Economic Revitalization Tax Assistance program, which provides a decade of real estate tax exemption on new commercial property built on blighted land. In comparison, the Hanover Township break extended Keystone Opportunity Zone, or KOZ, exemption from real estate taxes for 10 years.

Taxing bodies relinquished tax revenue on $168.4 million in assessed value from 27 properties in the LERTA program last year, which amounted to $896,000 in county tax revenue.

Critics say the break provides an unfair advantage, while advocates say participating properties have stimulated the local economy by creating thousands of jobs that would not have been possible without the incentive.

Hoegen could not be reached for comment Monday, but he and other several developers affiliated with the Jenkins Township property pitched the LERTA to Pittston Area School Board members in February.

Officials say all three taxing bodies must grant approval.

Pittston Area School Board members requested additional information and have not yet voted on the request.

Jenkins Township Supervisor Stanley Rovinski said township officials are supportive of the request but have not formally voted to grant it.

Hoegen and the other representatives of the Techneglas site, now known as Interstate Distribution Center, told the school board $54 million would be invested to raze the existing facility and construct an industrial warehouse distribution center. Hoegen said the current building is “outdated and obsolete.”

Techneglas, previously known as OI-NEG and Owens-Illinois, was built in 1968 to manufacture television face plates, the thick glass coverings on picture tube televisions. In its heyday in the mid to late 1990s, more than 2,500 people were employed there. It closed in 2004 and was transformed into a warehouse, distribution and manufacturing center.

The facility is now being used as a warehouse with month-to-month leases.

The owners of LERTA properties traditionally continue to pay taxes on the current assessment during the 10-year period because the break applies only to new construction.

The Techneglas property is assessed at $4.5 million — $2 million for the 225 acres and $2.5 million for the distribution center.

The LERTA program allows tax payments to gradually increase over the 10-year period, though officials have the option to forgive all taxes on new construction during the decade.

For example, LERTAs former county commissioners granted for many businesses in the CenterPoint Commerce and Trade Park in Jenkins Township did not require tax payments phased in over the decade.

Bala Cynwyd-based IDC Property LP purchased the Techneglas property from Pittston Industrial LLC for $5.2 million in January 2013, county property records show. Endurance Real Estate Group LLC, an affiliate based at the same address as IDC, manages and markets the property, according to online publications.

The property originally was assessed at $21.3 million after the countywide reassessment in 2009, but the prior owner obtained a $16.8 million assessment reduction through mediation in 2010 after producing a certified appraisal valuing the property at $3.13 million.

Millions of dollars has been spent cleaning up contamination on the property, including some government funding, officials say.

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