A proposed tax break for a massive 1,740-acre Hazleton area project planned by Mericle Commercial Real Estate Services will be presented at Tuesday’s Luzerne County Council work session, officials said.
This new “Crossroads East Business Park,” primarily along Interstate 81, would add approximately 36 buildings collectively measuring 14.64 million square feet, according to initial information posted as an attachment to Tuesday’s agenda at luzernecounty.org.
The break would be under the Local Economic Revitalization Tax Assistance (LERTA) program for blighted properties. As required under this program, the property owner must continue to pay taxes on the land throughout the break and receive a discount on taxes for the new development.
Following past practice, Mericle’s request is now coming before county council because Hazle Township and the Hazleton Area School Board have both granted approval, officials said.
The work session follows a 6 p.m. voting meeting at the county courthouse on River Street in Wilkes-Barre, with instructions for remote attendance posted under council’s online meeting link at luzernecounty.org.
If council opts to proceed with the break, a vote would be scheduled at a future meeting.
Most of the LERTA requests granted by county council in recent years have offered graduated percentage payments toward new construction over 10 years, as opposed to 100% exemption for a decade.
For example, council approved two tax breaks in the Hazleton area in August that both granted a 90% reduction in real estate taxes on new construction the first seven years, an 80% reduction in the eighth year, 70% in the ninth year and 60% in the tenth.
NorthPoint Development received breaks for one new building in Hanover Township and six in Hazleton and Hazle Township.
In the second August approval, JVI LLC obtained a break on four new manufacturing and distribution facilities totaling 4.1 million square feet that it plans to build on a 550-acre parcel along Tomhicken Road in Hazle and Sugarloaf Townships and West Hazleton. A portion of the site was formerly a landfill, and the rest is mine-scarred.
The six new southern county NorthPoint buildings, collectively totaling 5.37 million square feet, are planned along state Route 424, also known as the Arthur Gardner Highway, which has a direct connection to state Route 309 and Interstate 81 at the Greater Hazleton Chamber of Commerce Beltway exit.
A large portion of Mericle’s proposed new park would be accessible from this same Interstate 81 exit.
County Councilman Stephen J. Urban was the only council member to vote against the two most recent breaks, expressing concerns about the impact of increased development on the Hazleton area, including housing, traffic and infrastructure.
Several council members said the projects will develop blighted tracts that currently generate little or no real estate tax revenue and, eventually, help boost the tax base.
Development growth
The scale of new development proposed on long dormant, mine-scarred land in the Hazleton area is striking.
In addition to the recent JVI and NorthPoint projects, council approved these breaks for projects in the county’s southern half in 2021:
• Hillwood Properties for two buildings on a 100-acre site now called the Hazleton Logistics Park near the intersection of Route 309 and the Arthur Gardner Highway — 90% off new construction the first five years then 80% in the sixth year, 60% in the seventh, 40% in the eighth, 20% in the ninth and no forgiveness in the tenth year.
• Bluecup Ventures for a three-warehouse project on 360 acres on Route 309 in Hazle Township — 65% in real estate tax reduction on new development over 10 years.
• Hazleton Creek Commerce Center Holdings LLC for five new structures on a 400-acre site along Routes 309 and 924 in Hazleton and Hazle Township.
This project received full tax forgiveness on new construction for a decade because the site is so severely scarred from past surface and deep mining and two dumps, officials had said, although Hazleton Creek agreed to pay the county $10,000 annually in lieu of taxes.
Abundant supply
Large commercial buildings have cropped up on land once torn up and blackened from coal mining throughout the county due to the region’s prime location near major highways.
Heavy equipment and lots of earth moving, rock blasting and repeated pounding using a crane-operated weight to compact the soil often are necessary to support the structures. Scarred land is typically available more cheaply, giving companies more financial flexibility to invest in the necessary remediation.
Developer Robert Mericle was at the forefront of this trend with his construction of the CenterPoint Commerce and Trade Park in Jenkins and Pittston townships on former blighted coal mine land.
Tens of thousands of motorists passed the “rough looking property” for decades and overlooked its potential until Mericle “saw what others were missing” and started transforming the site into a business park in 2005, a past Mericle company release said.
Advocates say repurposing mine land for commercial development is better for the environment that destroying pristine land.
Tax break impact
In the latest annual snapshot reading, the county’s 2022 audit attributes a $911,000 increase in county real estate tax collections last year to newly expired LERTA and Keystone Opportunity Zone (KOZ) breaks.
The audit indicates $2.6 million in county taxes were abated for LERTAs in 2022 in addition to $768,166 for lingering properties in KOZ zones.
According to Mericle’s Tuesday meeting submission, properties developed and owned by Mericle have generated $103 million in school, county and municipal real estate taxes — including more than $26 million to the county. Tax payments this year alone were $3.4 million to the county and $12.9 million to all three taxing bodies, it said.
More than 20,000 people earning more than $1 billion in annual wages work in Mericle developed and owned buildings, it said.
To highlight the company’s community investment, it notes Mericle has provided financial donations and in-kind support valued at $27.3 million to more than 350 county nonprofits and community organizations since 1996.
The company’s “lend a hand” program included September 2011 assistance that prevented failure of the Wyoming Valley Levee at the Forty Fort Cemetery and Luzerne County Sports Complex during record Susquehanna River flooding, it said. The company also helped property owners pump out basements, restore power and clean up flood debris and provided space to the American Red Cross and Salvation Army.
In addition, Mericle has invested more than $10 million in DiscoverNEPA, which promote the region’s quality-of-life amenities, the information said.