Luzerne County Council expected to support tax break for Hazleton-area project

Luzerne County Council members gave glowing feedback to developer Rob Mericle after he and his team made a lengthy presentation requesting a real estate tax break for a massive 1,740-acre Hazleton-area project.

The new Crossroads East Business Park primarily along Interstate 81 in Hazle Township would add approximately 36 buildings, collectively measuring 14.64 million square feet.

This 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.

Mericle Commercial Real Estate Services is requesting 100% county tax exemption on new construction for a decade.

During last week’s council work session, Mericle focused heavily on his company’s growing success attracting manufacturing tenants to the county — a trend he plans to continue at the new Hazleton complex.

“Frankly you could take all the developers in the entire region and combine them, and we’re many, many multiples of those being able to bring new manufacturing jobs to Northeastern Pennsylvania, and that we’re very, very proud of,” Mericle told council.

Since 2020, one-third of the new leases in Mericle buildings — 22 of 65 — are with manufacturing-related and life science companies, Mericle said.

Mericle said his company stands out because it has local staff specialized in all facets of building manufacturing facilities, as opposed to the typical construction management model.

Tenants have invested approximately $500 million making enhancements to buildings already constructed by Mericle, he said. Emphasis on building a manufacturing base will lead to better quality jobs, he added.

“It’s almost yesterday’s warehouse is becoming tomorrow’s manufacturing building,” Mericle said.

Attorney John K. Lisman, the Mericle company’s associate general counsel, said some of his colleagues are skilled trades workers able to, from within the company, put together and assemble manufacturing facilities.

“So that makes us a builder who is not just building distribution centers, but also very advanced manufacturing facilities,” Lisman said.

Chewy.com project

Councilman Tim McGinley observed Chewy.com was among Mericle’s list of tenants attracted since 2020 because the e-commerce pet product supplier has been associated with another developer, Missouri-based NorthPoint Development, which also has received tax breaks to attract businesses to structures it constructs on tracts that had been decimated by coal mining.

NorthPoint’s premier introduction to the area was the 172-acre Hanover Township complex visible from Interstate 81 that houses Chewy.com, Adidas and Patagonia Inc.

Mericle said NorthPoint had a prior relationship with Chewy.com and brought the company to this marketplace, adding that he considers NorthPoint a “good developer and competitor.”

When Chewy.com was looking to set up a pharmaceutical center, it selected Mericle’s CenterPoint Commerce and Trade Park in Pittston Township, he told council. Mericle said he believes this selection was largely based on his company’s in-house capabilities and experience adapting buildings for more than 20 other medical-related operations and obtaining approval from the Pennsylvania Department of Health. In the first phase, this Chewy.com project will employ 250, including 100 pharmacists, he said.

Mericle had sparked the trend of repurposing mine land for commercial development with the launching of CenterPoint in 2005, and he said there are now a dozen developers investing in the region.

”I fought for 38 years trying to convince people that Northeastern Pennsylvania is a good place to live, work and play,” he told council. “I think we helped prove the market. Others have followed us. I think it’s a good thing for the region as a whole.”

He described the upcoming Hazleton area project as an “opportunity for the region” and “new translation for advanced manufacturing.”

“We think this new investment will be the largest industrial investment in the history of Luzerne County,” Mericle said.

Tax revenue

The Mericle company is the largest taxpayer in the county, presenters said.

This year, Mericle properties paid $12.9 million in school/county/local real estate taxes, including $3.4 million to the county, they said.

Mericle said the $12.9 million in annual payments will gradually rise in coming years to $24.3 million due to LERTAs expiring on 27 of the company’s existing properties.

In the decade from 2024 to 2033, an estimated grand total of $177.2 million in real estate taxes will be paid to all three taxing bodies — $45.57 million of that to the county, his chart said.

Mericle took it a step further, telling council total real estate tax payments are projected at $272 million in the decade after that (2034-2043) and $355 million in the next one (2044-2053).

He stressed these figures are for existing projects and do not include the impact of the upcoming new construction.

More than 20,000 people earning more than $1 billion in annual wages work in Mericle developed and owned buildings, it said.

Presenters highlighted the company’s 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 promotes the region’s quality-of-life amenities, the presentation said.

To address concerns about housing shortages, Mericle is branching out and planning residential developments near its projects in the townships of Jenkins, Pittston, Hazle, Wright and Plains, the presentation said.

For the new southern county Crossroads East Business Park, a residential development is planned on a 100-acre tract along Route 309, with a mix of single family homes and townhouses, presenters said.

Mericle said Lehigh Valley is significantly ahead of this region in residential development, but projects by national developers are starting to take hold in Northeastern Pennsylvania.

He told council he is personally invested in the county and hopes to continue a partnership with the county to help accelerate job growth and tax revenue.

“I love this county. I’m going to live here for the rest of my life,” Mericle said.

Reaction

Councilman Brian Thornton thanked Mericle for the informative presentation and commended him for also addressing past citizen concerns about a lack of housing to coincide with the growth.

Thornton liked the emphasis on high-paying technical jobs and skilled labor and surmised many filling these jobs will be existing residents trying to raise their standard of living.

Mericle said these companies are “re-employing and elevating people in Northeastern Pennsylvania,” often through in-house training programs. Many attract workers in the retail and service industry, he said.

Thornton also said the new project, like others already completed by Mericle and others, will bring beautifully landscaped buildings to “environmentally challenged,” mine-scarred parcels that generated little tax revenue.

Mericle said the site of the new project is some of the “roughest land in that marketplace” and contains 70-foot strip pits tracing back to “former mine kings of the past.”

“Environmentalists should be thrilled with this kind of effort,” Thornton said.

Finally, Thornton said municipalities also receive income tax from the salaries paid by the businesses locating here, describing that as a “tremendous boost to our towns.”

Council Vice Chairman John Lombardo said he learned most of Mericle’s tenants stay put after their tax breaks expire, which addresses a major concern he’s had about such programs.

Lombardo also said he regularly refers people to DiscoverNEPA to learn about available activities and did not know the site was produced and funded by Mericle.

“Mericle has truly been one of the best — if not the best — community partner in the history of Luzerne County,” Lombardo said. “The things that you guys have done for us, we really can’t repay you, particularly as far as the flood is concerned.”

Councilman Kevin Lescavage said he and Thornton served on West Pittston Borough Council during 2011 flooding and won’t forget the “astronomical” assistance provided by the Mericle company.

“Anybody can be there in good times, but when bad times hit, you were there. I applaud you for that,” Lescavage said.

He also praised the aesthetics of Mericle buildings.

“You’ve done a great job. You should stand proud,” Lescavage said.

Councilman Stephen J. Urban lauded Mericle for incorporating housing in his plans and noted the willingness of past county commissioners to support his initial projects helped the company grow.

Council is expected to grant the tax break during its Oct. 24 meeting.

Councilman Matthew Mitchell said he is confident it will pass with majority or even unanimous support due to the economic impact, job creation, charitable contributions by Mericle and tax revenue.