A proposed real estate tax break for a Wilkes-Barre Township project is now before Luzerne County Council, with discussion planned at Tuesday’s council work session.
Fairfield, Connecticut-based Bluecup Ventures Wilkes-Barre LLC is seeking 65% county tax forgiveness on new construction for a decade — a reduction already approved by officials in the township and Wilkes-Barre Area School District, the agenda says.
The break would fall under the Local Economic Revitalization Tax Assistance (LERTA) program for blighted properties.
As required under this type of break, Bluecup would continue to pay taxes on the 70 acres along Johnson Street throughout the decade but receive a discount on the new construction portion.
While 100% forgiveness is an option, the county and other area taxing bodies have increasingly required developers to pay some taxes on the new construction. In this case, the proposal is for Bluecup to pay 35%.
According to the proposal:
Currently assessed at $26,759, the undeveloped tract adjacent to Interstate 81 yields a total $700 in real estate taxes for the three taxing bodies.
With the improvement, Bluecup estimates the taxing bodies will collectively receive $840,000 annually during the tax break period from 2024 through 2034.
After that, it projects the taxing bodies will receive a combined $2 million in tax revenue annually.
Bluecup argues the break is required to keep the project competitive.
The site was mined under permits issued before 1974, which means little restoration was required, Bluecup said. Now devoid of mineral resources, its current condition supports minimal animal or plant life, the developer said.
It is proposing a 973,000-square-foot warehouse to attract “class A” tenants, with $50 million to be invested in the project over two years. An obsolete water line running under the site also will be replaced as part of the project.
An estimated 1,800 direct and indirect full-time jobs would be created through the project.
Some township residents have raised concerns about the project’s impact on their neighborhood, known as the Georgetown section. Township officials maintain traffic studies, an impact analysis and other standards must be met by Bluecup before it can proceed with construction.
County council would have to vote at a future meeting for a new tax break to take effect. Tuesday’s work session follows a 6 p.m. voting meeting at the courthouse on River Street in Wilkes-Barre, with instructions for remote attendance posted under council’s online meeting link at luzernecounty.org.
This is Bluecup’s second request for a county tax break.
Last April, council approved a 65% real estate tax reduction on new development over 10 years for Bluecup’s $120 million warehouse project in Hazle Township. That development on 360 acres along Route 309 will eliminate a towering culm bank motorists face as they enter the county, the developer said.
As is, the three taxing bodies currently collectively receive $15,439 in real estate tax revenue annually from the Hazle Township site. Bluecup’s payments are projected to jump to $1.74 million each year during the break and to $3.6 million after the break is over, the company said.
Other breaks
County council had approved three other LERTA tax breaks last year as the region becomes more attractive for developers due to its proximity to major highways and cities, according to prior reports:
• Hillwood Properties will receive the following reduction for new construction on mine-scarred land in Hazleton: 90% off the first five years, 80% in the sixth year, 60% in the seventh, 40% in the eighth, 20% in the ninth and no forgiveness in the tenth year.
Now called Hazleton Logistics Park, the 100-acre site near the intersection of Route 309 and the Arthur Gardner Highway has been idle for decades. The company is constructing two buildings measuring approximately 1.2 million and 500,000 square feet.
• Missouri-based NorthPoint Development will receive 90% off new construction for a project in Newport and Hanover townships during the first seven years and then 80%, 70% and 60% in the final three years.
That break is for a $125.2 million development known as the “Bliss Earth Conservancy site.” The 122 acre tract is off Middle Road, with 83 acres in Newport and 39 in Hanover.
The county is projected to receive a total additional $575,000 in revenue throughout the break. After that, the property is estimated to generate $2.6 million annually, including $663,632 paid to the county.
• Bethlehem-based Hazleton Creek Commerce Center Holdings LLC received a decade of full tax forgiveness for its five new structures in the county’s southern half.
Council decided full forgiveness was warranted because the 400-acre site is severely scarred from past surface and deep mining and two dumps, officials said.
The $500 million project along Routes 309 and 924 in Hazleton and Hazle Township is projected to generate $5 million to $6 million in real estate tax payments to all three taxing bodies annually after the break expires. Taxing bodies will collectively receive $15,700 on the land annually throughout the break.
Council accepted a $10,000 annual payment in lieu of taxes from Hazleton Creek.