Bor­ough takes half-step to­ward tax break

School board de­layed vote un­til next meet­ing

The Community Connection - - LOCAL NEWS - By Evan Brandt @PottstownNews on Twit­ter

POTTSTOWN >> Pottstown may soon be one bor­ough­wide tax in­cen­tive.

Wed­nes­day night, Pottstown Bor­ough Coun­cil voted unan­i­mously to au­tho­rize the bor­ough so­lic­i­tor to be­gin craft­ing an or­di­nance that is de­signed to of­fer tax in­cen­tives to all com­mer­cial and in­dus­trial prop­erty own­ers in the bor­ough to im­prove and de­velop their prop­er­ties.

“We’re only 5.5 square miles, so this way any in­vest­ment we can at­tract ben­e­fits the whole bor­ough, no mat­ter where it is,” Bam­ford said.

The school board isn’t so sure yet and de­layed un­til its next meet­ing a vote au­tho­riz­ing its own so­lic­i­tor to re­view the or­di­nance the bor­ough will draw up.

The vote came at a joint meet­ing of the school board and bor­ough coun­cil, held at Franklin Ele­men­tary School and dur­ing which Steve Bam­ford, ex­ec­u­tive di­rec­tor of Pottstown Area In­dus­trial De­vel­op­ment Inc., out­lined the rec­om­men­da­tions for a LERTA dis­trict.

The acro­nym stands for Lo­cal Eco­nomic Re­vi­tal­iza­tion Tax As­sis­tance and one of the things that makes it at­trac­tive is that mu­nic­i­pal­i­ties and school dis­tricts don’t lose in­come — they just de­lay the in­crease in in­come from an im­proved prop­erty.

The same tax rev­enue the bor­ough, school dis­trict and county re­ceive from the prop­erty now, will con- tinue even af­ter im­prove­ments are made, un­der the LERTA for­mula.

Then, over the years, the tax bill from a higher prop­erty as­sess­ment slowly in­creases in 10 per­cent phases, soft­en­ing the im­pact on the prop­erty owner, but slowly in­creas­ing rev­enues for all three tax­ing bod­ies.

The rec­om­men­da­tion to both boards — agreed upon by Bam­ford and staff from both the bor­ough and the school dis­trict — also calls for the phase-in of full tax pay­ments to be stretched over the full 10 years the law al­lows.

Un­der that sce­nario, a newly de­vel­oped prop­erty would see its tax bill in­crease by 10 per­cent each year over 10 years.

“If we’re go­ing to of­fer a tax in­cen­tive, we might as well be ag­gres­sive,” Bam­ford said.

A LERTA is dif­fer­ent from the Key­stone Op­por­tu­nity Zone tax break, which also stretches over 10 years but ex­empts all taxes in the first year with a sim­i­lar phase-in to full value.

One of the f ew busi­nesses to take ad­van­tage of that pro­gram, in place on Key­stone Boule­vard along the Schuylkill River, is the Her­itage Coach Com­pany, which, in 2013, moved into the for­mer 84 Lum­ber fa­cil­ity in Pottstown from Con­shohocken, in part, due to that tax in­cen­tive.

At the same meet­ing, com­pany pres­i­dent Jay Lank­ford told the group that the com­pany in­vested $400,000 in im­prov­ing the build­ing, that it is fully rented with ten­ants and will son be home to nearly 60 jobs.

But with Key­stone Op­por­tu­nity Zones no longer an op­tion, and few of­fi­cials ob­ject­ing to cre­at­ing more jobs in the bor­ough, much of the dis­cus­sion among both boards Wed­nes­day night, how­ever, fo­cused on whether or not to in­clude residential hous­ing in the LERTA pro­gram.

Some wor­ried that it would of­fer an in­cen­tive to land­lords, re­ward­ing them for not i mprov­ing their prop­er­ties sooner.

Oth­ers ar­gued that home­own­ers should re­ceive the same ben­e­fit as com­mer­cial prop­erty own­ers.

Coun­cil­man Dan We­and, who sits on the bor­ough’s Blighted Prop­erty Com­mit­tee, sug­gested one way to un­tie the Gor­dian knot would be to have the in­cen­tive ap­ply only to those residential prop­er­ties that re­ceived an of­fi­cial des­ig­na­tion as “blighted.”

Bam­ford and Bor­ough Man­ager Mark Flan­ders both said they are not op­posed to of­fer­ing the break to home­own­ers, but that the mat­ter is more com­pli­cated.

“We don’t con­sider it dead in the wa­ter,” said Flan­ders. “We just don’t want to hold up im­ple­ment­ing this for the com­mer­cial and in­dus­trial prop­er­ties while we fig­ure out the residential piece.”

The school board’s rea­sons for de­lay are un­known since few used their pub­licly funded mi­cro­phones dur­ing this dis­cus­sion.

How­ever, that didn’t stop Bor­ough Coun­cil Pres­i­dent Stephen Toroney from ob­serv­ing “you know over the years, the school board has al­ways com­plained that bor­ough coun­cil isn’t do­ing enough to bring more busi­nesses to town to shore up the tax base ... well, Steve needs all the tools he can get his hands on to pro­mote eco­nomic de­vel­op­ment in Pottstown and this is one of them.”

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