Borough takes half-step toward tax break
School board delayed vote until next meeting
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.”