Developer makes case for tax break to revive shopping center
Tax incentive could help compete with planned Hatfield project
The developer hoping to turn around a near-vacant shopping center in Towamencin is now making the case for a tax discount to help do so.
“You did give us the zoning back in 2016. We tried our best to do what we could with it. It’s still there, but we need some more help,” said developer Mark Nicoletti.
Nicoletti and his firm Philadelphia Suburban
Development Corp. have discussed various ideas since the summer of 2015 to bring businesses back into the Towamencin Village Shopping Center, located on the southwest side of the intersection of Forty Foot and Allentown Roads.
From 2015 into 2016, the developer asked for and received a joint zoning to connect the shopping center with the adjacent SKF Inc. office building just to the south, with a combined 50acre complex sharing parking and road connections to several potential uses including a gym, health care facility, supermarket or movie theater.
Since then, the developer told Towamencin’s supervisors, talks with a large supermarket chain broke down at the negotiating table, several other large retailers didn’t get that far, and a new plan for roughly 375 residential units just north of the Ralph’s Corner shopping center up the road in Hatfield has advanced from the drawing board into the formal planning process.
“We may not be able to land a large, national anchor. But our approach is to try for smaller, regional sellers, and that model seems to be catching some momentum in other parts of the county,” Nicoletti said.
Nicoletti and development consultant Carmen Italia made the case to Towamencin’s supervisors to consider a LERTA, or Local Economic Revitalization Tax Assistance Act, incentive whereby property taxes are
locked in at the current level and then phased in gradually over a certain time period, up to ten years, instead of all at once.
“People say ‘it’s costing you money.’ It’s not costing you money because you’re not going to take in anything less than what you’re already getting,” said Italia.
A similar LERTA discount was successfully applied by Hatfield Township in 201516 to attract an auto parts distributor to an industrial property in need of remediation, Italia said, and a similar discount helped attract Almac Group to Lower Salford Township in 2007.
Any LERTA needs the approval of the local municipality, school board and county, and Italia said the municipality is usually approached first since it sets the area eligible for the discount.
“I need, at a minimum, two: the township, and the school district, and the township is the one that has to designate the district,” he said.
Nicoletti told the board that SKF could revisit its lease agreement in upcoming years, and the incentive could help the developer make the case to stay in the
township. Supervisor Jim Sinz said that’s one reason he favors the LERTA for the entire area, to ensure SKF stays in the township.
Supervisor Dan Littley asked how the LERTA would be applied to the residential units or to units in the shopping center not owned by SKF. Italia and Nicoletti said those details can be specified in the formal LERTA agreement, but the residential would provided a muchneeded volume of foot traffic for the shopping center.
“We don’t have anything in our pocket to revitalize this shopping center if we don’t do the residential,” Nicoletti said.
If the property remains vacant, the developer could challenge the assessment and reduce the value, which Italia said could cause a loss of revenue to the township. He and Nicoletti said the township could set conditions in the LERTA agreement that the assessment not be challenged, or set a certain length of time for the development to start.
“You can do whatever you want,” Italia said.
The developer currently pays the township roughly $15,000 per year in taxes on
the shopping center and the undeveloped land between it and the SKF building, Italia told the board, and a LERTA would gradually phase in any increase, while keeping tax receipts at that floor.
“It doesn’t give total forgiveness of the taxes for up to a ten-year period. It’s on the increase in the assessed value,” Italia said.
“You’ll still get the base taxes that you’re getting now, but it’s the base taxes and adjusted properties, that will then be improved, which will then increase the assessed value,” he said.
A lengthy discussion ensued, with board members asking for specifics on whether the tax incentive could be applied to only the shopping center, expanded to current open space where the developer has proposed agerestricted residential construction, or to the adjacent SKF Inc. office building, or all three.
“We’d like to get a LERTA that covers the whole campus. It’ll help us be competitive, to keep SKF in the development, and it’ll help the residential be competitive with the other residential up the street, behind Ralph’s Corner, and it’ll help us be competitive to market the shopping center,” Nicoletti said.
Roughly an hour of discussion later, two of the five supervisors said they would support the credit for all three, two said they’d support it for just the shopping center portion, and supervisor Laura Smith said she was still undecided, and had trouble picturing Towamencin as in similar need as other towns that have used the LERTA.
“When you talk about Norristown and Pottstown,
no disrespect to them, but I don’t identify with that. Towamencin doesn’t look like those, we don’t have the same socio-economic issues that they have,” she said.
“It truly feels like we’re giving it all away, and selling ourselves out, to do LERTA on residential,” Smith said.
Supervisor Rich Marino said he’d like to have more information about the rough amount of revenue the township could forgo if it approves the incentive, and Township Manager Rob Ford said he’d work to get that information at a future board meeting.
“Mark, we do want to
work with you, and we have worked with you. I just find it a little frustrating at times” to see shifting plans, supervisors Chairman Chuck Wilson said.
“We want to do something with it. We’re just continuing to plug at it, to see what we can do, to make something of it, to add some new investment,” Nicoletti said.
Towamencin’s supervisors next meet at 7:30 p.m. on Oct. 10 at the township administration building, 1090 Troxel Road. For more information or meeting agendas and materials visit www.Towamencin.org.