Elm Terrace seeks discount from borough
Senior living center qualifies after $14 million expansion
LANSDALE >> One of the biggest communities in Lansdale is taking steps to secure a big discount under the borough’s electric incentive ordinance.
Elm Terrace Gardens, the senior living community located on Broad Street, has asked for the maximum discount available under current borough codes, Borough Manager John Ernst announced.
“They’re qualifying for the highest discount we have — 10 years at a 10 percent discount for them,” Ernst said.
In 2010, council passed an ordinance to create the town’s “Economic Development Incentive,” granting discounts on the electricity that businesses buy from the town if they spend certain amounts and keep certain num
bers of jobs in town.
The tiers of discount increase with the amount spent, and council voted in early 2018 to add two new lower tiers and one higher one to those previously available. The smallest discount now available is 25 percent off of permit fees and five percent off of electric bills for two years for those that invest $50,000 and keep or hire at least five employees.
Discounts gradually increase to the top level, a 50 percent permit discount and ten percent electric discount for ten years for investing at least $10 million and at least 120 employees.
Ernst told council’s administration and finance committee on July 3 that staff and the borough’s economic development committee have fielded the request from Elm Terrace at the highest possible discount level, due to a $14 million expansion project which was begun in 2015 and completed in 2017 that added roughly 44 new units to the complex.
“Their average (electric) bill is over $38,000 a month, so they’re going to be saving about $3,800 a month, so the average yearly savings is $46,000,” Ernst said.
“The total savings, based off of their prior twelve months, is $461,000 over ten years,” on electricity purchased from the borough’s electric department, he said.
In addition to the lowered rates, those who get the incentive also qualify for a reduction on all permit fees from the town. Staff have estimated that permit fee discount at roughly $50,000 for Elm Terrace, Ernst said, leading to a total discount for Elm Terrace of roughly $511,000 over the next ten years.
“The one thing to remember is, they made a huge investment in Lansdale. They’re not going anywhere,” he said.
“What would happen if we lost $38,000 of revenue a month in Lansdale? They made a $14 million investment in Lansdale. We can give it back,” Ernst said.
Councilman Leon Angelichio asked how the expansion project impacted the tax revenues to the borough, and Ernst and Finance Director John Ramey said the not-for-profit status produces minimal real estate tax revenue, and data is not yet available to compare year over year bills before and after the expansion.
“My guess is 2019 will be the first full year of a complete heating and cooling period. Obviously the electric usage will be different in the summer than the winter, so 2019 will be the first full year we could go back to 2017 and 2016 and compare,” Ernst said.
Angelichio asked if the borough assesses each recipient of the discounts to see if they’re still complying with their increased usage, and how the employee hours are verified. Ramey said that’s done so each quarter, when he verifies total employee hours worked divided by days in that period.
Council member Carrie Hawkins Charlton said vetting the electric incentive is the main function of the economic development committee, which she chairs, and Ernst said it’s a key tool in marketing the town to businesses across the region.
“A lot of people are looking to move into the borough, and say ‘Well, what’s your tax break?’” he said.
“Well, I can’t give you a tax break, but what I can do, because we have a commodity that we require you to buy, we can offer you a discount for that period of time,” Ernst said.
Both committees voted ahead the discount for Elm Terrace, for approval by full council. Angelichio said he was grateful for the large investment, and added that there are residents whose connection with the facility goes far back to when it operated as a hospital.
“Elm Terrace has become a fixture here in town. Some of us were actually born in that building, and now it has come full circle, that people are kind of playing out their golden years in that building,” he said.
Borough council next meets at 7 p.m. on July 17 at the borough municipal building, 1 Vine St.