At their meeting Wednesday, Crawford County commissioners will consider a Local Economic Revitalization Tax Assistance designation for Adams Place, a multi-million dollar apartment project for low-income senior citizens in Cochranton that is expected to begin construction next year.
In discussing the proposal at their meeting last week, the primary question under consideration was not if commissioners would approve the LERTA but how long the tax break would last — the five-year period that has been typical for similar projects or for 10 years.
“How many times have we done a 10-year (LERTA)?” Commissioner Christopher Soff asked. “Normally we do a five-year.”
Commissioner John Amato expressed concern that granting a 10-year tax break on the project would set a precedent.
“I don’t want the next guy to come along and say, ‘You gave them 10 years,’” Amato said.
If approved, the tax break would apply to any improvements made on the 1.7-acre North Franklin Street vacant lot on the north side of the borough near the Cochranton Community Services Complex. Hudson Companies of Hermitage, which also built the Evans Square senior housing project in Conneaut Lake borough, plans a three-story, 39-unit apartment complex for the site.
Hudson did not apply for a similar tax break during the construction of Evans Square, Planning Director Zachary Norwood told the commissioners.
Under a five-year LERTA, Hudson’s county property taxes would increase in 20 percent increments over the course of the tax break, according to Commissioner Francis Weiderspahn Jr.
Under a 10-year LERTA, the increments would increase by 10 percent each year, Weiderspahn said. Similar tax breaks on school and municipal taxes would have to be applied for and approved separately by the borough of Cochranton and Crawford Central School District.
The construction of Adams Place is being made possible in large part by financing assistance from the Pennsylvania Housing Finance Agency that announced in July as part of $41.6 million in tax credits. Norwood told the commissioners that while such state tax credits can enable construction, local tax breaks such as the 10-year LERTA Hudson was requesting can assist with operations once construction is complete.
Following the meeting, Soff recalled that the current commissioners had previously improved a 10-year Keystone Opportunity Zone designation for the Keystone Regional Industrial Park in Greenwood Township in September 2017. Different from the LERTA, the KOZ designation eliminates most state and local taxes through 2027.
Pointing to the announcement last week that HydroBlox Technologies Inc. of Conneaut Lake is purchasing a nearly finished $1.3 million building to become the first tenant at Keystone Regional Industrial Park, Soff said tax incentives work.
“The granting of the (tax break) has worked exactly the way they’re designed,” he said. “To promote business development.”
The motivation behind both types of tax breaks, all three commissioners stressed, is economic growth.
“The hope, obviously, is that the long-term benefit of business expansion or development far outweighs the five or 10 year sliding scale of reduced revenue in the form of taxes,” Soff said.
In addition, Weiderspahn noted, Hudson would still be paying taxes on the land being used for the project and others would benefit indirectly from the tax break.
“This will help keep residents here,” Weiderspahn said, “and businesses in Cochranton will benefit from having those people there.”
Mike Crowley can be reached at 724-6370 or by email at email@example.com.