Emmaus officials are considering offering tax breaks to a developer who wants to build a high-end apartment complex on a long-blighted property in the borough.
The Local Economic Revitalization Tax Assistance abatement would let Emmaus phase in real estate taxes for improvements or development on an income-producing property.
The property must either be in a deteriorated area or be ordered to be condemned, vacated or demolished, Chris Gulotta of the Lehigh County Redevelopment Authority said during a June 17 Borough Council meeting.
The LERTA would incentivize developers to redevelop a property while allowing the borough to receive the same amount of taxes as before; the abatement is temporary and only for a property’s increased taxable value as a project moves forward.
If a developer doesn’t comply with borough code or fails to pay taxes, there’s no provision for the borough to recapture any tax benefits, Gulotta warned.
“It’s not the silver bullet,” Gulotta said. “This is [an] incentive that is frequently used in tandem with other incentives to make projects feasible.”
In this case, the LERTA would help Westrum Development Co. build high-end apartments at 300 Furnace St. , a blighted warehouse property that Borough Manager Shane Pepe said has been vacant since 1995 and that Westrum is looking to buy early this month.
Borough Council first gave approval to apartment plans in 2020 , and agreed to change zoning of the Furnace Street property and adjacent acres on Second Street to accommodate the development. The plans called for 144 apartments across six buildings.
The borough brings in roughly $2,400 in annual taxes from the Furnace Street property, according to Pepe, which could go up to roughly $121,000 per year after the project is finished.
Pepe explained the tax break would offset rising costs for the project, which is approaching $40 million and faces issues such as a hydraulic fluid problem under the property and increasing interest rates.
After Borough Council decided to have solicitor Jason Ulrich create an ordinance for the LERTA at the June 17 meeting, officials will now have to figure out how long the LERTA should last, how much in taxes the LERTA would abate each year, and whether the LERTA should move forward at all.
The borough will also have to hold a hearing with the public and other agencies for feedback.
Council member Brent Labenberg said he wouldn’t favor the LERTA if the apartment project is moving forward regardless.
“To me, then it just looks like we’re giving somebody that can afford it a tax break,” he said, later adding that he’d like to see if East Penn School District would move forward with a LERTA for the property.
Both Lehigh County and the school board would have to approve the tax plan, as it would reduce the taxes they would receive from the property.
Westrum couldn’t be reached for comment.
Council member Chris Hoenscheid said he supports the LERTA, especially if not approving it jeopardizes the project.
“I think it also shows our support for the revitalization of not just that property, but potentially other properties in the future,” he said.
Council member Shana Baumgartner also said she’d support the tax abatement if it means tenants get more affordable rents at the planned apartments.
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