Luzerne County Courthouse A new real estate tax break request before Luzerne County Council stands out because the developer would make four payments totaling $945,000 in lieu of taxes.
County Councilman Chris Perry praised developer Hillwood Properties for coming up with the “unique plan.”
Numerous developers sought tax breaks in recent years, and “nothing compares to this one,” Perry said during the presentation at council’s July 23 work session.
“I applaud you for thinking outside the box,” Perry said.
Council Chairman John Lombardo concurred, saying “this is definitely not the norm” for tax break requests. He said he’s confident there will be “serious consideration” on approving it, with a vote possible at council’s next meeting Aug. 13.
A frequent critic of breaks, County Councilman Harry Haas said this Hazle Township project site clearly meets the definition of distressed because it is “beyond the pale” and could not be developed without assistance.
The 360-acre swath along Route 309 is pockmarked with some of the worst remnants of past coal operations — waste ponds, deep open pits and multiple levels of subsurface mines — that the developer expects to spend $10 million correcting before construction can begin.
“This, in my opinion, truly is worth a consideration of LERTA,” Haas said, referring to the blight-reduction Local Economic Revitalization Tax Assistance (LERTA) program that provides up to a decade of real estate tax discounts on new construction — but not the underlying land.
Proposal details
Hillwood is seeking 100% county real estate tax forgiveness on new construction the first seven years, a 90% discount in the eighth year, 80% in the ninth and 70% in the tenth and final year.
Four structures would be built in phases, with the break on each triggered when the county assesses the structures following their completion.
As consideration for passage, the developer — operating as Hazle Blue Bldg 1 LLC — will make payments to the county in lieu of taxes for each of the four planned buildings.
These payments amount to $2,500 for each acre involved in the applicable structure.
The initial $247,500 payment on or before Sept. 20 will apply to the first building on 99 acres.
The remaining payments will be timed within 30 days of the date building permits are issued, with estimated dates listed, according to the proposal:
• $348,750 in May 2026 for the second building on 139.5 acres.
• $140,000 in May 2028 for the third building on 56 acres.
• $208,750 in May 2030 for the fourth building on 83.5 acres.
As required by LERTA, payments on the land will continue throughout the program.
The county currently receives $5,134 in taxes on the mine-scarred land, Hillwood’s submission said.
Hillwood estimates county tax payments on the land will rise to approximately $40,000 after the site is purchased by 2026.
A chart in Hillwood’s presentation projects the gradually increasing amounts the county would receive each year with the land taxes, payments in lieu of taxes and phased expiration of tax breaks factored in.
If the chart holds true, the county’s receipt will grow from $257,723 in 2024 to $1.9 million in 2034. By 2040, when the staggered breaks on all four properties have expired, county receipts are estimated at $10.2 million annually, it said.
The other two taxing bodies already have approved LERTAs for their real estate taxes that contain payments in lieu of taxes, said Attorney Conrad Falvello, who is representing Hillwood. Hazle Township will receive a total $378,000 in lieu of taxes, with the initial $99,000 already paid, he said. The Hazleton Area School District has received $495,000 toward its $1.89 million payment, he said.
Public danger
Tax revenue aside, Hillwood’s proposal emphasized the importance of cleaning up the site now identified as the “Hazleton Beltway Center.”
“The land is also dangerous. It is scarred with high wall pits, pervasive undermining and most dangerously, numerous mine silt ponds, similar to those that caused the death of a 37-year-old mother of two from Lackawanna County whose ATV sunk into the mine silt pond, causing her death,” it said.
Social media also “has people scavenging for crystals” at the site, it said.
Regarding coal waste ponds, Hillwood plans to remove more than 10,000 dump truck loads of silt.
High wall pits with steep drops will be regraded to reduce hazardous fall conditions, it said.
Extensive underground mines have been identified. Many will be filled or supported to both allow development and greatly lower the risk of collapse, it said.
Jared Souders, Hillwood’s vice president of development, told council some pits are 40- to 50 feet deep, and the property is not marked or fenced.
“There’s a lot of trespassing and ATV riding because that is open land,” Souders said.
Based in Dallas, Texas, Hillwood has an office in Allentown and previously developed a building occupied by Samsung on Route 309 in Hazleton, it said.
Hillwood is taking over the new four-building project from Blue Cup Ventures LLC. County council had unanimously approved a flat 65% LERTA over 10 years for Blue Cup in April 2021, but that package expired without activation because the buildings had to be completed within three years of council adoption — an unusually short period.
The new proposed tax break package contains the more standard 10-year window for all construction to commence.
Blue Cup had said the project would include removal of a giant culm bank fronting Route 309 that greets motorists as they cross the county’s southern boundary, and Haas asked about that plan.
Souders said the bank is “on the periphery” and not part of Hillwood’s development, but reclamation already has been underway to eliminate the bank.
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