LHSD: residents voice opposition to TIF proposal
Nearly 50 people attended a special public meeting of the Laurel Highlands school board Tuesday, and most spoke out against a proposed development utilizing tax incremental funding (TIF), although the plan has been revised.
“TIFs are a financial tool to offset construction costs of a project and is traditionally used in areas considered to be blighted,” said Jesse Wallace, district superintendent.
The initial TIF plan from Cedarwood Development of Ohio for retail development Fayette Crossing in South Union Township called for about 70 percent of an estimated $290,000 per year collected in real estate taxes be diverted from the taxing bodies, including the school district, the township and the county, to the repayment of a 20-year, $2 million bond secured by the redevelopment authority. Cedarwood requested the taxing bodies consider the incremental tax program in order to complete the $25 million project.
Of the $2 million, $740,000 would be used to fill the underground mines with grout to stabilize the surface, while $356,000 will be earmarked for intersection improvements near the Sheetz service station/convenience store located at New Salem Road and Route 40, according to the initial TIF agreement.
Wallace explained the TIF for the school district calls for a 70/30 split, with the developer receiving 70 percent of the tax dollars to help offset costs of construction. The superintendent said he recommends the district retain legal counsel to determine the best course of action for the district.
“What does it mean to Laurel Highlands School District? That depends on what side of the fence you’re on,” said Wallace.
Randy Hake, Cedarwood’s vice president of development, addressed the group, saying the request for the TIF is necessary and funds will be used to correct and improve defects in the infrastructure as well as provide additional funding needed for roadway improvements, utilities and removal of rocks.
Hake said the site plan is being revamped and numbers re-run for the revised plan.
District residents Brian Oros and John Cofchin spoke out against the measure.
“The government doesn’t have a right to pick and choose who wins and who loses in business,” said Oros.
Cofchin urged the board not to vote in favor of the measure because he said it’s not in the best interest of the district.
“I wish Cedarwood all the success in the world. I just don’t want to subsidize your success. It should be subsidized by the private sector,” said Cofchin.
Janet Burkhart said she has represented the City of Pittsburgh Public Schools, who are utilizing TIFs to promote growth. She said money is generated through earned income, real estate and mercantile taxes in the long term when development is encouraged.
“The numbers aren’t really before you tonight, it’s just a potential plan. Your long-term gains and intended gains are far more than you were getting before,” Burkhart said.
Southside Works in Pittsburgh was developed utilizing a TIF, according to Burkhart, who added, “The entire city of Pittsburgh is designated blighted for TIF purposes and to bring in new development.”
Concerns were raised recently about the proposed TIF plan from Allan Wampler of Synergy Development that a local investment group had not sought nor received any subsidy for its construction of Hilton Garden Inn.
The initial Cedarwood proposal included a retail strip mall and a hotel; however, on Monday, a tentative agreement between two real estate developers eliminated a planned hotel for Fayette Crossing.
According to the updated plan, the hotel to be constructed by Cedarwood Development of Ohio on its 27-acre property along Walmart Drive will be replaced by a second retail center.
On Tuesday, Wampler indicated he supported the revised plan.
“What’s before you is 30 percent of hundreds of millions of dollars or 100 percent of nothing,” he said.
However, Garret Breakiron, owner of Uniontown Chiropractic Center and an investor in the group slated to begin construction of the Hilton Garden Inn, said he was not in favor of the TIF for Cedarwood.
“All costs to build my business came out of my pocket,” said Breakiron.
Attorney Jeffrey A. Mills of ReedSmith of Pittsburgh said the property would not be developed by Cedarwood without the TIF.
“They will not develop this property without assistance of the TIF. The $10,000 the district receives now will not change. With development, the district will get $116,000. All millage increases will go to the school district. This is not taking money out of your budget,” said Mills.
District resident Barry Grimm told the board he worries about the precedent.
“In the future, every developer that comes through is going to ask for a TIF,” he said.
Township solicitor Sam Davis said the supervisors see this as an experiment that would be monitored closely and the data reviewed for the future should the TIF be approved.
The measure appears on the director’s agenda at the regular meeting on Thursday due to the changes and review of the proposed TIF plan.