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TMCNet:  Shippensburg board questions tax abatement in LERTA proposal [The Sentinel, Carlisle, Pa. :: ]

[June 17, 2014]

Shippensburg board questions tax abatement in LERTA proposal [The Sentinel, Carlisle, Pa. :: ]

(Sentinel, The (Carlisle, PA) Via Acquire Media NewsEdge) June 17--SHIPPENSBURG -- Though it was in support of granting the proposal, some members of the Shippensburg Area School District board questioned the need for a tax abatement in Georgia-Pacific's Local Economic Revitalization Tax Assistance proposal.


The board of directors Monday eventually voted 5-4 against the LERTA proposal for a regional distribution center in Shippensburg. The main reason for the refusal was due to the request for a 100-percent abatement in the first year.

The proposal stated, in part, that Georgia-Pacific seeks "a 100 percent abatement on year one with a 10 percent decrease in the abatement percentage each year. After a period of seven years, the taxing authority will receive 100 percent of the real estate taxes on the fully assessed property." Georgia-Pacific projected $597,000 in annual taxes at the end of the seven-year period.

"Why 100 percent the first year?" Director Thomas Enderlein asked. "We're looking for money (now)." Director Charles Suders said the board has increased taxes in the past to cover rising costs, but now someone is interested in developing the site.

"We need money," he said. "I don't know where else to get it." Enderlein also asked about Georgia-Pacific's plans at the end of its seven-year lease.

"If you leave in seven years, then we have an empty building," he said.

The proposed center would be a 1.5-million-square-foot structure, and it is expected to create between 50 and 60 full-time jobs.

Georgia-Pacific considered two locations, both in the Shippensburg school district, and last week selected the 110.4-acre Prologis Park on Walnut Bottom Road in Cumberland County as its preferred site.

It's that site that has proponents eager to move forward with the development plans.

Jonathan Bowser, of the Cumberland Area Economic Development Corp., said there has been no development at Prologis Park since it went on the market 11 years ago.

"You want to develop the land, and we're proposing to do it today and bring in that money for the school district," Georgia-Pacific representative Jolie Sims said, noting that LERTA offers tax incentives on the land, not the tenant.

Director Andrew Alosi, however, said he is also concerned with traffic management, especially with school buses that travel in that area.

Shippensburg resident Steve Brenize encouraged directors to consider whether a LERTA would benefit students, "If it's beneficial for the children of this school district, then yes," Brenize said. "But if it's not beneficial for the children of this school district, then no." Shippensburg resident Erica Burg said the school district shouldn't give tax breaks to multi-millionaire companies.

"Don't set a precedent for this school district," she said. "Either pro-rate dollars or walk away." Mickey Nye, president of the Shippensburg Area Development Corp., supported the LERTA.

Following a lengthy discussion, Director Don Hilbinger suggested a five-year LERTA with an abatement of 70 percent the first year, followed by abatements of 60 percent, 50 percent, 30 percent and 10 percent.

"I see long-term potential, but we are in a crunch," he said.

"I'm in agreement with Don," said Director Mark Buterbaugh.

Sims said Georgia-Pacific wants to be fair. She said she and her team will meet to review the terms of the board's offer.

The company hopes to begin construction by August and open next July.

Georgia-Pacific employs 35,000 people worldwide and 735 in Pennsylvania. Familiar brands include Quilted Northern, Angel Soft, Brawny, Sparkle and Dixie.

------ Monday on cumberlink.com SHIPPENSBURG -- The Shippensburg Area School District board of directors voted Monday against a Local Economic Revitalization Tax Assistance proposal from Georgia-Pacific for a regional distribution center in Shippensburg.

The proposed center would be a 1.5-million-square-foot structure. It would create between 50 and 60 full-time jobs.

Georgia-Pacific considered two locations, both in the Shippensburg school district, and last week selected Prologis Park on Walnut Bottom Road in Cumberland County as its preferred site.

On Monday, Georgia-Pacific submitted a proposal for a seven-year LERTA. The proposal stated, in part, "a 100 percent abatement on year one with a 10 percent decrease in the abatement percentage each year. After a period of seven years, the taxing authority will receive 100 percent of the real estate taxes on the fully assessed property." Although it supported a LERTA, the board voted 5-4 against the proposal because of the 100-percent abatement in the first year.

Georgia-Pacific is currently negotiating a seven-year lease with Prologis.

Georgia-Pacific employs 35,000 people worldwide and 735 in Pennsylvania. Familiar brands include Quilted Northern, Angel Soft, Brawny, Sparkle and Dixie.

___ (c)2014 The Sentinel (Carlisle, Pa.) Visit The Sentinel (Carlisle, Pa.) at www.cumberlink.com Distributed by MCT Information Services

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