John McCrea plans to take legal action against fellow Big Spring School Board members to block an incentive package that extends an estimated $800,000 in tax credits to the developer of the Unilever warehouse in Penn Township.
McCrea cast the only dissenting vote Monday in a 7-1 board decision to support a resolution that designates the warehouse construction site a “deteriorated area” under the Local Economic Revitalization Tax Assistance Act.
During the meeting, McCrea advised board members that he will seek an injunction from a Cumberland County judge to stop the execution of the incentive package and the designation of the land as “deteriorated.”
McCrea will also seek a declaratory judgment against what he called an illegal action by the Penn Township board of supervisors, who adopted an ordinance on March 1 formally establishing the boundaries of the LERTA area.
Big Spring School District has been working with the township on a proposal that would offer a LERTA to the Panattoni Development Co. so the California-based company could build a 1.4 million square-foot warehouse at the Key Logistics Park off Centerville Road.
The new warehouse could generate up to 250 new jobs and would bring in Unilever, a major global supplier of brand name products, to the Big Spring School District. The Logistics Park is already the site of an Office Depot warehouse that employs about 275 workers.
Under the proposal, the developer/owner of the warehouse would only pay 35 percent of the assessed value on improvements over the next five years. Speaking out against the resolution, McCrea wants the district to receive 100 percent of this revenue.
“There is no way this school board should compound this mistake and this illegal action by the supervisors,” McCrea said. He added this incentive will take $800,000 out of the pockets of school district taxpayers over the next five years.
‘In no way...deteriorated’
McCrea also questioned how the Unilever site could be in need of revitalization when it was never previously “vitalized” with development.
“This is more or less an empty tract,” he said. “This is in no way, shape or form a deteriorated area.”
McCrea believes the term “deteriorated area” should apply more to abandoned industrial and commercial sites in urban centers. He noted how Carlisle defined the borders of its LERTA zone as the core area around the downtown while warehouse tracts on the west end of town were not designated LERTA eligible.
In response, school board president Wilbur Wolf Jr. said attorneys representing the school district, township and county have all reviewed the resolution and determined the Unilever site qualifies for tax credits under LERTA.
Township supervisor Gary Martin said it seems counterproductive to him that McCrea should choose to file legal action in tough economic times that could cost the school district and township money in solicitor fees.
“This land has deteriorated from its original use, which was prime farmland,” Martin said. He added the tract has not been used for agriculture since 2005 when the developer first purchased it. The only use was as a staging area for construction vehicles and supplies during the building of the Office Depot warehouse.
Township solicitor Marcus McKnight III said that technically the whole township qualifies as a “deteriorated area” under LERTA because the area has fallen under tough economic times. It is not just that particular tract of land, he said.
He explained how the supervisors approved the designation because it would strengthen not just the township, but the school district by stimulating job growth. Penn Township was in competition with other locations and were it not for the incentive package and its attractive tax rates, Unilever and its jobs may have gone elsewhere, McKnight said.
Weighing the benefits
He added the incentive packages enables the project to get underway sooner as opposed to later, meaning the school district could start to receive revenue from the new construction this year.
“We’ve been working on this for such a long time,” McKnight said. He added only now, at the 11th hour, did McCrea decide he has an issue with the incentive package and the land designation.
McKnight questioned where McCrea was years ago when this agreement was being discussed. “He was not present at the public hearing back in March,” McKnight said, referring to when the supervisors adopted the ordinance.
“The construction of a new warehouse is going to be financially to our benefit,” Martin said. He added the supervisors have an agreement with the developer whereby Penn Township will receive about $52,000 in annual revenue over the next 13 years.
By voting in favor of the resolution, the majority of the school board has done what is in the best interest of the school district, Martin said. “McCrea is certainly entitled to his opinion.”