EMMAUS, Pa. — Developers from Westrum Development on Monday made a pitch to East Penn School District for property tax breaks on a brownfield site, after the borough recently approved a similar arrangement.
Westrum's proposal for 300 Furnace St. would transform a former foundry site that has laid dormant for 30 years into 144 apartments across four buildings.
The project would consist of 80 one-bedroom and 64 two-bedroom units, with 317 parking spaces, on the 8.5-acre parcel, which is walking distance from downtown Emmaus.
"Whether you're stepping back and looking at the community as a whole in Emmaus and even Lehigh County, it transforms a long-vacant industrial site to create a sustainable residential community in the district."Michael Maier, Westrum Development
No vote was taken on the proposal, which is set to be discussed in future meetings.
Arguing that the project is high-risk and could have unknown extra expenses as the blighted site is developed, the developer is seeking a LERTA, or Local Economic Revitalization Tax Assistance abatement, to underwrite its potentially thin profit margins.
Emmaus Borough Council approved a five-year LERTA for the site in late October, after approving the protocols for applying for a LERTA within the borough in September.
How LERTA would work
The LERTA would let the site owners pay the current property value's taxes of $8,432 every year, with an increasing percentage for a set number of years until it pays 100% of the property taxes.
That 100% real estate tax is estimated at more than $281,000.
A loss is projected for the first two years of implementation, beginning in the 2026-27 school year in the case of a 10-year LERTA.
If the number of schoolchildren added at the development increases from an estimated 10 to an estimated 20, the losses continue until 2030.
According to a letter sent to the Emmaus officials in September, the current total estimated cost of the project is $38.75 million.
There would be $4.5 million set aside from demolition, environmental cleanup, stormwater management, required environmental cleanup and other site work.
Michael Maier, a representative of Westrum who pitched the potential abatement, said it had the potential to add significantly to the local tax base without adding a huge burden to the school district, because the majority of housing would be single-bedroom units.
'A little bit of hesitation'
Maier said it would be the company's first such project in the area, and similar abatements are being discussed with Lehigh County officials.
Maier said the project is funded, but he believes the private-public partnership and the security to see it to completion is still of benefit to the local municipalities.
To activate the LERTA, all three taxing bodies — borough, county, school district — have to approve it.
"Whether you're stepping back and looking at the community as a whole in Emmaus and even Lehigh County, it transforms a long-vacant industrial site to create a sustainable residential community in the district," Maier said.
School board members held some reservations about the unclear number of school-age children who would be brought in, and revenue.
"I have a little bit of hesitation," board member Adam Smith said.
"Looking at your projections of students that were coming in conservatively, let's say it's eight, let's say it's nine. There's not a lot of buffer between cost incurred by the district and potential revenue stream, especially for those first five years."
According to the presentation, site investigation and some clean-up planning took place during 2019 and 2020 prior to Westrum's purchase.
