EMMAUS, Pa. — The borough of Emmaus, after multiple meetings, discussion and refinements, on Monday adopted a special tax zone for some borough properties.
In a roll call vote, the Local Economic Revitalization Tax Assistance, or LERTA, passed unanimously.
The legislation was prompted by Westrum Development Co.'s request for a "blighted" property at 300 Furnace St. that sits on an overgrown former foundry site left unused since 1995.
Borough officials say that the property is environmentally contaminated and functionally obsolete, and has been frequently referred to as the biggest blighted site in the municipality.
In a June presentation to council, Westrum Development illustrated its plan to convert the now-vacant lot at 300 Furnace St. into 144 apartments across four buildings.
The complex would consist of 80 one-bedroom and 64 two-bedroom units with 317 parking spaces on the 8-acre parcel.
According to the initial presentation, site investigation and clean-up planning took place in 2019 and 2020.
LERTA passage starts developer process
If the property is approved for the LERTA program, only a gradually increasing portion of taxes will be paid on the property's real estate value in addition to an annual flat fee for five years to incentivize development.
The final legislation included a five-year "sunset" provision, meaning the legislation would have to be passed again in five years for the program to continue.
Officials say already-approved properties would not be affected.
Eligible properties would be non-residential buildings that have been subject to an order by a government agency requiring the unit to be vacated, condemned or demolished.
Projects approved for a LERTA would only have to pay an agreed upon smaller set amount in real estate taxes, with full value slowly reintroduced over a maximum period of 10 years.
The mechanism is a state provision that gives local taxing authorities a tool to incentivize improvements to deteriorated areas or depressed communities.
It can apply to the repair, construction or reconstruction that attains higher standards of safety, health and economic use or brings it into compliance with laws governing such standards.
Only the part of the development being improved would be eligible for the tax break.
According to the Lehigh Valley Economic Development Corporation, LERTA zones exist in the Lehigh Valley in Bethlehem, Allentown and Upper Mount Bethel Township.
The project
Based on a presentation in June, Westrum is seeking a 100% property tax abatement starting in 2026, with tax increases of 10% over the next 10 years.
The developer would pay an established base tax to the school district, borough and county in lieu of full real estate taxes while it is implemented.
Westrum argued that once fully in effect, the real estate tax valuation for county, school and borough taxes could multiply as much as 49 times what the property's current use provides, with an estimated $120,000 added to local property taxes.
Construction was estimated to take place over the course of about a year.
Borough officials say the next steps for the property are an application to the borough, a recommendation from the planning commission, and approval from the Borough Council.
The project is set to appear before the Borough's Building Board of Appeals on Wednesday related to its construction plans.
