PMSD Board Fails to Move on Tax Breaks

JUN 22 2022, 5pm

SWIFTWATER – “Coolbaugh Township is under siege,” Coolbaugh supervisor Lynn Kelly told the Pocono Mountain School Board at the June meeting. “I am asking that the board absolutely does not consider giving tax abatements to the properties in Coolbaugh Township.”

Ms. Kelly was addressing an agenda item concerning possible tax breaks for half a dozen projects within the district boundaries, including two in Coolbaugh Township. Chuck Leonard was there to ask the board to participate in a discussion of potential abatement under the state’s Local Economic Revitalization Tax Assistance (LERTA) program, first adopted in 1977. Mr. Leonard is the executive director of the Pocono Mountains Economic Development Corporation which operates Pocono Mountains Industries, the Monroe County Industrial Development Authority, and the Pocono Mountains Industrial Park Authority.

‘They Are Coming After Us, We Are Their Target’

The Coolbaugh supervisor implored the district not to grant the projects in her town LERTA benefits. One projects include a warehouse, two 40-unit senior apartment buildings, two 32-unit open apartment buildings, plus townhouses. Her focus was on the warehouses. She told the board that her town has eight warehouses in various stage of development, with four of them already receving LERTA status and three others – including the two before the board that night – within designated LERTA zones.

Coolbaugh supervisor Lynn Kelly asks the PMSD board to reject tax breaks for warehouses in her town.

“These warehouses are coming after us for our property and are looking at our area as being high value to them and we are not going to benefit from it,” Ms. Kelly said.“We are their target, we are mission-critical for them.”


“People are not considering the hidden costs. A developer comes in and they promise ‘jobs & tax money!’ But right now we are discussing no tax money. And the jobs, the warehouse industry is moving to more robotics and those jobs are not in high demand,” she said.

“All they’re doing is coming in and tearing down our beautiful landscapes, polluting our waters, and putting out a big pile of concrete, light pollution, air pollution, and congestion on our roads. And we are getting what for it? Headaches. We’re getting all the other complications that come with the traffic and the damage to our infrastructure. We have all these hidden costs and no tax money coming in? It is not fair to the residents. The residents are getting the costs externalized to their tax dollars.”

LERTA is a 45-year-old state law that permits local taxing agencies to encourage development in “deteriorated” areas by reducing real estate tax burdens for up to ten years. Under the program, property owners continue to pay the same real estate taxes they paid before the construction.

Once the work is done, the value of the property goes up, which means the real estate taxes paid would go up. Under the LERTA programs as utilized in Monroe County, the real estate taxes on the increase in value are abated, in declining amounts, for ten years. In the first year, 100% are abated, 90% the second year, 80% the third, and so on until the full amount of taxes are paid beginning in year 11. Throughout the ten years, the owner continues to pay 100% of the taxes based on the value of the property before the construction.

LERTA Said to Put $20 Million Annually Into District

A frequent criticism of the program is that the company leaves after 11 years. Mr. Leonard said that wasn’t true, at least not in Monroe County. Currently he said there are no empty warehouses in the county.

While the Johnson & Johnson/FedEx distribution center is winding down, Mr. Leonard said they already have three or four companies looking at the space. He also pointed out that the real estate taxes continue to be paid, even if the building is empty.

Chuck Leonard argues that LERTA brings jobs and tax income to the area that would not be there without the program.

Mr. Leonard’s assertion that LERTA “districts generate in excess of $20 million on an annual basis to your (PMSD) budget. That doesn’t count the other income, the EITs and the transfer taxes. The Johnson & Johnson building transferred and that generated a $900,000 payment,” drew a sharp retort from board member Ronnie Byrd.

“You mentioned 20 million dollars. I still don’t see that,” said Mr. Byrd, who resides in Coolbaugh.

“Have you ever seen (Route) 196? It can’t even control the people that live there now and you want to put more there? Make me understand that.”

“LERTA is an important tool for us,” Mr. Leonard said. “It helps us overcome objections based on the comparatively high taxes we have compared with other communities.” Monroe County has the highest real estate taxes in the state. They are 52% higher than the state average, due to high school taxes.

Mr. Leonard emphasized the jobs that LERTA companies have brought into the county. He said there are over 3,000 jobs in the LERTA zones.

‘These Warehouses Are All Going Up in Places the Towns Said They Want Them to Go’

Warehouse wages in Monroe County, he said, average $51,000 a year.

“We don’t have just warehouses,” he told the board. “We have many manufacturing facilities in our parks and without LERTA many of those companies would not be with us today.”

Unemployment in the county is the highest in the region, he said. “We’re trying to provide jobs for people so they can go to work here, without driving out of the county.”

Acknowledging that increased employment and commerce in the industrial parks brings with it increased burdens on municipal infrastructure, Mr. Leonard said that the towns have the regulatory power “require that company to mitigate whatever impacts they are going to have on roads, water, sewage, etc.”

Board member Ronnie Byrd doubts Mr. Leonard’s claim that LERTA properties currently contribute $20 million a year to the district in real estate taxes.

Board member Nathan Strunk said he was concerned about the environmental impact – “When do we degrade our natural resources to the point we no longer have a tourism industry?”

In Monroe County, Mr. Leonard said, “companies are required to meet the most stringent environmental requirements anywhere in the Country. Our permitting process is 12-18 months vs 6-8 months in other counties.”

He noted that nearly 70% of all streams in Pennsylvania which get enhanced protection from development are in Monroe County.

He denied that the projects they are supporting are degrading any natural resources. “We’re not developing any sites that are not zoned appropriately. All of these sites these municipalities have zoned with the idea that they would eventually be developed. This is where the municipalities have decided this is where they want to go,” he said. “We do not encourage the changing of zoning . We target properties that municipalities have already decided that is the development they want to see there.”

At three different points in his presentation, he reminded the board that they were not being asked to approve the properties at the meeting. He asked only that they adopt a motion to agree to consider the proposed LERTA sites and participate in the process.

“All we are asking from you tonight is to agree to participate in the process of reviewing our request.” The process would include a public hearing with all of the involved taxing bodies – the county and the towns involved – at which public input could be gathered.

Board member Chris Grape-Garvey asked him what would happen if the board did not do that at that meeting, “wouldn’t these developers just go forward anyway?”

“Then this all just goes away,” he responded. He said the developers have told his agency that they would not proceed without the tax breaks. “That’s what they told us, of course, we do not know for sure.”

At the end of his presentation, board president Marion Pyzik simply moved on to the next agenda topic without asking for a motion on the LERTA presentation.

After the meeting, she told us that she didn’t realize that they wanted the board to take action at that meeting.

The board has canceled its July meeting. The next meeting is at 7pm on August 17, in the Pocono Mountain Administration Building on the Swiftwater Campus.

The Eight Properties
Asking for Tax Breaks

H.J. Davis Inc., Route 611, Coolbaugh Township, 27 acres, Zoned Industrial;

Lynch Corporation, Route 423, Coolbaugh Township, 119 acres; Zoned Commercial (C3);

Pocono Star Properties, Route 940, Mount Pocono Borough, 79 acres Zoned Commercial (C2);

Great Wolf Lodge, Route 611, Pocono Township, 96 acres, Zoned Commercial;

Trapasso Enterprises, Sullivan Trail, Pocono Township, 56 acres, Zoned Commercial;

Trapasso Enterprises/Trap & Winot Enterprises, Route 611, Pocono Townshi0,p 95.5 acres, Zoned Commercial & Recreation;

MarJim Inc., Mackes Road, Blakeslee Corners, Tobyhanna Township, 42.5 acres, Zoned Commercial/Industrial; and,

Paradise Summit & JSPA Realty, Route 611, Paradise Township, 172 acres, Zoned R2.

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