Taxing decision: East Cocalico working out deferment process for new UGI facility

By on March 22, 2017

The East Cocalico Township supervisors, at their March 16 meeting, unanimously approved moving forward to schedule a public hearing to receive testimony to help define the boundaries of the Local Economic Revitalization Tax Assistance, or LERTA, sought by UGI for its proposed corporate headquarters along Colonel Howard Boulevard.

The 10-year, property tax abatement UGI proposed would levy no additional tax on the building in year one. The second year the building would be taxed at 10 percent, with an additional 10 percent each successive year until the full assessment amount is reached after 10 years.

LERTA is written to permit tax abatement approval for any number of years up to 10, which is what UGI is seeking.

UGI officials estimate the new tax assessment will generate approximately $700,000 in increased tax revenue for the township and about $2.7 million for the school district. These figures were presented by UGI at the supervisors’ first meeting in March, where the total building cost was projected to be $28 million.

Tax revenues might be higher. UGI used a $35 million total building cost when working with the Cocalico School District, whose board also indicated a willingness to consider the tax abatement program.

Joe Swope, UGI spokesman for media relations, was asked about the differences quoted in total building costs.

“The final plan has not been approved and estimates for total cost fall into a wide range,” he said. “So either number could be correct. I’m not sure who generated each of the numbers. We’re not sure at this time of the final number.”

Supervisor Chairman Doug Mackley commented that in light of the magnitude of this project and the many unforeseen and likely, costly, site development challenges UGI encountered, this LERTA approach helps.

“UGI needs to be accountable to others who scrutinize their costs,” he said.

Some of the unforeseen site development challenges include safe access to the site, a complex traffic design, a long infrastructure extension for sewer and natural gas, wetlands, and possible bog turtles.

“I agree,” said Supervisor Noelle Fortna. “At first I was skeptical. It seems like a reasonable approach.”

“We’ll get the earned income tax right off the bat,” said Supervisor Alan Fry.

Supervisors noted this building will have an office force. It won’t, at least in the beginning, make any impact on the township’s infrastructure such as schools and municipal services.

Resident Jeff Mitchell asked about the importance of setting a precedent for future developers.

“This has never been done before,” said Mackley. “No one’s asked in the 20-some years I’ve been here.”

Fortna noted that this project is unique in its magnitude, positively impacts the local economy, will create new jobs, and the building will be an asset to the township.

Resident Dr. Ken McCrea asked exactly what amount of money the township is losing over the phase-in period.

“We can ask UGI,” said Steve Gabriel, interim township manager.

In other business, supervisors announced, following an executive session for personnel, that the position of township manager was offered to one of two candidates recently interviewed. The position, covered by Gabriel on a part-time basis, has been vacant for 13 months.

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