East Cocalico supervisors grant UGI 10-year tax abatement

By on June 7, 2017

The East Cocalico Township supervisors and UGI officials answered residents’ questions at a June 1 hearing regarding the 10-year tax abatement being sought on property UGI will develop in the township.

The hearing which was held in conjunction with the regularly scheduled prior meeting.

A 100,000-square-foot building with about 330 employees is planned for the 32.7-acre site along Colonel Howard Boulevard and Route 272.

The land, currently owned by Reading Health System, has ideal access with Route 222 and the Pennsylvania Turnpike less than a mile away.

This location is considerably more costly to develop than the customary tract of land. Some of the challenges: water and sewer connections are 1,700 feet away, a more complex entrance road is required than first planned, and a buffer area to address environmental concerns is needed.

The developers of this substantial, approximately $23.8 million project, sought tax relief under the Local Economic Revitalization Tax Assistance Act, known as LERTA.

Supervisors unanimously approved the LERTA plan to waive taxes on the building the first year. The second year UGI would pay 10 percent of the assessed tax. The third year UGI would pay 20 percent of the assessed tax on the building, with 10 percent more added annually until year 11, when all taxes assessed on the building would be due.

UGI would still continue to pay the taxes assessed on the property.

Paula Leicht, an attorney representing UGI said corporate officials are using the $271,000 county land value assessment figure in their calculations, even though the re-assessment value is $291,000. This value, which is posted online, was confirmed in conversation with the assessment office after the May 4 hearing when supervisors established the boundaries of the property eligible for LERTA.

“We hope to begin construction in late 2017 with occupancy at the end of 2018,” said Daniel J. Platt, UGI vice president for finance.

Two questions from residents centered on whether UGI would seek a lower assessment and the language in LERTA that states “the tax exemption is for new construction in deteriorated areas of economically depressed communities and for improvement to certain deteriorated industrial, commercial and other business properties.”

Several residents stated that the area doesn’t, in their opinion, meet the test of an economically depressed area. LERTA uses the word, “and,” which they believe meant both exceptions needed satisfied.

Solicitor Tom Goodman and Leicht said this terminology wasn’t addressed because it wasn’t legally necessary. They cited other cases in the county where LERTA met the test of being a deteriorated property.

Attorneys noted that it is a person’s right to seek reassessment consideration. Leicht said that seeking reassessment is a complex process, not one that happens quickly. UGI didn’t indicate whether it would or wouldn’t be seeking reassessment in the future.

Supervisors concluded by welcoming UGI to the township. It’s a desirable addition to the Route 272 business corridor and will open desirable job opportunities in the area, they said.


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