Who Should Pay? You or Land Developers?
Lehigh County should not follow East Penn in granting a LERTA in Emmaus
Westrum Development is a large real estate company building a new apartment complex in Emmaus. The East Penn school board debated for months whether to give Westrum hundreds of thousands of dollars in tax breaks under a program known as LERTA.
In the end, the board voted 5-4 to grant some, but not all, the tax breaks Westrum requested. I think this was a mistake, and I have more to say on that below. But first, I have two specific suggestions on how you can respond right now:
First, write our Lehigh County commissioners (at commissionersoffice@lehighcounty.org) to let them know you do not support further tax money going to this development. The tax breaks from East Penn are a done deal, but Lehigh County commissioners will vote on May 14th whether to grant county tax breaks on top of that.
Second, please vote for Bill Whitney in the upcoming East Penn school board primary election on May 20th. Bill spoke forcefully against giving unnecessary tax breaks to this developer, and was one of the four school board members who voted against it. We need people like Bill on the board.
Want more details? Okay, well let me start with the obvious: nobody likes taxes. But taxes also pay for things we all need and that are crucial for a healthy community. Things like roads and bridges, fire and police protection, and-- perhaps most important of all-- public schools.
The LERTA tax breaks given to Westrum by East Penn shift the burden of those taxes off the shoulders of a profitable development company, and onto the backs of individual taxpayers in the community. This isn't to say the project itself (at 300 Furnace St.) is a bad one. I've watched every minute of the hours of presentation and discussion held by the board over many months. I think the new apartments are a great way to use the property, which has been an abandoned and vacant brownfield for decades. Both Emmaus and the district will benefit from the additional housing-- and significant tax revenue-- it will provide. Westrum has a good track record of projects in other communities in Pennsylvania, and they have been honest and professional in their presentations to the East Penn board.
In short, the LERTA tax breaks aren't needed and they aren't fair.
I also think there are times and places when it makes sense to use public dollars in order to incentivize private development, particularly in situations-- like abandoned brownfields-- where cleanup or construction might not otherwise be economically viable. But this simply isn't the case for Westrum's Emmaus apartments. In short, the LERTA tax breaks aren't needed and they aren't fair. Three particular points stand out to me:
The apartment complex is already under construction, and will be completed whether or not they receive any public tax breaks. In fact, school board members repeatedly asked Westrum representatives about this, and they gave the same answer each time: The project will be completed, in the same way and on the same timeline, whether or not they receive any public money.
Tax breaks will not make the resulting apartments more affordable to the community. The development company was asked directly about this too. They estimate rent in the new complex will be $2,133 monthly for 1100 square feet, coming primarily from tenants with an estimated $100,000 or more in annual income-- and will not change to reflect the significant tax incentives they've received.
We have local residents who have also taken on redevelopment projects on old industrial sites, like the new homes across from the Emmaus Fire Station, who did not receive any public subsidies of their bottom line. So why should a large, outside development company have their profit margins publicly subsidized?
You can watch everything for yourself here (original presentation, in November), here (further discussion in December), here (further discussion in February) and here (the final vote, later in February). You can also see the slides from the original presentation here, and the final LERTA that was approved here.
Public officials often rightly point out that much of any budget is outside their direct control each year. The costs of labor contracts, physical buildings, insurance, and so forth can't just be arbitrarily cut in order to balance the budget when there is a shortfall. Well issues like this LERTA request are something they CAN control. I'm glad the East Penn board gave Westrum only about half the ~$800,000 they had originally requested, but I don't think this particular request deserved public subsidy at all. I thank Bill Whitney and the other board members who opposed it, and I urge you to reach out to our Lehigh County commissioners and ask that they vote against giving away county tax money on top of what East Penn (and the borough of Emmaus) have already committed to this developer.
Related posts you might find useful:
to EPSD, Feb 11, 2025:
Folks,
As some may know, I was very vocal against the Hamilton Crossings TIF. While they claimed that it was essential for mitigating the environmental damage from mining the site long ago, that was all self-contained and not a hazard to anyone. That TIF essentially enriched the landowners by allowing the developer to overpay for the land by just about that amount of the TIF. If push came to shove, they would have done the project anyway. In the meantime, EPSD will lose more than $10 million of revenue under the TIF, which Mr. Saul mentioned during part of his explanation about the expected 96.2% real estate tax collection.
On the other hand, the property in Emmaus is truly a nuisance to the community. The benefit for this project may be greater to the community with 1/20th of the cost to EPSD for HC TIF. So, I think I could go along with it, following Dr. Levinson's remarks. It's a close call.
Finally, I do want to mention a funding fallacy which was promulgated during last night's (2/10/2025) school board meeting, One member attempted to describe all of the budget priorities which this LERTA would delay, eliminate, or cause other millage increases during each of the 5 years of the LERTA. The problem with this logic is that it's based on spending the same money 5 times. You can't fund $2.2 million of new costs over 5 years with just the $600,000 lost from the LERTA. Ultimately those priorities will cost $600,000 every year, forever and continuing forever. Funding for the $200,000 for the first year's additions will need to continue for the 2nd through 6th years, plus funding for the $160,000 for the 2nd year's additions need to continue in the 3rd through 6th years, and so on, and those moneys won't be found by rejecting the LERTA. They're two separate things.
That's why Mr. Saul's amazing spreadsheet is so important. Work out the details yourself with even a simplified model and you would instantly recognize the fallacy of the board member's explanation and a 2nd member's seemingly nodding approval.
Excellent consistency on your part!
I do recall that as a new EPSD board member, you voted to rescind EPSD's earlier approval of the Hamilton Crossings TIFF, which has cost the district close to $10 million.
I believe that it was just before the County's vote on it, when they rejected it.
I was very vocal against the HC TIFF in 2013-14, even writing several articles for Patch, one titled something like "HC- Will EPSD be caught holding the bag alone?" since with no or little millage on the table from HC host Lower Macungie Township, EPSD taxpayers essentially funded the TIFF which ultimately enriched the previous owners of the allegedly damaged ground.
IMHO, this one was actually a much closer call - unlike HC, the Emmaus site for the apartments as it exists today really is a nuisance. The HC site wasn't bothering anyone. And here, the developer said that they would proceed anyway even without the LERTA.
I'll try posting my letter to EPSD from earlier this year which actually did support the Emmaus LERTA, pointing out the differences.