Hawley Borough Council has been asked to consider a 10-year tax abatement program that would serve as an incentive for new business, as well as benefit the Hawley Silk Mill.
R. Anthony Waldron II, an attorney who is also one of the partners behind Hawley Silk Mill LLC, approached Council Nov. 14th with the request. The same proposal has been made to the
Wallenpaupack Area School District and the County of Wayne, to provide tax breaks.
As proposed, taxes on the assessed improvements to a commercial property would be exempted for five years from enactment of the tax ordinance. After that, tax would be imposed in 20 percent increments per year for five years; the final, 10th year, taxes would be back to normal.
The borough would be the governing body to designate what areas of the municipality where this program would apply.
Legal authority for this tax abatement comes from Act 76 of 1977, amended in 1998, known as the Local Economic Revitalization Tax Assistance Act (LERTA). Waldron stated that LERTA has been utilized in about two-thirds of the counties in Pennsylvania.
Waldron provided a sample draft ordinance for the Borough to consider. It recommends providing the abatement across the Business-2 (B-2) zone, which includes Main Avenue and part of Church Street, and also the area of Route 6 where the Silk Mill is located. Eligibility limits would be set; the draft recommends a minimum of a $500,000 investment and the requirement that at least 10 new jobs would be created.
This abatement would apply both to new businesses and industries, as well as the Silk Mill. Waldron offered approximate values for the tax assessments for the Silk Mill property. He said that before renovations began, the historic bluestone, former factory was assessed at about $700,000. Since the Hawley Silk Mill LLC made renovations, the assessed value of the property- not counting the Cocoon Coffee Shop- is close to $4.9 million.
School taxes represent about 68 percent of the taxes paid; 16 percent is county taxes and 14 percent, borough taxes. Waldron said that the School Board is willing to consider the abatement if the Borough approves and designates an area; the County is waiting to see what the School Board will do.
The law allows for the borough to use a different tax abatement formula than the school board or county. All three taxing entities do not have to be on board, although that would be desirable for the Silk Mill or other business investor.
He said that Marybeth Wood, Director of WEDCO, has been pushing for boroughs to consider LERTA, in order to encourage investment in commercial properties, save historic buildings and bring in jobs.
If enacted, he stated that Hawley Silk Mill LLC is not asking for a retroactive tax abatement. Rather, it would start upon enactment. If the ordinance could be passed this year, he asks that the abatement begin Jan. 1, 2013. School taxes would not be affected until August 2013.
Council agreed to set a public hearing to discuss the proposed amendment. The hearing will be at 6 p.m. on Wednesday, December 12, a hour prior to the regular Council meeting. Council would not vote on the ordinance until the regular meeting.