Properties considered for KOEZ
BY PAT FARNELLI
Susquehanna County Commissioners adopted a resolution authorizing a local entrepreneur to seek tax exemptions for several properties adjoining the former Bendix plant in South Montrose.
The property, owned by Adam Diaz and/or his wife Julie and/or the Diaz Family Limited Partnership, was designated as a proposed Keystone Opportunity Expansion Zone (KOEZ).
The commissioners also signed a Financial Support Agreement between Susquehanna County and the above named property owners, which states that payment in lieu of taxes will be made each year per the terms of the KOEZ resolution.
One of these specific properties is located near the South Montrose intersection of Route 29 and Ellsworth Road, and borders on Petersen Road in Bridgewater Township.
Several other Diaz properties included in the KOEZ are located between Old Country Road and Route 167, and are also in Bridgewater Township, according to Google Earth maps attached to the resolution. All of the properties are located within the Montrose Area School District.
The company is applying to the Commonwealth of Pennsylvania for the designation as a proposed KOEZ zone, thereby making the property eligible for certain state and local tax exemptions, according to the financial support agreement signed by the commissioners.
The KOEZ designation aims to foster economic opportunities, stimulate industrial, commercial, and residential improvements, and prevent physical and infrastructure deterioration within the county.
The resolution 2013-23 adopted by the commissioners authorized exemptions, deductions, abatements and credits for real property, net profits, mercantile and business privilege taxes within the specific area designated as a proposed KOEZ.
“Commencing on the day the Commonwealth approves the establishment of the KOEZ and during the terms of this agreement, the company shall make a financial support payment in lieu of real estate taxes as due each year for each 12 month period, to Susquehanna County in the amount of $1,183,” the resolution states.
However, the limitation on annual payment may increase by the percentage increase that would have occurred if the property was not exempt from the district’s real property taxes, according to the resolution. The annual payment shall increase or decrease according to the change in millage rate for the tax year as if the property was not exempt from local taxes.
Payments may not be increased for the duration of the designation or expansion based on an increase in the assessed value of property due to improvements made subsequent to designation of the KOEZ.
At a work session of the Montrose School Board held July 8, Anthony J. Ventello, Executive Director of the Progress Authority, told the board that this KOEZ project will result in improving the economic physical and social conditions within that area by stimulating existing businesses’ employment, creating new employment, and diminishing blight.
He said that for the Economic Development Authority, “doors have swung open for the area, including the former Bendix site,” which he said has “its environmental legacy under control.”
The site is being considered for adaptive reuse, he said.
Ventello said that the project intends to create or retain at least 1,000 full time jobs in Pennsylvania within three years of its designation by the Department of Community and Economic Development.
The agreement proposes that an end-user, qualified business will make a substantial capital investment in the proposed KOZ within three years from the designation by DCED.
At the July work session, Ventello told the school board that a water line will be needed to provide water to the jail, the former Bendix property, and the Diaz site. The Pennsylvania American Water Company will be constructing that water line, he said.
When asked about the other properties mentioned at that school board meeting, such as the Honeywell Corporation and/or the former Bendix site, Commissioner Alan Hall said, “Other property owners had interest and have not come forward or followed through.”
Hall said, “There is no tax break in Susquehanna County for him (Diaz), but if he gets a business in there, he may get a break on corporate taxes.”
Hall said that Diaz will be making an annual payment to the county in lieu of taxes. “That payment will be the same as what he is paying now.”
Hall continued, “His original proposal also eliminated the Earned Income Tax (EIT), but we took exception to that.”
According to Hall, “This alleviates bigger taxes like net profits tax, business privilege, and mercantile tax in Harrisburg.”
Visitor Alton Arnold asked, “Do you agree with this?”
Commissioner Michael Giangrieco answered, “It’s a win/win. Hopefully in the end, a million dollar complex will exist in that location, which will then be reassessed for much more tax value for the county.”