Bethlehem Press

Monday, December 11, 2017
PHOTO BY BERNIE O’HAREBethlehem Housing and Community Planner Allyson Lehr back in August told council she believes a LERTA will help keep this area from becoming a “problem neighborhood.” PHOTO BY BERNIE O’HAREBethlehem Housing and Community Planner Allyson Lehr back in August told council she believes a LERTA will help keep this area from becoming a “problem neighborhood.”

Council votes to allow LERTA in city

Thursday, October 12, 2017 by Bernie O’Hare Special to the Bethlehem Press in Local News

By a 5-3 vote, Northampton County Council approved a LERTA program in North Bethlehem at its Sept. 21 meeting. Ken Kraft, Seth Vaughn, Mat Benol and Bob Werner voted yes. Hayden Phillips, Matt Dietz and President John Cusick cast no votes. Peg Ferraro, who did support the LERTA, missed the meeting. This left everything in the hands of Glenn Geissinger, the sole council member who has said nothing about this subject.

He voted yes.

LERTA is an acronym for Local Economic Revitalization Tax Assistance.

Property owners inside a LERTA zone may apply for a tax break for improvements that increase assessment, upon which all real estate taxes are based. They will continue paying full taxes on the land assessment, but the increase in assessment resulting from improvements like a new roof or front porch can be phased in gradually over a period of 10 years.

Traditionally, NorCo Council will approve a LERTA if it has been approved by the city and school district. But the sheer size of the area, combined with LERTA failures in Easton and philosophical concerns about picking winners and losers, made county officials hesitate.

What is this area? It’s the northern neighborhood near Moravian College. Its boundaries are Maple Street on the east, Main Street and Mauch Chunk Road on the west, Broad Street on the south and East Laurel on the north. “It’s not the most depressed in Bethlehem, but it’s not the most affluent, either,” said Bethlehem Housing and Community Planner Allyson Lehr back in August. She said the area could go either way. She believes a LERTA will help this area from becoming a “problem neighborhood.”

Why a LERTA? Here’s what Lehr told council in August.

• There are 8,156 properties in this area, and 59 percent of them are rentals. A LERTA gives a landlord an incentive to make improvements.

• A majority of properties inside this district are rated C or D by county assessors.

• Three schools – William Penn Elementary, Liberty HS and Thomas Jefferson – are either inside or immediately outside this district. They have all shown an alarming increase in the percentage of students who receive free or reduced lunches. At Liberty HS, that percentage has increased from 34 percent in 2005 to 55 percent in 2015. At William Penn Elementary, 77 percent of the children are getting free or reduced lunches. It’s 72 percent at Thomas Jefferson. “There’s an indicator that there’s some kind of economic distress in that area,” observed Lehr.

• 208 homes in the proposed LERTA district are vacant in what should be a desirable area just a stone’s throw from the downtown.

LERTA in Easton. - After Lehr’s presentation, a Right-to-Know request was filed for the county’s assessment records of a smaller LERTA in Easton, which also includes residential properties.

1. The Easton LERTA district comprises 859 properties of all kinds, from residential to commercial and industrial. While this is quite large, it is only about 1/10th the size of the 8,156 properties for which a LERTA is being sought in Bethlehem.

2. In the five years that Easton’s LERTA has been in effect, only 72 properties have enrolled in the program, with 56 in progress and 16 under construction. This is a fairly low number.

3. Only 46 residential properties have taken advantage of the LERTA. Even fewer, just 26, are commercial.

4. Twenty-one of these properties are completely exempt from all real estate taxes because they are in the Keystone Opportunity Zone, another tax incentive program in which virtually all taxes, except federal income taxes, are exempt. This includes the Simon Mill (19 parcels), old city hall (one parcel) and Governor Wolf Building (one parcel).

Very few properties enrolled in Easton.

Bethlehem, unlike Easton, recently adopted a Financial Accountability Incentive Reporting (FAIR) program, thanks to Bethlehem Council President Willie Reynolds. This will enable Bethlehem to keep an eye on its LERTA.

When it was time to discuss the ordinance on its merits, Hayden Phillips and Matt Dietz repeated their argument that the government was “picking winners and losers.”

John Cusick’s opposition was a bit more nuanced. First, he complained about the the 10-50-50 split among the three taxing entities. Second, he thinks the area is simply too large. Third, he’d like to see the city use all the other tools available.

“This whole body is amazing to me,” said Ken Kraft.. “We’re not picking winners and losers. We’re taking an area out of blight.”

Kraft also said Bethlehem is more proactive than Easton.