Emmaus Main Street Partners ask council to consider LERTA
At the request of the Emmaus Main Street Partners, Emmaus council members are researching Pennsylvania's local economic revitalization tax assistance law and its possible application in the borough.
LERTA is a tax abatement program and allows local taxing authorities to exempt businesses from immediate property tax increases for improvements to property if a municipal governing body determines it is located in a deteriorating area.
To implement LERTA, taxing authorities would need to agree to grant scheduled tax exemptions for the increased value of newly developed properties in the zone. The government agencies would still receive tax dollars equivalent to the current levels but after improvements occur there would be a schedule, over a period of up to 10 years, increasing property taxes incrementally rather than in one lump sum.
This schedule, in theory, would mean a developer would have time to increase and improve their business over the 10-year period. It is designed as an economic incentive for developers to improve properties in areas of need designated by a taxing body.
While Emmaus is weighing the pros and cons of using LERTA as an incentive to develop some of the aging industrial and commercial properties in the borough, the East Penn School District and the Lehigh County Commissioners would need to sign on for the program to effectively move forward.
The EPSD receives the largest portion of property taxes coming from Emmaus residents with the borough second and the county at a close third.
Lehigh County Director of Real Estate Francis J. Unger said the median assessed value of residential properties for the current tax year in Emmaus is $51,000. For a property assessed by the county at $51,000, roughly half of the actual home value for sale and insurance purposes, the property tax would amount to $3,666.90 for this year.
Of the total amount, the county would receive $606.90, the borough would get $675.75 and the school district would receive $2,384.25.
With the EPSD receiving more than the county and borough combined, a successful implementation of LERTA, even if the borough decides to recommend it after doing more research, would hinge on the support of other taxing bodies.
"Over the past few months, the EMSP has looked into several programs which would encourage property and business owners, developers and investors to consider Emmaus when considering business development and/or expansion," EMSP Executive Director Teri Madison said.
"Within the Borough boundaries, there are properties that are underutilized, vacant, deteriorated, and/or contaminated, and with the right improvements could return to being sites for viable and successful businesses."
The EMSP, a nonprofit organization with 138 dues paying members aimed at supporting and revitalizing Emmaus' historic downtown district, first asked council to look at LERTA at the Aug. 20 Emmaus Borough Council meeting. They also had representatives at the Sept. 4 meeting to answer any of council's questions about their support of the program.
"Along with remediating the property, and encouraging business development, the improvements would lead to added employment, patronage of local shops and restaurants, increased local tax revenue, and although intangible, a growing and exciting sense of community pride," Madison said.
Emmaus Borough Manager Shane Pepe, while reiterating council has not made a decision on LERTA, said council plans to invite representatives of EPSD and the county to a committee meeting to discuss the prospects of implementing the program.
"There are numerous areas that would be a possibility under the program," Pepe said. "Particular interest areas would be those that are vacant, run-down, or are underdeveloped."
He said a preliminary version of the map entails most of the southern end of the community, from east to west. Pepe explained council has not delved into specific properties to be in the zone but possible uses could range from developing the dilapidated factory along the single railroad tracks off of South 4th Street to a facelift of the commercial areas past Weis Markets along Chestnut Street.