Newly tallied Luzerne County assessed values shed light on what real estate taxes will be paid on a massive project site in Hanover Township and Nanticoke across from Luzerne County Community College.
Missouri-based NorthPoint Development bought the 322-acre tract known as “Hanover 9” from the nonprofit Earth Conservancy last year for nearly $10 million, but the county had to calculate new assessed values because the acquisition covered only portions of existing parcels.
While taxing bodies approved a phased 10-year tax break on new construction, NorthPoint must pay full taxes on the land throughout the break. The land had been tax exempt under Earth Conservancy ownership.
The grand total to all taxing bodies for the land, according to analysis of county property records: $240,056.
Hanover 9 contains four parcels. The 65.04 acres in Nanticoke has been assessed at $1.95 million. The land values set for the three Hanover Township tracts: 20 acres, $600,000; 228.08 acres, $5.7 million; and 8.42 acres, $227,300.
With the land assessment totaling $8.48 million, Luzerne County will receive $50,674.
The total assessment of the portion falling in Hanover Township is $6.5 million, which equates to payments of $35,911 to the township and $118,668 to Hanover Area School District.
For the Nanticoke piece, NorthPoint must pay $11,562 to the city and $23,241 to the Greater Nanticoke Area School District.
During a groundbreaking ceremony at the site in November that drew a contingent of area officials, NorthPoint said it is constructing three buildings at Hanover 9 projected to create 1,548 new jobs with an average salary of $41,000.
Brent Miles, NorthPoint’s economic development vice president, could not immediately be reached for comment Friday on the project status or the amount of the new land assessments.
Under the tax break approved by elected officials, NorthPoint will receive full real estate tax forgiveness on the new construction building portion of the assessment for seven years, 90 percent exemption in the eighth year, 80 percent in the ninth and 70 percent in the 10th and final year.
This tax break falls under the state’s Local Economic Revitalization Tax Assistance program, commonly called LERTA.
Miles has said one 1.4 million-square-foot building planned for the Hanover Township part of the site will be the largest commercial structure in Northeastern Pennsylvania and is expected to be occupied by a “very well-known company” that would attract national publicity when a deal is announced. It’s still not clear who that tenant might be.
Hanover 9 runs along Route 29 on the east side and will be accessible from both the new South Valley Parkway and Kosciuszko Street.
If NorthPoint’s first major local project is any indication, taxing bodies stand to gain significant revenue when its new buildings become taxable.
The company brought Chewy.com, Adidas and Patagonia Inc. to its first 172-acre project on New Commerce Boulevard in Hanover Township, which NorthPoint calls the Hanover Ridge Trade Center.
However, theses three properties won’t be taxed — land or buildings — until 2025 because they have full Keystone Opportunity Zone (KOZ) tax exemption through 2024. A LERTA kicks in for 2025 and 2026, with the structure discount ranging from 80 to 100 percent, depending on the taxing body.
Two of these properties — the ones occupied by Chewy.com and Adidas — already are in the county’s top 20 highest commercial assessments, records show.
When all three are added to the tax rolls, taxing bodies will collect a total $2.86 million, analysis shows. This assumes the new assessments are not appealed and that tax rates will remain the same.
• Adidas — $41.5 million ($2.68 million land, $38.86 million building).
Taxes will be $1.23 million — Hanover Area School District, $754,970; county, $248,216; and township, $228,468.
• Chewy.com — $37.96 million ($1.52 million land, $36.4 million building).
Taxes will be $1.1 million — school, $689,992; county, $226,852; and township, $208,804.
• Patagonia — $17.07 million ($940,200 land, $16.1 million building).
Taxes will be $506,207 — school, $310,291; county, $102,016; and township, $93,900.
NorthPoint recently purchased another 173 acres from Earth Conservancy and the Greater Wilkes-Barre Chamber of Commerce along Dundee Road in the township for its third development, which also received a LERTA tax break, records show.
Like the Hanover 9 break, the company will pay full taxes on the land, which was tax-exempt, and receive a phased discount on the structures over 10 years.
According to deeds recorded at the end of 2018, NorthPoint purchased the 90-acre Earth Conservancy property for $2.75 million and the 83-acre chamber parcel for $4.2 million.
The county has assessed the land purchased from Earth Conservancy at $2.7 million, which amounts to payments of $48,941 to Hanover Area, $16,091 to the county and $14,810 to the county.
A value has not yet been set for the parcel NorthPoint purchased from the chamber.
NorthPoint representative Miles has said his company must invest millions to prepare this site for development, in part because the portion being purchased from the chamber contains wetlands requiring mitigation. His company also must construct an access road over a large UGI Energy Services line.
When the land is prepped, NorthPoint plans three structures totaling 1.375 million square feet on the tract along Dundee Road. Possible tenants have not been publicly identified.
While this new building under construction on Kosciuszko Street in Nanticoke will receive a tax break for years, the property owner and developer must start paying taxes on the land, which was recently assessed by Luzerne County.