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South Middleton appoints two to future TIF committee on proposed project

This article was published on Cumberlink.com on Tuesday, June 7, 2016.

South Middleton School Board Monday appointed two representatives to a committee being formed to consider Tax Increment Financing as a strategy for infrastructure improvements planned for a mixed-use development proposed for 248 acres northeast of the Fairfield Street/York Road intersection.

Operations and Business Manager Matthew Ulmer and board member Steven Bear will represent the school district on a committee that could also include representatives from South Middleton Township and Cumberland County.

The Cumberland County Industrial Development Authority plans to approach the township board of supervisors and the county commissioners in the hope of empaneling a committee within the next one to two months.

If formed, this committee will be tasked with developing a TIF plan over a nine-month period to identify what improvements to finance using an agreed-upon portion of future property tax revenue increases to cover debt service payments.

Once work is complete, the CCIDA will present the plan to the school district, township and county asking each governing board to either opt-in or opt-out of what is being proposed. This could happen within a 10-to-11-month timeframe.

Naming representatives to a TIF committee does not obligate South Middleton School District to opt in or out of a TIF, Board President Michael Berk said.

School board members responded to the CCIDA request Monday by naming representatives without committing the school district to a strategy that provides an incentive for development by leveraging future increases to pay upfront infrastructure costs.

“We need to be at the table,” board member Tom Merlie said. “We need to have a voice to make sure this district and its stakeholders are heard.”

The purpose of this process is to vet any questions board members may have regarding the feasibility of TIF as a strategy, said Jonathan Bowser, chief executive officer of the Cumberland Area Economic Development Corporation, which oversees the CCIDA.

In this case, the main purpose of the TIF is to help finance a $5 million road that would run through the middle of the mixed-use project site and connect Trindle Road in the north to York Road in the south. Other improvements planned for this development include water and sewer extensions and storm water upgrades.

A conceptual plan for the 248 acres includes a sit-down restaurant, a bank, a fast food restaurant, a medical office and 537 residential units along with 268,000 square feet of commercial retail space, 67,600 square feet of office space and 75,200 of light industrial and manufacturing space.

The light industrial and manufacturing uses will be located along Trindle Road on land owned by RSJ Holdings north of Lisburn Road. Heritage Developers own the rest of the land. The retail and commercial uses will be located along York Road while 216 townhomes, 192 apartments and 129 single family detached homes will be located in the middle portion of the project site.

The 248 acres currently assessed at $1.37 million will grow in value to about $171 million once the project is completely built out within 15 to 20 years, Bowser said. He added the proposed development would create about 546 temporary construction jobs and 975 permanent onsite jobs.

School board President Berk asked if CCIDA had any research proving the need for additional retail space given that the Carlisle Crossing Shopping Center located nearby has a large number of vacancies. Bowser said the vacancies were caused by the current property owner increasing the rent on the retail space.

South Middleton Township supervisors have made it clear the connector between York and Trindle roads must be in before any other development could occur on the 248-acre site.

A TIF is one way to finance an improvement that would bring development and an increase in property tax revenue for the school district, township and county, Bowser said. “It is about growing the tax base.”

Once the TIF loan or bond is paid off, the TIF district would be dissolved and the taxing bodies would receive the full amount of the increased property tax revenue generated by the development as new buildings come online.

CCIDA officials reassured school board members the taxing bodies would have no liability should there be a default on the money borrowed to finance the infrastructure improvements.

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