May 22, 2011
Our School Taxes for Hockey Arena
Guest Post by David Fehr Zimmerman
Sports Arena Financing through the NIZ (Neighborhood Improvement Zone)
An article on the WFMZ web site, perhaps, provides some insight into this issue(March 3, 2011 - Jocelyn Moes).
It refers to the establishment of a Neighborhood Improvement Zone empowered inHB 1614 THE FISCAL CODE - OMNIBUS AMENDMENTS Act of Oct. 9, 2009, P.L.537, No. 50 Cl. 72 Session of 2009 No. 2009-50 ARTICLE XVI-B as a financing mechanism for this project.The articles states:"A majority of the project will be paid for by the creation of a 130-acre Neighborhood Improvement Zone, or NIZ.""It essentially is a self-financing part of the project because what you will use are future tax receipts that the project generates to pay for the debt service for the project's existence," said Mann, who added that sales and use taxes, state income taxes, and property taxes could all be used as long as they're generated within the130 acres."That could include not only the arena, but surrounding homes and businesses."Mann said people in the NIZ zone wouldn't be paying any more taxes than they normally pay. The money would just be going directly to pay off the project." Instead of being collected and going to their normal coffers, those taxes generated from the facility will be redirected towards debt service on the facility," said Mann.From my review of the legislation it is unclear as to exactly what tax revenues will be included relative to real estate. I am waiting to hear from Pat Browne's legal staff on this issue. It is critical to consider Mann indicating the list of taxes that "could be used as long as they are generated within the 130 acres".Within a 409 meter radius of the center of the block proposed for development,approximately the same area as 130 acres, there are approximately 708 structureand/or land parcels with an assessed value of approximately $88,823,000.If property taxes are included the property tax liability to the school district could beapproximately $4,049,618. The city is $1,533,874 and the county is $1,056,994 A sizable sum given the current financial condition of the state, county, city and school district of Allentown. If the property taxes are ear marked for diversion the school district may need tocome up with another $4,000,000 to balance the budget as declared by the new authority? This year or next? I question if we could end up trading education for economic development? I hope the reference by Ms Mann to property taxes in the WFMZ article is a misstatement. It seems to me the enactment of this bill and the development of this project could result in the diversion of tax dollars to pay the debt services on the financing of a development for entertainment based services without any real regard for the state of the other entities and the economy. Could this really happen?
Channel 69 Article
Google Map-130 Acre Area
List of NIZ properties and tax liability calculations
title and photograph added by molovinsky