What’s Gonna Work? Teamwork!
In order to make this arrangement happen, the township and the developer had to forge a partnership with the school district and the county to forego tax increases for the period required to repay the loan (10 years). Recognizing the economic development this project would bring to the area and the long-term increases in tax revenue it would create, both the school district and the county agreed to the TIF arrangement.
“Usually, the hardest part is bringing the school district on board,” said Szeles, “but this time it was much easier than normal.” The challenge, Szeles said, is that frequently school districts overlap several municipalities, but this school district had the same footprint as the municipality. Thus, the same taxpayer who would be affected by the temporary reduction in tax revenue to the school would benefit from the improved roadway.
With funding in place, the township authorized its engineer, Herbert, Rowland & Grubic, Inc. (HRG) to provide engineering services for roadway widening, realignment, and drainage improvements along the half-mile stretch of Kohn Road adjacent to the 24-acre parcel. At the same time, the developer, Szeles Capital Development Company, proceeded with a phased construction plan for the development of four office buildings, a hotel and a restaurant on the 24-acre parcel, which has come to be known as the Capital Center. The roadway improvements were completed in July 2009, and, to date far, one office building and a hotel have been constructed and opened for use.
The developer is currently seeking tenants for the other properties as they are developed. When the project is completed, it is estimated that the office buildings, hotel and restaurant will create 950 jobs.
Throughout 2009, commercial office construction experienced declines of 30-40%, and hotel construction declined more than 60 percent, according to reports from the McGraw-Hill Company. But Susquehanna Township, Susquehanna Township School District, Dauphin County and the Szeles Capital Development Company have shown one way public-private partnerships can keep economic development alive in tough economic times while increasing the tax base during the long-term.
Robert Grubic, P.E., has 36 years of experience in municipal and civil engineering and is the president of Herbert, Rowland & Grubic, Inc. (HRG), a consulting firm that provides civil engineering, financial consulting, and related services to public and private sector clients throughout the Mid-Atlantic Region. Matthew Lena is a transportation engineer at HRG and served as the project manager for the Kohn Road improvements project.
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