Parkland School District considers tax breaks for Eli Lilly’s proposed manufacturing campus | Allentown Area

S. WHITEHALL TWP., Pa. – The Parkland School District Board of Directors received a presentation Tuesday night to consider approving a state tax incentive program to benefit a major land development project.

The school district is considering implementing a Local Economic Revitalization Tax Assistance Act to benefit a proposed $3.5 billion pharmaceutical plant by Eli Lilly and Company in Upper Macungie Township. The project, touted as the largest-ever Lehigh Valley economic development proposal, is slated for the Fogelsville Corporate Center located near Adams Road and Interstate 78.

The Commonwealth of Pennsylvania, through the LERTA, allows taxing bodies to provide tax incentives for new construction or improvements in designated revitalization zones. The LERTA encourages development by gradually phasing in taxes on the property’s increased improvement value after construction is finished. The span of the tax abatement is typically 10 years, with the abatement diminishing incrementally over time. Municipalities also usually impose conditions on the developer which must be met to qualify for the LERTA.

Property owners in LERTA districts must still pay full taxes on the pre-construction assessed value of their land, as the abatement applies only to the increased property value resulting from improvements.

Once construction is complete on a LERTA property, the county reassesses it to determine the value of improvements made. The amount of additional assessment from improvements becomes the “eligible assessment” subject to the LERTA tax exemption schedule of each local taxing authority.

In the case of the Lilly property, the LERTA must be approved by each of the property’s three taxing bodies: Parkland School District, Lehigh County and Upper Macungie Township. On March 5, the township approved a 10-year LERTA that would exempt 100% of the eligible assessment in the first year, with the abatement decreasing by 10% each year.

Tuesday night’s presentation offered by KingSpry Attorneys and Counselors provided Parkland directors with examples of how other school districts have evaluated and implemented LERTAs. Those examples included Bethlehem Area, East Penn, Easton Area, and State College Area school districts. In the State College case, the district rejected the LERTA.

Superintendent Mark Madson told directors it would benefit their decision-making process “to have some type of estimate of the 10-year abatement.” He said the district should be able to provide a tax estimate, but cautioned it would be that — an estimate.

“We won’t have the exact tax estimate because there is no project like this anywhere in the Lehigh Valley,” Madson said. “It is the spirit of the state and local collaboration to try to get a company like Lilly to come into the Lehigh Valley.

One director claimed that by approving the LERTA, Parkland School District would lose out.

“It seems a bit of a raw deal to the Parkland community and our taxpayers,” Director Jon Macklin said.

However, Macklin added that he did support Lilly’s proposal.

“I think this is a great project for the area,” Macklin said.

He added that he wanted to have a conversation with Lilly directly to “find out if they’re going to leave” if the school district denies the LERTA.

Officially, negotiations between the company and the district will go through Madson’s office. As of Tuesday night, no official visit from Lilly representatives will be required by Parkland School District.

In addition to approving the 10-year LERTA or denying it, directors have also the option to adopt a LERTA for a shorter time period, such as five years. This would include larger percentages in tax exemption over the shorter period.

According to KingSpry’s presentation Tuesday night, if a LERTA were designated for the property, the tax exemption “does not terminate upon sale or exchange of the property.”

The district projected a $17.1 million 2026-27 budget deficit during a committee meeting held before the board’s regular meeting. To assist in reducing this deficit, Parkland is considering a 3.5% tax increase on property owners. The 3.5% tax increase would provide the district an additional $5.8 million, still leaving an $11.3 million deficit in the district’s $262.7 million spending plan.

Directors are expected to review the LERTA at their April committee meetings with a possible vote at their April regular meeting.

Security additions

The board OK’d the procurement of additional security cameras.

The deal includes 24 Avigilon cameras, four camera servers and electrical services to address “blind spots” at the district’s elementary schools. The contracts, with three companies, total $122,086.27.

High school prom

Directors approved a bill involving the high school prom scheduled for May 2 at SteelStacks.

The district procured emergency medical services as needed for post-prom festivities on the night of the prom and into the next morning at Parkland High School. The deal, which runs from 10:30 p.m. on May 2 through 5 a.m. on May 3, is with Cetronia Ambulance Corps.

Dual credit agreement

The board OK’d an articulation affiliation agreement to allow eligible juniors and seniors to earn concurrent credits while receiving a 50% tuition scholarship.

The five-year deal, with Muhlenberg College, will apply the 50% tuition scholarship to the college’s summer school rate. The pact runs through March 16, 2031.