School Board Passes Tax Diversions
Jul. 20–Marc Hargraves, jolted into action by a surprise move of the Coatesville Area school board, was scrambling yesterday.
The director of marketing for Chetty Builders, of Kennett Square, worked his phone to line up a mobile sales office and a billboard. Both will be parked in downtown Coatesville in the coming weeks to promote Chetty’s proposed 270-unit condominium project at Third Avenue and East Lincoln Highway.
The school board on Monday abruptly agreed to steer a portion of future tax revenue, over a 20-year period, toward repayment of $11 million in loans to support the Chetty project and two others in Coatesville’s unprecedented revitalization plan.
“I must admit I didn’t anticipate this happening,” Hargraves said. “I hoped it would, but I thought it might be a month or so away.”
In a series of votes amid a mixture of audience applause and catcalls, school directors approved the tax diversions that supporters say will break a logjam in Coatesville’s six-year-old redevelopment hopes.
The plan for Tax Increment Financing, or TIF, still faces reviews by the Chester County Commissioners and the Coatesville City Council, but city officials considered the school board approval most critical, as school real estate tax revenue will make up the bulk of the funds.
Developers have proposed $700 million in new private construction over the next 10 to 15 years for Coatesville, a steel town that has seen declines in business and employment for decades. The possibility of major development already has sparked a wave of smaller-scale construction and rising property values.
In recent days, however, officials began to wonder whether their hopes were evaporating, as school directors seemed hesitant to ratify the tax diversion.
“This is as important a thing as there ever was for the city of Coatesville,” City Manager and Coatesville Redevelopment Authority Director E. Jean Krack said last week. But, without the financing, “the projects are not likely to occur,” he said.
Hargraves had been similarly gloomy. “It’s just too costly to build down in the city without the TIF,” he had said.
Going into Monday’s meeting, the school board had not even been set to discuss the Chetty plan, which called for $5.9 million to construct a downtown parking garage. The board had scheduled only one vote — on $3.8 million in funding connected to a $31 million proposal by developer Donald Pulver for an office and hotel complex.
A third proposal, by Iacobucci Homes, for a 506-unit townhouse development, was on the school board agenda only as a discussion item. The city requested $1.5 million in redirected tax funds to build an access road for the Iacobucci development.
But Krack and other city officials addressed the board Monday with appeals that it take up all three proposals, and move quickly.
Charles Houston, executive director of the Coatesville chapter of Habitat for Humanity, asked the board to “start the seeding process” by approving the money.
School board member John Zaleski of West Brandywine Township said he favored revitalization in Coatesville, but worried that diverting revenue might leave the schools short on cash for educating the children of new residents.
He and some audience members also objected to seeing public funds benefit private developers.
In the end, the board voted, 8-0, to support the tax financing for the Chetty and Pulver projects, and voted, 7-1, with Zaleski voting no, to support the Iacobucci plan.
Chetty expects to begin construction later this year. Iacobucci and Pulver hope to break ground in 2006.
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