Tenants disclosed for two new Hanover Township buildings near Chewy.com

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Two buildings under construction next to online pet-supply retailer Chewy.com in Hanover Township will be occupied by athletic apparel maker Adidas and Patagonia Inc., an environmentally conscious American company that sells outdoor clothing, county records show.
 
The firms will bring with them several thousand new jobs, the developer said.
 
Missouri-based NorthPoint Development, which owns the 172-acre Hanover Industrial Estates tract housing the three buildings, identified the two new tenants in documents submitted to Luzerne County Council seeking a tax break for a different proposed project on land it plans to purchase in the township and Nanticoke.
 
Adidas has leased an 843,000-square-foot structure, and Patagonia will occupy a 360,000-square-foot building at the site, which NorthPoint calls the Hanover Ridge Trade Center, according to the documents posted on the Jan. 9 council agenda at www.luzernecounty.org.
 
Brent Miles, NorthPoint’s economic development vice president, told county council Tuesday he had anticipated it would take three to four years to attract all three tenants.
 
“I was out of product already in a year, unexpectedly fast — a good thing,” said Miles, describing what happened as catching “lightning in a bottle.”
 
He discovered his next planned project by chance when he visited the nonprofit Earth Conservancy offices in Ashley to pick up old photographs of the Hanover Ridge site, which had been mine-scarred and previously owned by the nonprofit.
 
Miles said he was intrigued by data plastered on the Earth Conservancy office walls about the new $84 million South Valley Parkway under construction.
 
The parkway will create a new beltway directly linking Interstate 81 and Route 29 to Luzerne County Community College and surrounding property, including approximately 330 acres owned by Earth Conservancy along Kosciuszko Street across from the college and near the Lexington Village residential development. The nonprofit calls this tract “Hanover 9.”
 
Miles said he made an offer to buy the partially wooded and mine-scarred 330 acres on the spot, and a closing is pending.
 
Earth Conservancy reclaimed portions of the tract, but Miles said it is in “horrible” shape, with bumpy terrain that caused the vehicle he was in to get stuck.
 
“Our engineers are going to have to move a lot of dirt to get these pads flattened out to hold these buildings. It is a lot of work,” said Miles, who already has started seeking state Department of Environmental Protection approval.
 
Up to 3,ooo jobs
 
NorthPoint plans to construct three buildings over three years with the following square footage: 1.3 million, 307,000 and 507,000. The first should be completed this year, he said.
 
He provided a low estimate of 1,300 to 1,500 new jobs at the new site but said it could be 2,000 to 3,000. Miles said he can’t speculate on the types of tenants or jobs that may be attracted because he won’t launch marketing until he knows the specifics of the tax-break package.
 
The other four school and municipal taxing bodies already approved the break, and county council plans to vote Jan. 23.
 
Council meeting documents originally said NorthPoint was seeking a decade of full exemption on new construction but not the land under a program known as the Local Economic Revitalization Tax Assessment, or LERTA.
 
However, council’s revised agenda later said council is considering only full exemption in the first seven years. The break would be scaled back to 90 percent in the eighth year, 80 percent in the ninth and 70 percent in the 1oth and final year, the revision said.
 
Miles stressed the land portion will be fully taxable when NorthPoint buys it, generating revenue taxing bodies haven’t received under the tract’s nonprofit ownership.
 
The county is projected to receive $3.7 million in tax revenue from the site over 20 years, he said.
 
NorthPoint made a $100 million private investment at the Hanover Ridge site and is poised to spend another $100 million on the new tract.
 
Miles said he has a “huge belief” in this market and workforce. The ability to attract employees is always a concern in new ventures, but approximately 4,000 applied for the initial 1,000 jobs at Chewy.com, which pay between $15 and $22 per hour, he told council.
 
County Councilman Harry Haas said he did not support a tax break for the Hanover Ridge project, citing sentiment from some property owners that such programs allow the government to pick “winners and losers.” He asked if Chewy.com will continue leasing its property after that tax break expires.
 
Miles said Chewy.com required a lease beyond 10 years because it invested $25 million outfitting its building and does not want to get “kicked out.”
 
The Chewy.com building has been assessed at $37.96 million. It has full Keystone Opportunity Zone (KOZ) tax exemption through 2024 and a real estate tax discount ranging from 80 to 100 percent, depending on the taxing body, in 2025 and 2026 for the structure under LERTA only.
 
There is no KOZ for the proposed Hanover 9 project.
 
Officials have estimated the South Valley Parkway would be completed in 2020.
 
“Let’s start economic development the minute that interchange opens, and let’s get these buildings up,” Miles urged council.

 
– Jennifer Learn-Andes
 
Times Leader
 
Date: January 11, 2018
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