Montgomery County approves tax abatement for Norristown’s 900 Sandy Street apartment project

NORRISTOWN >> The Montgomery County Commissioners unanimously approved a tax abatement on Thursday for Westrum Development Company which will allow them to not pay real estate taxes for a 10 year period on an apartment building project on 900 Sandy Street in Norristown.

The abatement will make the project economically viable, according to a previous report, and will diminish over a 10 year period starting with 100 percent abatement during year one and diminish to 10 percent abatement by year 10.

For abatement under the LERTA Act to be approved, all three of the local taxing authorities (the local government, the school district and the county) had to declare 900 Sandy Street as a “deteriorated area.”

Norristown council approved the abatement on Oct. 7 and the Board of Directors of the Norristown Area School District approved it on Oct. 27.

During year one of the occupancy of the project the county will receive an additional $1,134 in real estate taxes. By year 10 of the LERTA that figure will increase to the county benefit to approximately $25,000, according to Uri Monson, the county’s Chief Financial Officer.

A previous report in The Times Herald states that in the first year of the abatement, which would not be until the project is completed, Westrum Development Co. would be exempt from paying $418,000 in taxes; $280,000 for the school district, $110,000 to the municipality and $28,000 to the county.

Commissioners’ Vice-Chairwoman Leslie Richards said she recognized this was an important project for Norristown.

“We want to help in any way we can,” Richards said. “This type of development is exactly the type of development that we’ve been hoping would come to Norristown and that we would like to support.”

Commissioner Bruce L. Castor said he would be supporting the motion to approve the abatement for the $25 million construction project because as a county official, it is important to support the locally elected officials.

“The greatest consideration for me, and what persuaded me, is that the elected leaders of this town have decided that this is how they would like to go,” Castor said.

Norristown Council President William Caldwell thanked the commissioners for their support.

“This is one of the first times that we brought a LERTA out and I think it’s a tool that we will be using in the future certainly to help stimulate development in the town,” Caldwell said. “This is one of the tools that are left to local governments to be able to bring some actual dollars to incentivize development in areas where it’s difficult to get development,” he said. “We do not have a ton of developers that come in and ask us what they can do to help develop the town.”

Getting approval for the tax abatement under the LERTA Act has not come without some controversy. At a Nov. 7 Norristown Council meeting local labor leaders asked council not to vote for the abatement under the LERTA Act because the developer, John Westrum, was said to not work well with the local labor union, according to a previous report in The Times Herald.

“The developer has pledged to instruct the project builder to have local Norristown residents work on aspects of the project,” First Deputy Solicitor Josh Stein said.

“We want to make sure the work is high quality, that it has the local flavor and local quality that only local workers can bring to it,” Richards said.

After the meeting, Shapiro, Castor and Richards said they had conversations with labor unions.

“That’s between the developer and his contractors,” Shapiro said.

“I voted in favor of the LERTA. The developer understands that what I put out there in terms of being critically important is that it be, to the greatest extent possible, local, legal labor,” Shapiro said.

He further stated since this is not a public project, the county does not have a say over who does the work.

“This is a private developer coming in to do a private deal. He did seek some public assistance through this LERTA. When they come before us as a governing body I want to make sure to state for the record the things that are important to me,” Shapiro said, citing that Norristown residents be involved in some of the work on the project. “Union labor asked to be able to do that work. That is between the developer and the unions. That is not my job to insist upon that.”

Source: Times Herald