Deal with New York development company envisions massive warehouses on 753 acres just outside Lehigh Valley International Airport's core property.
By Matt Assad, Of The Morning Call
10:16 p.m. EDT, April 23, 2013
If the Rockefeller Group of New York gets its way, in the next few years hundreds of acres of farmland around Lehigh Valley International Airport will spout industrial complexes, offices and some of the largest warehouses in the region.
And if Lehigh-Northampton Airport Authority officials get their way, the money Rockefeller pays for the 753 acres of farmland will dig the airport out from under its crushing debt.
The authority Tuesday approved a Rockefeller conceptual plan that envisions 10 huge warehouses and distribution centers — some of them larger than the massive Nestle distribution center on Interstate 78 — and more than a dozen smaller buildings.
The plan, more than a year in the making, is designed to help the airport pay off the remaining $14 million of a $26 million court judgment against it for taking a developer's land in the early 1990s. But while the deal has the potential to virtually erase the court debt, there's a chance the payoff will come too late.
Under Rockefeller's deal with the authority, it has five years to get the property developed. The authority has to have the court debt paid by the end of 2015.
Authority officials said the company has interest from a distribution company that wants to develop 200 acres of the land as soon as possible. A Rockefeller executive declined to comment Tuesday.
"Are we holding our breath and hoping they get this done ahead of schedule? Absolutely," authority Chairman Tony Iannelli said. "But we also recognize that this is our best chance to fix this problem."
Not everyone agrees. Two members of the 15-member board voted against approving the plan. William Berger and Allentown Mayor Ed Pawlowski worry that the authority is putting too many eggs in the New York City real estate developer's basket.
"I'm a little concerned about tying up 750 acres of good land for five years," Berger said.
"We've kicked this can down the road for 16 or 18 months," replied authority member Michael Dowd. "We've been down this road a couple of times."
The authority expects to have enough money to make its debt payments through 2013, but has to come up with a $5 million payment in 2014 and a $6 million payment in 2015.
Rockefeller's plan comes after months of reviewing all property airport officials have deemed nonessential. In its plan, Rockefeller offers a letter of intent to buy and develop 534 acres of farmland straddling Allen and East Allen townships just north of Race Street, and an additional 219 acres just east of Airport Road in Hanover Township, Northampton County, airport Executive Director Charles Everett Jr. said.
The company also served notice that it has no interest in several smaller properties along Airport Road, or in the 74-acre Braden Airpark in Forks Township, but Everett said the airport will try to find other buyers for those parcels.
In a draft conceptual plan they say could change depending on buyers, Rockefeller officials envision the 534-acre tract as a distribution and warehouse park similar to those along Interstate 78 in Upper Macungie Township. The park just north of LVIA's main terminal would include eight distribution or warehouse buildings, including two of 600,000 square feet, one of 780,000 square feet and another of 1 million square feet that would be larger than the Nestle warehouse along I-78 west of Route 100.
On the 219-acre tract in Hanover Township, Northampton County, Rockefeller's draft conceptual plan calls for warehouses of 415,000 square feet and 1 million square feet, and 14 other lots for office, retail and commercial buildings.
No homes are allowed to be built on any of the land because of its proximity to the airport.
Under the proposed deal, the company has 12 to 24 months to get township planning and zoning, and Federal Aviation Administration approvals. Rockefeller will foot the bill, expected to reach $750,000, for all of that.
Once the land is prepared for development, a new FAA-approved appraisal will be done to determine how much Rockefeller must pay the airport authority. Then the company will have up to three years to lease, sell or develop the land.
It won't be clear how much the property will fetch until federally approved appraisals are done, but a large portion of the same land — roughly 559 acres — was appraised at $8 million to $10 million in 2010.
Everett understands the need to get the money soon, and he's counting on Rockefeller to get some of the land developed well ahead of schedule. He also added that if all of the money doesn't come in time, the authority could borrow money against the future sale to pay the court debt on schedule.
"We are confident that Rockefeller is as motivated to get this done as we are," Everett said. "This is our best hope."
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