Blue Mtn. requests tax deferral to help secure hotel loan

Blue Mountain Resort hopes to use a projected tax increase to fund a portion of its proposed 130-room hotel in Lower Towamensing Township.

Barbara Green, Blue Mountain president, and Kathy Henderson, Carbon County director of economic development, joined two attorneys at Tuesday night’s Palmerton Area School District workshop to pitch the “tax increment financing” idea to the school board.

Under tax increment financing, full taxes assessed on the property are still collected. The Tuthill Corporation, which does business as Blue Mountain Ski Resort, will pay approximately $137,000 in taxes to the district in 2018, Palmerton Business Manager Ryan Kish said.

As development of the hotel would occur, however, property values, and the tax level will increase. Any tax revenue generated above the current level would then be used to pay down the debt service of a loan Blue Mountain would take out to fund the hotel project.

The project, Green said, is estimated to cost $25 million.

“In order to get it financed, I would have to put up stacks of debt,” Green said. “I can’t go to the local bank and get $25 million. It won’t happen. So we have to come up with some creative financing to get this done. The TIF would support a portion of that $25 million.”

The school district isn’t the only taxing body that would need to sign off on the TIF plan. Lower Towamensing Township and Carbon County would also need to agree to defer the incremental tax revenue for up to 20 years.

The concept is not a new one around the state.

Pocono Mountain School District, Tobyhanna Township and Monroe County officials approved a TIF plan for the $350 million Kalahari Resorts project several years ago.

While those entities approved 100 percent of the incremental tax revenue to be used for the project, that is not always the case.

“The amount of anticipated tax revenues committed depends on what the taxing bodies decide,” Pete Carlucci, attorney with Eckert Seamans, said. “It could be 80 percent, it could be 90 percent. With a project of this size, however, I would think the time period for the TIF would be the full 20 years.”

Henderson said she learned about the TIF process after it was used for Kalahari.

“This is a new program for Carbon County,” she said. “If successful for the Blue Mountain project, it can be a poster child for ways we can jump-start economic development here.”

The former New Jersey Zinc west plant in Palmerton was mentioned as another possible TIF site if things go well.

Green said the idea has not formally been presented in front of the county or Lower Towamensing yet, but that would be happening in the near future.

The district said it would entertain further education on the process before committing to move forward with any future steps.

Director Earl Paules said Tuesday he is completely in favor of the TIF for Blue Mountain.

“The district isn’t going to get any bigger because she puts up a hotel,” he said. “It isn’t going to put any more kids in our schools. It’s a good thing. There are no negatives in someone wanting to do this. Her family has been here long enough to give her credibility.”

Green said her father originally got financing for the ski resort through the county Industrial Development Authority.

“That is how this got built in the first place,” she said.

School board President Barry Scherer asked what guarantee the district had that the hotel would be built if a TIF was approved.

“That is one of the conditions we can give the contractor, is to finish it no matter what might happen,” she said.

If built, the hotel would generate around 100 new jobs, with 30 of them being full-time positions, Green added.

“I need the community’s support to get this off the ground,” she said.

If the idea moves forward, a TIF committee would be formed including members from each of the three impacted taxing bodies.