Developers promise to pay taxing bodies

FARRELL, Pa. -- Local taxing bodies never got any property tax revenue on the Steel City Terrace public housing complex, but now that it's being rebuilt as a HOPE VI community, developers are promising nearly $30,000 a year in lieu of taxes.
In a previous agreement, the city, Farrell Area School District and Mercer County were supposed to receive rental revenue payments from Mercer County Housing Authority instead of property taxes.
The money was never received, and now the developers say they will make up the missing money to the taxing bodies.
The housing authority is a tax-exempt government entity and isn't required by law to pay any property taxes. The authority, however, does use services provided by the city, school district and county, and wanted to make some kind of payments to the taxing bodies.
Ralph Falbo, of Falbo-Penrose in Pittsburgh, the company rebuilding the complex in partnership with the Mercer County Housing Authority, told Farrell city officials Monday that the city, school district and county will all get a share of payments "in lieu of taxes" totaling at least $28,560 a year.
That's a minimum of $240 annually for each of the 119 apartment units in the new complex, he said.
That amount could increase, he said, explaining that the payment will actually be 10 percent of actual rent collected or $240 per unit, whichever is higher.
As rents increase, the payment in lieu of taxes should increase as well, he said.
The old 100-unit, barracks-style complex has been torn down and is being replaced with a more widespread development that puts two, three or four apartments in individual buildings.
Dubbed HOPE VI after the federal program that is helping to pay for it, the $30 million project is designed to appear as part of the residential neighborhood in the Spearman Avenue area.