Council OKs RDA tax-recapture MOU and amends ARPA subrecipient agreement to allow upfront property purchases

Williamsport City Council voted Jan. 8 to approve an intergovernmental cooperation agreement (MOU) between the city, the Redevelopment Authority (RDA) / land bank and the Williamsport Area School District that allows the RDA/land bank to recapture up to 50% of certain real-estate taxes from county, city and school-district shares for a period of up to five years. Mayor Slaughter and an RDA representative said the recapture mechanism is intended to help offset financial losses on rehabilitation projects that produce limited or no profit.

At the meeting the RDA representative said the authority has spent roughly half of its current allocation and described a pipeline of properties: three projects nearing completion, three properties moving through litigation and five more being evaluated. The RDA described most pipeline parcels as residential and said one commercial property is under review because of potential environmental issues.

Council also approved an amendment to the ARPA subrecipient agreement that will allow the RDA to receive funds upfront to purchase properties (previously the arrangement required reimbursement after expenses were submitted). City staff said expense items for property work would remain reimbursement-based and that they worked with financial reviewers (UHY) to ensure ARPA compliance.

RDA staff described that many redevelopment projects do not yield profit; they cited an example where an early project resulted in a loss in the mid five figures (the RDA reported a $25,000–$30,000 loss on that project). Mayor and RDA representatives said the five-year, 50% tax-recapture provision would help offset such shortfalls. The school district and county were scheduled to consider the MOU in their upcoming meetings.

Council approved both the MOU and the ARPA amendment; votes were unanimous.