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Fayette County: Legislator moves to close tax-break loophole

UNIONTOWN — State Rep. Larry Roberts introduced legislation this week designed to close what he said is a loophole in a state program that provides tax breaks aimed at spurring development in blighted and poor communities.

The South Union Township Democrat said he offered both an amendment and stand-alone legislation to address a proposed 853-acre executive home and golf course complex in Springhill Township.

“We never intended for the (tax-break law) to be used for million-dollar homes,” Roberts said.

The complex, Crystal Springs Estate and Golf Resort, obtained a crucial rezoning in July via a split vote of the Fayette County commissioners.

But Roberts said the price of the homes and their exemption from taxes until 2014 has upset a number of his constituents. Known as a Keystone Opportunity Zone, the state-sponsored program enables municipalities to designate a parcel as tax-free for as many as 10 years to spur economic development.

“If you can afford a $300,000, $400,000 or $500,000 house, you don’t really need a tax break. And it’s unfair to get that break on the back of the people who can’t afford to pay (as much),” he said.

Fayette County Commissioner Ronald Nehls said he was “disappointed” with Roberts’ efforts.

“Nobody has been knocking at our doors for years and years. To interfere with (development) now — frankly, I can’t imagine a more inappropriate thing for an elected official to do,” he said.

According to Roberts, the amendment would accomplish the same ends as the stand-alone bill, and likely has a better chance by being attached to a larger bill.

Either way, he said the change appears to be popular with his fellow lawmakers in the House and with state Sen. Richard Kasunic, a Dunbar Township Democrat.

Roberts said he offered two versions of the bill and the amendment. One would allow no tax breaks for any residential property, and another would allow breaks for low-income housing.

“There was a discussion to allow blighted housing areas to be replaced (tax-free for up to 10 years), and that seems like it’s more popular” than no break for residential properties, Roberts said.

He said a bill the amendment is attached to could be voted on next week. If passed, the bill would move to a conference between the House and Senate before its potential signature by Gov. Ed Rendell.

Crystal Springs President George Turner said he was unaware of the legislation but believes the development fits within state law.

“The KOZ was always meant, according to the state, to be not only for industrial properties, but (for) commercial and residential development as well,” he said.

Plans call for the eventual construction of 400 houses and 200 condominium villas with values ranging from $300,000 to $1 million, along with a golf course, business park and possibly a convention center.

Commissioner Vincent Vicites, who voted against the rezoning, congratulated Roberts for introducing the legislation.

“I was for the development, but I’ve been consistent against the use of KOZ status for residential development. This is not fair to other developers, other people who have golf courses, or the taxpayers who will pick up the difference,” Vicites said.

Crystal Springs has not yet obtained construction permits. Turner said the group hopes to begin construction next year, but development could take up to 15 years to complete.

Nehls said any effort to sidetrack either Crystal Springs or a future development is wrongheaded.

“The whole situation I’ve found with the negatives is, people are looking in the rear-view mirror and not ahead to the mountain peaks of success. They’re not paying attention,” Nehls said.


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