‘Explain where this money is going to be spent.’ Chester County leaders face key decisions.

Another company will set up business in Chester County. Another company will pay to do business there. The question for county leaders: What should happen with fees from that company, and others?

Chester County Councilman John Agee represents Richburg. He said people there want to know the financial impact big business will have when it comes. And people want details on the front end, Agee said, not just percentages or information that arrives several years after a large deal.

“The days of not explaining this stuff to the citizens has got to stop,” he said. “We’ve got to explain where this money is going to be spent.”

Deal sets fees instead of taxes

Chester County Council finalized an agreement Monday that sets fees instead of taxes for an incoming company. County bond attorney Michael Kozlarek didn’t name the company but said the project is industrial flex space beside the Giti Tire property, adjacent to I-77 behind two fast food sites in Richburg.

County documents list the company as Trimac, a Canadian bulk shipping company. The deal involves an investment of $110 million within five years. The Herald reported last year that Trimac Chester bought 109 acres off I-77, between Giti and the interstate, for $4.3 million.

An investment of $110 million in Richburg with the standard state assessment rate of 10.5% for industrial use would mean more than $5.2 million in annual taxes. However, properties that invest more than $2.5 million are eligible to pay a fee at a reduced assessment rate, rather than pay taxes. The 6% rate negotiated rate between the company and county would mean taxes of just less than $3 million.

The property also has negotiated revenue credits that discount the fee by 40% for five years, then by 20% the next five years. Given those agreements, the company pays almost $1.8 million per year for five years and almost $2.4 million each of the next five years.

After the 10 years of revenue credits, the rate would return to almost $3 million per year until the fee agreement expires after 30 years.

Councilman Corey Guy said there’s obviously a lot of money coming to the county, but Guy agrees the county needs a detailed plan for how that money will be spent. Not just for Trimac but for other projects.

“That’s what we need to talk about, because we have a lot of new industry coming in here and we’ve just got a bunch of money,” Guy said. “You’ve got this money coming in and what’s our plan?”

School, fire, development money

When a large agreement comes in from economic development, the county sends 30% of the revenue to the Chester County School District. Another 5% goes to the fire service district that serves the area where the new company locates. A 4% cut goes for future economic development. The remaining 61% of revenue goes to county operations.

Councilman Pete Wilson, one of the longer-serving members, said past councils voted to lay out how those percentages should work.

“That’s can be a fluid thing,” Wilson said. “It can be changed.”

Agee said there are other concerns, like police and EMS services that must be provided where development occurs.

“That’s what the citizens are asking,” Agee said. “If you’re going to get (millions of dollars), how is that money going to be spent back in the area where this is done?”

Agee brought up concerns not in objection to the latest deal, but as a community issue.

“I’m for this project,” Agee said. “I don’t have a problem with it. Other than we need to be straightforward and up front with the citizens about how much money’s going to come in and how that money’s going to be spent.”

Kozlarek said the spending breakdown largely doesn’t impact the incoming companies themselves. Companies want money invested into the county but don’t go line by line to see if it’s spent in their specific area.

“From the investors’ perspective — I hate to be this blunt — they don’t care,” Kozlarek said.

Kozlarek said council could outline payments specific to each deal, set or modify an overall spending breakdown like there is now or put all payments in the county budget and allocate it the way council would with other funds during annual budgeting.

Agee said he wants to see a clear breakdown moving forward, so the community knows what to expect.

“The citizens need to know how much money we’re going to get,” Agee said.

“The citizens need to know what we’re making a deal on.”

More development deals

Spending conversations have come up as several projects come across the county desk.

An area already known for large projects like Giti and E&J Gallo has a $70 million solar farm project ongoing. There’s another 700-acre manufacturing project near Richburg.

Just on Monday night, council considered several large projects.

One lays out a $150 million manufacturing facility investment and 150 new jobs in the county, but a summary of the fee agreement notes a possible $1.2 billion project with more than 300 new jobs. There’s the solar project. There’s an update to a 2017 fee agreement for TDY Industries. Council got legal advice on two economic development projects.

The TDY issue, or Allegheny Technologies, is a new investment of $3 million for a total investment of about $152 million in more than 15 years. The request there is to extend the incentive timeframe.

Kozlarek said the $3 million is almost entirely for equipment. Because equipment depreciates, the tax revenue of $46,000 the first year would drop to $5,200 in the ninth, then hold steady there.