Tax Breaks Could Help Development At Proposed Keystone Trade Center

The proposed Keystone Trade Center at the U.S. Steel site in Falls Township could receive a large tax exemption.

The planned Keystone Trade Center project could bring as many as 5,000 to 10,000 new jobs and as much as $1.5 billion in investment over the next decade. NorthPoint Development, of Kansas City, aims to turn the site into the “largest e-commerce, logistics, and multi-model industrial project on the East Coast” with room for as many as 20 new buildings constructed on a speculative basis.

On Monday evening, the Falls Township Board of Supervisors adopted an ordinance designating the site as a Keystone Opportunity Investment Zone. It would offer tax exemptions, deductions, abatements, and credits for real property, earned income, net profits, sales and use, business occupancy, and mercantile and business privilege taxes within the zone.

The designation would exempt NorthPoint Development from many taxes for a 15-year period beginning January 1 and ending on December 31, 2035. 

“The Keystone Opportunity Zone (KOZ) Program is an economic development program designed to stimulate investment, economic growth and employment in the commonwealth for development and revitalization. Applicants located or partially located in specially designated, geographically defined KOZ zones are authorized to apply for state and local tax credits, exemptions and tax abatements for a period of time based on the duration of the zone,” according to information from the Pennsylvania Department of Community and Economic Development.

To take effect starting in 2021, all three taxing authorities in the area need to agree to the zone before the end of 2020. So far, the township and Pennsbury School Board have approved the zone. On Wednesday, the Bucks County Commissioners will hold a special meeting at 10 a.m. to consider the designation.

State Sen. Steve Santarsiero, a Democrat from Lower Makefield, called on the taxing bodies to support the zone to “help move forward a redevelopment project that will bring hundreds of construction jobs and thousands of permanent jobs over the next few years.”

The U.S. Steel site has the third largest property tax assessment in the Pennsbury School District.

Township Solicitor Michael Clarke, who also represents the school district, said NorthPoint Development has agreed to pay 110 percent of real estate taxes to the municipality, school system, and county in 2021.

“The amount of real estate taxes could increase based on potential tax increases from each of the three taxing authorities, but not as a result of reassessments during the 15-year period,” Clarke said. 

Supervisors Chairman Jeff Dence said the township will receive funding from NorthPoint Development to provide police and fire services to the site. He said the township may also make some of the roads public.

NorthPoint Development is set to purchase the roughly 1,800-acre Keystone Industrial Port Complex site from U.S. Steel sometime before the end of the month. The exact sum of the sale has not been released.

In recent months, NorthPoint Development has said they plan to construct new warehouses ranging in size from 200,000 square feet to up to 2 million square feet on open space at the property. Some buildings could be as high as 100 feet if needed.

NorthPoint Development has not announced any companies that are interested in the site, but the firm has previously developed distribution centers for Home Depot, Staples, Walmart, Amazon, FedEx, XPO Logistics, Chewy.com, General Motors, and Ulta.

NorthPoint Development officials have said they want to break ground by spring on the first phases of the project.

The property began life as the U.S. Steel Fairless Works complex. It was the site of a large steel mill, a coke (fuel used in the steel making process) production plant, steel making and forging operations, a powerhouse, and chemical plant. By the 1970s, more than 5,000 people worked at the site. As the years wore on, U.S. Steel slashed thousands of positions and in 2001 closed the majority of the site. The company still finishes cold-rolled steel products made at western Pennsylvania plants for use in the automotive, home construction, appliance, and metal building industries at the facility. By 2009, about 100 U.S. Steel employees worked at the facility as the company continued demolishing buildings that were unused.

The U.S. Environmental Protection Agency placed a Resource Conservation and Recovery Act consent order on the site in 1993. U.S. Steel is required to remediate the property under the order. So far, 70 percent of the site has been cleaned up by the steel giant, and NorthPoint Development plans to invest $25 million over the next few years to complete the 30 percent of the site remaining so the consent order can be lifted, officials said.

Previously, the site was designated a Keystone Opportunity Investment Zone. The designation ran from the early 2000s until a few years ago.

Dence said the site has seen so many redevelopment proposals over the years and they all fell through. He celebrated NorthPoint Development’s plan for the site.

“That means no more Elcons. That means no more heavy industrial,” Dense said.

Supervisor John Palmer said NorthPoint Development is working to “make a brown space green again.”

State lawmakers, including all the Levittown area ones, voted on the state’s budget in November. Inside the budget legislation was a provision to offer the U.S. Steel site as a potential Keystone Opportunity Investment Zone if approved by local authorities.

Santarsiero said he worked with State Rep. John Galloway, a Democrat from Falls Township, to get the provision in the legislation.

“At a time when so many are without work, this project will breathe new life into our local economy and help thousands of residents secure gainful employment,” the state senator said.

Also at the meeting, the supervisors approved recognizing the Morrisville Municipal Authority as the provider of potable water and sanitary sewer for the U.S. Steel site. Once the sale from NorthPoint Development and U.S. Steel is approved, the steel company-operated water and sewer facilities will be taken over by the Morrisville Municipal Authority, which provides service to Morrisville Borough and parts of Falls Township and Lower Makefield Township.

Dence said the Township of Falls Authority cannot take over the U.S. Steel utility because it does not have its own water and sewer treatment plant.

Previous reporting on the project:

• Keystone Trade Center Project Moves Forward
• Ground On Billion-Dollar Keystone Trade Center Could Be Broken By Spring
• Falls Twp. Holding Special Meeting On Proposed U.S. Steel Site Redevelopment
• Plans For U.S. Steel Site Show New Billion-Dollar Development, Potential For Thousands Of Jobs
• EXCLUSIVE: Large U.S. Steel Site To Be Sold To Developer
• U.S. Steel Seeking To Sell Fairless Works Site

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