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Fayette working to lure energy plant

| Friday, Feb. 23, 2001

UNIONTOWN - Two of the three required taxing jurisdictions have passed resolutions, including 60 acres in German Township, in the state's Keystone Opportunity Expansion Zone (KOEZ) in an effort to lure a North Carolina-based energy company here.

The Fayette County Board of Commissioners Thursday approved a resolution to include 60 acres of land, located in German Township along the Monongahela River, in the tax-free economic development zones. This action could result in Duke Energy North America building a $280 million power plant here.

However, the board reconvened its meeting until 3 p.m. Friday to vote on a request by Uniontown businessman Gary Gearing to include his building in the KOEZ, an expansion of the Keystone Opportunity Zone (KOZ) program initiated two years ago.

Gearing, president of Fayette Holdings Limited, is seeking to have the Fayette Building, located on Main Street, Uniontown, and a parking lot on Arch Street included in the Fayette County application, coordinated through Fay-Penn Economic Development Council. Fay-Penn then forwards information on the sites to the Southwestern Pennsylvania Commission.

The application for the southwestern Pennsylvania zone must be sent to the state Department of Community and Economic Development by Wednesday.

While a motion to include Gearing's property in the KOEZ was listed on Thursday's agenda, the board recessed until this afternoon to await the decision of Uniontown City council on Gearing's request. City council is slated to meet at noon today.

The three local taxing jurisdictions - the county, municipality and school district- each have to agree on the property that will be designated a KOZ or KOEZ. These zones have greatly reduced or no tax burden for property owners, residents and businesses.

Commissioner Vincent Vicites said he was not prepared to vote on the motion, needing additional time to research the KOZ legislation which indicates that any individual residing in a commercial/residential property in the zone does not have to pay the local wage tax, which Vicites said, could have an impact on revenue. Vicites, chairman of the board, said he was not going to take that possibility lightly and needed additional time to contact the state DCED. While he was criticized for wavering and waiting until the 11th hour, Vicites said, 'I have made the hard decisions' and he needed to explore the impact of tax abatements on a residential/commercial property.

Vicites noted that Gearing's property would be the first residential/commercial property to be included in the economic development zones.

When the original KOZ sites were selected by Fay-Penn Economic Development Council before the December, 1998 deadline, all of the county's 2,600 acres in Fayette County were parcels zoned industrial.

Vicites expressed concern that Gearing's property could be included in the initiatives but the same opportunity was not conveyed to others with commercial properties.

Vicites also voiced concern about the board casting a vote before the municipality had made its decision. Vicites did want to usurp the council's authority and had suggested the commissioners could meet next week.

Commissioner Ronald Nehls said he was prepared to make his decision Thursday but would concede to protocol.

Lori Omatick, economic development manager of Fay-Penn and subzone coordinator of the KOZ, urged the commissioners to hold their meeting shortly after city council meets because of the urgent deadline. The application for the southwestern zone was do to the Southwestern Pennsylvania Commission late last month and the subzone's complete application must be received by the state by Feb. 28. Omatick said it would be 'almost logistically impossible' for the coordinators at the SPC to complete the application and have it sent to Harrisburg by the 'drop dead deadline' on Wednesday.

The Uniontown City School District gave Gearing conditional approval Tuesday night and put it on their agenda for Thursday night. However, Uniontown City council is on the fence. If city council were to deny Gearing's petition, then the commissioner's decision is moot; all three taxing bodies need to be in agreement.

Gearing, who attended Thursday's meeting, said the commissioners would not be usurping the city's rights and privileges. 'What you have here is three taxing bodies that make decisions independent of each other. I'm prepared to live with the decision...not complicate or jeopardize Southwestern Pennsylvania Commission's package and the economy of Fayette County due to a potential timeline that is out of our control.'

Gearing on Tuesday told the commissioners that he is willing to continue paying existing real estate taxes on the building and parking lot, taxes averaging $9,000 per year.

He estimated taxes paid to the city are about $2,700 and county, $1,200. Gearing estimated that the Fayette Building has a 14.56 percent occupancy rate and he, by seeking the KOEZ designation, is using the state's 'number one program to draw in new business and compete at a state and national level for the purpose of economic development.'

Nehls said that city council's decision would not affect his vote today. 'We've seen the decay of Uniontown, the county seat, and this is an opportunity to provide for potential improvements.'

The board did tout the benefits of including acreage in German Township in the KOEZ application. In addition to the German Township property, Fay-Penn has designated three sites: 17.91 acres in Georges Township; 40.65 acres in North Union Township; and almost five acres in Uniontown.

Commissioner Sean Cavanagh noted that the potential investment by Duke Energy North America, a subsidiary of Duke Energy Company of North Carolina, could result in an influx to the economy of Fayette County.

Robert Trotta, project engineer for Duke Energy North America, estimated that the payroll during the 18-month construction period will reach $40 million and create 350 to 400 union jobs. The residual income in the five years following could top $82 million. The plant would employ 20 to 25 persons, each earning $90,000 per year in salaries and benefits.

Fayette County is one of 12 sites that Duke Energy is considering and Trotta hopes to have ground broken in October.

The plant would be a 620-megawatt combined electric generation facility that would operate 7,000 a year on natural gas and about 1,000 hours on fuel oil backup; it could light up 600,000 homes. Cavanagh said Fayette County would benefit from the 'trickle down' economics including concrete and steel components manufactured here that would be required in the plant's construction.

He also noted that the construction of a power plant compliments other economic projects touted for Fayette County including real estate development in South Union Township and expansion of the county's airport.

Vicites noted that the three taxing bodies would be forgiving about $200 a year in real estate taxes on the property.

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