Saturday, May 21, 2016

Lehigh-Northampton Airport Authority closes FedEx land deal

The Lehigh-Northampton Airport Authority's nearly five-year effort to bring a FedEx Ground plant to Allen Township hit pay dirt Friday when the authority closed its deal to sell 260 acres of airport land for the project.

The $9.8 million deal came in for a landing two years late and required fighting through protests and legal challenges, but its closing almost single-handedly reverses the authority's long-standing financial struggles.

The property along Willowbrook Road was sold to New York developers The Rockefeller Group for a 1.1 million-square-foot FedEx Ground megahub. The land sale is actually the last of three deals that had to happen for the authority to get its money.

Before Rockefeller would close on the parcel, owners of the neighboring Willow Brook horse farm had to agree to remove a deed restriction. That agreement was finalized this month.

Rockefeller also has to widen 3 miles of road to handle the traffic into the FedEx site. And to prepare for that, the airport authority had to buy several roadside rights-of-way from private landowners. The last of the rights-of-way deals closed this week.

All three land issues had to be synchronized before Rockefeller would deliver the airport its check. That happened Friday.

"It feels like we've been inside the 10-yard line for so long it's kind of nice to finally carry this thing across the goal line," authority Chairman J. Michael Dowd said. "It's been a long five years. We had to make some tough decisions. Finally we can start looking to the future."

Because Rockefeller had to front $400,000 for environmental testing and the airport had to spend money on rights-of-way acquisition and sellers fees, the check it netted Friday was for roughly $8 million, said Charles Everett Jr., authority executive director.

Lehigh County judge ruled that it owed investors $26 million for taking 632 acres of development land in the 1990s. With just five years to pay the debt, it reduced airport services and staff. It also struck a deal to allow The Rockefeller Group to develop the land and find a user.

The FedEx Ground plant is expected to create 282 full-time jobs and 398 part-time jobs in the first three years and be able to process as many as 30,000 packages an hour. The project and land sale Friday caught the attention of Gov. Tom Wolf, whose administration is providing more than $2 million in development grants for the project.

Though FedEx officials initially set full build-out costs at $335 million, they said this week that the first phase will cost $227 million. Another $40 million is being spent on roadwork.

"Pennsylvania is steadily rebuilding its reputation as the best state to do business in, thanks in part to our unparalleled public-private partnerships," Wolf said. "The significant investment FedEx is making in Pennsylvania by establishing a new mid-Atlantic distribution facility that is expected to create 680 new jobs is just one example of the type of success that is happening all throughout the commonwealth."

Because the project will add another 14,000 vehicles a day to the road system, Rockefeller and FedEx will pay to widen the road from the site on Willowbrook Road, as well as portions of Race Street and Airport Road to Route 22.

It's a project that did not come easily. Hundreds of residents showed up at Allen Township meetings to protest the noise and traffic it will bring their neighborhood. The plant site has been farmed for corn and soybeans for decades. Ultimately, township officials said the land was rezoned for industrial use years ago because of its location near Route 22 and the airport, and that the FedEx plant met all the requirements of the new zoning.

That was no consolation to Robert and Kim Nappa, who will be able to see the plant lights from their 200-year-old farmhouse on East Bullshead Road. All that new traffic is projected to include 1,800 more trucks a day, many of them FedEx Ground tandem tractor-trailers.

"We lost and they won, but nothing's really changed about the project. Our view hasn't changed," Robert Nappa said. "We're just going to have to wait to see how bad it gets. It will be bad, I have no doubt."

The deal consummated Friday had to overcome several obstacles. As Rockefeller was wading through planning the project over the past two years, it realized that the property had a 1991 deed restriction prohibiting industrial use, which was put on the land when it was sold back then by Willow Brook Farms owners, the Fuller Family Trust.

After months of talks, Rockefeller and The Fuller Family Trust struck a deal this month that pays the trust an undisclosed amount of money and helps build a roadside berm that will insulate the horse farm from the plant site. In return, the trust removed the deed restriction.

But even as that was going on, airport officials were in court with a landowner along the road widening route. The airport authority had to acquire 26 rights-of-way for roadwork. One of the land owners, Airport Ventures, would not sell and the authority filed a legal action to take the land by eminent domain. Airport Ventures contested the taking. A source told The Morning Call, the airport offered to pay Airport Ventures $750,000 for a 0.6-acre piece of its 6-acre lot at 1650 E. Race St. According to the source, Airport Ventures asked for $4.8 million.

Instead, while the two sides prepared to meet in court, airport officials quietly acquired a half-dozen properties across the road. The last of those deals closed this week and Everett said the eminent domain claim will be dropped. As a result, the road widening will have to shift slightly south. That means that Airport Venture will not have to give up a piece of its lot.

Airport Ventures attorney Joel Wiener would not confirm that his clients were seeking a multimillion-dollar settlement. However, he noted that the matter was more about the negative impact the taking would have on the remaining Airport Venture lot.

"Those were confidential settlement discussions and no one has told us that the condemnation has been terminated," Wiener said. "If that's true, the good news is my clients get to keep their land."

The road widening is expected to begin this summer and Rockefeller is expected to break ground on the FedEx Ground plant in June.

The plant is scheduled to be open in early 2018.

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