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West Hills Business Center Continues To Grow With Help From TIF

By Colin McEvoy on December 19, 2014

A rendering of one of the buildings at the West Hills Business Center.

A rendering of one of the buildings at the West Hills Business Center.

Last year, the West Hills Business Center in Weisenberg Township made a splash when it was announced that National Freight Industries (NFI) would be moving in, providing warehouse and distribution services for Ocean Spray Cranberries Inc.

Now, the $110 million business park is continuing to grow. Two new speculative industrial properties are currently under construction, and the developer has already fielded numerous calls from businesses outside the Lehigh Valley interested in establishing their presence there.

The new buildings are 231,700 and 435,500 square-feet in size and should be completed in March and April, respectively, according to Gary Frederick, senior vice president of development for Hillwood Investment Properties, the Dallas-based developer and contractor for the business park.

The West Hills Business Center falls within a Tax Increment Financing (TIF) district, which the Lehigh Valley Economic Development Corp. (LVEDC) helped establish and administer through the Lehigh County Industrial Development Authority (LCIDA).

“There was an obvious need for public infrastructure improvements, and the TIF provides a portion of that, with the balance of the cost coming from Hillwood,” he said. “The support of LVEDC, specifically (President and CEO) Don Cunningham, has been critical to putting all the pieces together for this project. Local support has been fantastic.”

The TIF, which lasts 20 years, diverts 50 percent of newly-generated tax revenues to pay down debt service for the development. Base taxes that were already being paid before the TIF continue to be paid throughout the life of the district.

The TIF has provided for public infrastructure improvements at the site, including rebuilding a section of Route 863 in the township and the access ramps to and from Interstate 78, repairs to a functionally obsolete bridge over I-78, and the expansion and improvement of a wastewater plant.

“This TIF has supported improvements that go above and beyond what was necessary for the project itself,” Cunningham said. “This business park has led to the creation of jobs and a broader tax base, and it wouldn’t have happened without an outstanding public-private partnership involving various community partners.”

The TIF was supported in 2011 by Lehigh County, Weisenberg Township and the Northwestern Lehigh School District.

The West Hills Business Center site plan.

The West Hills Business Center site plan.

Several companies seeking to establish a distribution center for the Northeast region have expressed interest in the new spec projects, Frederick said, which is attractive to prospective tenants due to the Lehigh Valley’s proximity to Philadelphia, New York and New Jersey, as well as the business park’s accessibility to nearby Interstate 78.

“We’ve also found that logistics companies are also very interested in the Pennsylvania labor base in terms of the availability, quality and consistency of the labor base, particularly in the Lehigh Valley,” Frederick said.

The first addition to the West Hills Business Center was the 980,000-square-foot facility occupied by NFI, which serviced the Ocean Spray facility in neighboring Upper Macungie Township. The facility brought 126 new jobs to the Lehigh Valley.

The new spec properties currently under construction will be the second and third buildings out of five planned for when the West Hills Business Center is fully built out, Frederick said. Interest in the new buildings is especially high from e-commerce companies.

“E-commerce is really the biggest driver of growth in our industry right now,” he said. “Have you bought anything online in recent days? Exactly. It had to come from somewhere, right?”

The rise of the e-commerce industry has increased demand for spec industrial space throughout the country, particularly in the Lehigh Valley. For example, Liberty Property Trust built a 1.2 million-square-foot warehouse on Bethlehem’s Lehigh Valley Industrial Park VII without a signed tenant, and went on to lease the entire facility to Walmart for its e-commerce business.

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