Lucerne County Council Approves Infrastructure Loan Guarantee
After lengthy discussions on Tuesday, a majority of Luzerne County Council agreed to guarantee a new infrastructure loan currently estimated at $51 million, as all proceeds will be used to address county-owned roads and bridges.
The replacement of the Nanticoke/West Nanticoke Bridge over the Susquehanna River, currently estimated at $45 million, is listed as a project for funding, although county officials have some flexibility if they deem other projects a higher priority, officials said.
In other matters, a majority of the council elected to retain real estate agent Lori Spencer and Classic Properties to market and seek buyers for a county-owned residence in West Pittston and possibly other properties the county does not have. Not needed anymore.
Councilor Kevin Lescavage, Spencer’s boyfriend, abstained from the discussion and the vote.
The loan is possible because new state legislation tailored just for the county redirects $3 million a year for 25 years from the casino’s Local Sharing Account (LSA) to create an infrastructure fund.
The way it is set up, the County Redevelopment Authority must borrow to create the fund and then pay off the debt using the annual $3 million LSA allotment.
However, the county is involved because financial institutions want assurances that the county would repay the debt if the Mohegan Sun Pocono Casino in Plains Township unexpectedly closes down the road.
The legislation leaves it to the County Redevelopment Authority to recommend which projects should be funded, with final award approval by the Commonwealth Finance Authority – a state entity that already approves other LSA awards that do not are not part of this special program.
To address the county council’s concerns over the guarantee, a memorandum of understanding between the county and the redevelopment authority approved on Tuesday allows the council to decide which projects the authority submits to the Commonwealth Finance Authority.
Seven board members approved this memorandum: Matthew Mitchell, Chris Perry, Carl Bienias III, John Lombardo, LeeAnn McDermott, Tim McGinley and Kendra Radle.
Councilman Brian Thornton abstained, saying he was barred from voting on such transactions because of his job as a financial adviser.
Three board members voted against the memorandum after expressing various concerns about the structure and progress of the agreement: Lescavage, Stephen J. Urban, and Gregory Wolovich Jr.
Urban was the only one not to vote on a second decision to formally seek LSA funding, with Thornton still abstaining and Lombardo not participating due to an outage in his remote connection.
The county’s interim operations division chief, Lawrence Plesh, told council that about 6,000 vehicles cross the Nanticoke/West Nanticoke Bridge daily.
The span was downgraded to a weight limit of 15 tonnes in 2020 due to issues discovered during an inspection. The county has no funds set aside to cover these expenses, and officials said it would take at least a decade, possibly much longer, for the bridge to receive federal and state funding allocations based on the large number of infrastructure requests. The next inspection could result in lower weight limits and/or future closure, the county administration said.
In unsuccessful attempts to file a decision on the guarantee, McGinley said the board could not continue to wait to vote on whether or not to provide a guarantee. The amount available for projects has already shrunk from about $55 million to $51 million in recent months due to rising interest rates, he noted.
State Sen. John Yudichak, I-Swoyersville, attended the meeting to ask for support, saying the program stemmed from complaints that the county government had been left out of past LSA awards.
In response to a request from Thornton, Yudichak said the Nanticoke/West Nanticoke Bridge needed to be repaired for safety reasons beyond Yudichak’s control to attract Nacero Inc., based in Houston, Texas, to build a plant $6 billion in manufacturing in this region.
“Without this bridge, lives are at risk,” Yudichak said.
Although he was unable to vote, Thornton said he believed the replacement of the Nanticoke/West Nanticoke Bridge was an “absolute necessity” and that using gambling revenue instead of cash taxpayers to pay for it was a “great idea”.
With Lombardo still unable to connect remotely and Lescavage abstaining, six board members appointed Spencer/Classic Properties as brokers, who will receive a 4% commission: Thornton, Urban, Wolovich, Bienias, McDermott and Mitchell.
Three board members argued unsuccessfully for the selection of Christine Kutz, broker and vice president of Kutz Real Estate Services, who would charge a 4% commission if a broker is involved for the buyer and 3% if not. there is no broker on behalf of the buyer. The three: Radle, Perry and McGinley.
McGinley said he thought the two agencies would work well, but feared “negative perception” due to Lescavage’s relationship with Spencer.
Thornton said he was more impressed with the Spencer/Classic Properties bid and doesn’t think it’s in the county’s interest to reject viable proposals from businesses with employees related to council members.
Council has selected a broker to sell residential property it owns at 1200 Susquehanna Ave. in West Pittston to ensure that it is widely marketed and advertised for the highest price.
The county acquired the home earlier this year as part of its 2018 settlement of the lawsuit filed by Richard and Kimberly Hazzouri, arguing they were wrongfully barred from participating in a flood buyout program.