After months of negotiations, a New York City-based developer, eager to buy airport-owned land, has sealed the deal with the Lehigh-Northampton Airport Authority.
At its board of governors meeting Tuesday, members overwhelmingly agreed to sell 250 acres of properties in Allen Township for $9.6 million and authorize negotiation of a purchase option for the remaining portion of the properties to the Rockefeller Group Development Corp., said Charles Everett, executive director of the airport authority.
Located in Allen Township, to the north of the airport, the properties are subject to a minimum price of $38,000 per acre and the purchase price may be increased by an appraisal, Everett said.
The Rockefeller Group would also have the option to purchase all or a portion of the remaining 534 acres of properties in East Allen Township. An appraisal would determine the minimum purchase price of these properties, according to Everett.
Furthermore, the airport authority agreed to designate all remaining flight path properties off Airport Road in Hanover Township as disposition properties to be sold for potential development, re-use or sale to other, primarily local developers, according to Everett. This would mean that Rockefeller would not develop these properties.
Developers have been eyeing land surrounding Lehigh Valley International Airport in Hanover Township, Lehigh County for potential uses and the airport authority has been looking for ways to reduce its debt from prior court judgments tied to a 1990s lawsuit. Working with The Rockefeller Group, the airport authority and its solicitor have now negotiated and finalized the terms of an agreement of sale.
The airport authority plans to execute the agreement in 30 days, perform due diligence within 120 days and offer a 24-month period for development approvals, Everett said.
For the settlement properties, the agreement calls for Rockefeller Group to acquire property that includes 150 acres by November 2015, 300 acres within 42 months, 450 acres within 60 months and 534 acres within 78 months.
"Each additional parcel sold would be required to be a minimum size of 30 acres and not leave any undevelopable remnants of land," Everett said.
Tony Iannelli, chairman of the airport authority, said the agreement would allow the authority to work simultaneously with The Rockefeller Group, the end user and local developers.
Previously, Iannelli confirmed that Federal Express Ground Services is the end user that could locate a distribution site on a parcel north of Race Street.
"The end user is for real and we are all keeping our fingers crossed," Iannelli said.
When asked if FedEx is the end user, Clark Machemer, vice president and regional director for The Rockefeller Group, said "no comment."
"We believe the agreement we reached provides a framework so we can continue to accelerate the approval process that we undertook nine months ago," Machemer said.
Machemer said he hopes to close on the first property in 2014 and start construction once the property is acquired, bringing hundreds of construction jobs and furthermore, hundreds of jobs on a regular basis.
"We look forward to being a strong partner with the authority," Machemer said.
Board member Dean Browning gave the sole 'no' vote, citing the need for the airport to pay for capital improvements in addition to the payments toward the lawsuit. The authority still needs to pay $14 million by December 2015. This agreement provides no guarantee toward meeting those obligations, according to Browning. Each year, the airport authority has to pay $4.2 million in debt service, he added.
"I'm particularly troubled by the fact that there's nothing in the agreement that requires a settlement take place within our timeframe," Browning said. "I think it's a mistake for us to go forward with a project that does not guarantee that we will get the money in the timeframe that we need."
Board member Robert Buesing said he had heard all the other proposals that came in for developing the land and no others get the authority any closer to the finish line any quicker if they take one of those. Rockefeller's end user is also well under way in the process and Rockefeller hopes to break ground on the project in 2014. If the authority stops now and moves on, they would have to start the process all over again, he added.
"Hope does not give us the money to write the checks we need to pay our bills," Browning said.
Board member Bert Daday suggested that the authority pursue Lehigh Valley Industrial Park Inc. to be a developer for the flight path properties, which are not included in the Rockefeller agreement. LVIP has the money and is "willing to go ahead," he said.