Johnson Controls Inc. is moving forward with its plans to construct a new facility in Hopewell Township.
But the Milwaukee-based company’s project is hitting a few delays as its permits are reviewed by the York County Conservation District and the state Department of Environmental Protection, among others.
The project, which is using a $16 million tax increment financing district incentive plus a $5 million state grant to cover part of the estimated $150 million cost, has an expected completion date of 2017, said Kevin Keller, the company’s director of global engineering services and technology.
Johnson Controls is a major international and diversified player in the building efficiency, automotive interiors and battery sectors. It came to its York County campus through its York International acquisition in 2005.
Last year, it closed on about 57 acres at the Stonebridge Business Park in Hopewell Township. The 300,000-square-foot facility will include a heating, ventilation and air conditioning equipment testing complex as well as an engineering and business support center, Keller said in an email.
The site will employ about 450 people. Meanwhile, the firm’s Navy Systems business, Grantley manufacturing plant and about 250 workers supporting these operations will remain at the existing York-area campus off Richland Avenue.
There was fear the project would be located in Maryland, but some incentives helped persuade the company to build in Pennsylvania.
Gov. Tom Corbett announced in September a $5 million Economic Growth Initiative grant (formerly the Redevelopment Assistance Capital Program), aimed at enticing the company to give up on anything south of the Mason-Dixon Line.
Also, with help from the Redevelopment Authority of the County of York, the company secured creation of the tax increment financing district, known as the Stonebridge TIF District.
“The TIF District approval was vital to Johnson Controls’ decision to move forward with the Hopewell Township facility,” Keller said.
At the same time, the project is expected to use about 375 construction workers, and the average annual salary of those employed at the facility once it opens is expected to be about $88,000, according to the TIF plan.
The redevelopment authority issued the $16 million tax-exempt bond for the TIF around the beginning of March, said Kenetha Hansen, vice president of business development for the YCEA.
The money’s use is limited. The TIF plan indicates Johnson Controls would use the funds for infrastructure improvements, such as upgrades to the regional electric utility system.
But none of that work can start until approvals are given from several agencies, including the York County Conservation District and DEP, said DEP spokeswoman Lisa Kasianowitz.
It starts with the conservation district and developer Stewart Associates, which is working on behalf of Johnson Controls, and the National Pollution Discharge Elimination System Construction Stormwater Permit. Earth-moving at the site can’t start without the permit, which mandates certain controls to help eliminate stormwater runoff during the construction phase, Kasianowitz said.
Once those issues are ironed out, DEP will perform its technical review of the application, plus the post-construction stormwater management plan. The conservation district will also review the erosion and sediment control plan at the same time.
The plan has already been reviewed by the York County Planning Commission, said Terry Ruby, who handled the review for the commission’s municipal planning division. Once the conservation district and DEP approvals come back, the township board of supervisors has to sign off before work can begin.
A tax increment financing district, or TIF, works like this: A quasi-government entity — in the case of Johnson Controls Inc., it is the Redevelopment Authority of the County of York — issues a tax-free bond that is used to pay for certain public aspects of a project, such as infrastructure. Meanwhile, the three taxing bodies involved — Hopewell Township, South Eastern School District and York County — agree to collect taxes on the property at a level set before work begins.
After the project is built, the property is reassessed at a higher value and the company pays that higher rate. However, the difference between the higher rate and the base rate goes to pay off the bond. Usually, this takes 20 years.
The payoff is an increased tax base, increased employment and new infrastructure.
In the case of Johnson Controls, the assessed value of the property in 2013 was $703,560, according to the TIF plan prepared by the redevelopment authority and on file with the York County Economic Alliance. The estimated assessment once the project is completed would be $60.8 million.
That means the average amount collected each year to pay off the bond would be about $1.15 million, according to the plan. The project will bring an estimated $18.5 million more to township, school district and county taxes through 2037.