Norristown and NASD disagree on LERTA application for affordable senior housing

A view of Montgomery Park, senior housing on Powell Street.

NORRISTOWN – Questions have been raised about an affordable senior housing project in Norristown after the Norristown Area School Board voted against a tax abatement.

The Norristown Area School Board called a special meeting on July 15. The only issue was whether or not to approve a LERTA (Local Tax Assistance for Economic Revitalization) for the development at 1301 Powell St. School Board members rejected the policy by an 8-0 vote, without presenting their arguments.

School officials did not respond to The Times Herald’s request for comment.

The issue was also on the agenda of the Norristown City Council, which voted 5-2 in favor of approving LERTA. Vice Chairman Dustin Queenan and Councilwoman Tiffani Hendley voted against it.

“Last night the school board voted not to approve the LERTA application for this project,” said Thomas Lepera, president of the Norristown City Council. “A little disappointing to me, since there is such a need for senior housing, affordable senior housing in our community, and there is a waiting list at the two facilities that are currently operating.

“It would have been easy to take this resolution off the agenda tonight, or put it on the back burner or not, but I think as a council we need to reaffirm our position on affordable housing and affordable housing for seniors in this particular project,” he continued during the July 16 work session.

Elon van Montgomery Park LP, in Fort Washington, filed the LERTA application for a proposed 38,175 square foot residential facility on lot three of the Powell Street parcel, formerly known as Montgomery Hospital.

The development cost for the four-story building was estimated at $15.5 million. According to the LERTA application, there are currently 200 people on the waiting list for housing.

The development’s third phase will consist of 40 one-bedroom apartments for people 62 and older. Each unit will be about 6,000 square feet with central air conditioning, storage, a kitchen and handicap accessibility options, according to the LERTA application. Eligible residents are seniors earning 20 percent, 50 percent and 60 percent of the area median income, which is about $106,811, according to U.S. Census Bureau figures.

Additional plans for the site include improvements around parking, stormwater, landscaping, lighting, driveways and utilities, according to the LERTA tax abatement application, according to the LERTA application. The facility will also be equipped with an on-site laundry facility, outdoor space, a management office, community rooms and spaces dedicated to resident support services.

If approved, LERTA would establish a “gradual increase in tax payments” at a rate of 10 percent, to be phased in over a 10-year period. LERTA would include three taxing authorities: Montgomery County, the Town of Norristown, and the Norristown Area School District.

In calculating LERTA, the above proposal recommends the following “taxes (be) paid during (the) abatement period.” Thus, $4,487.66 was set for year one, $10,529.74 for year two, and $16,930.30 for year three. The increase continues over the next seven years, with $73,205.81 scheduled for year 10.

Montgomery Park’s first phase was a $14.7 million project completed in May 2018, according to the developer’s website. The four-story building had 50 units. Phase II included a four-story, 42-unit building completed in 2021 at a cost of $13 million.

Regarding the third phase of the development, Norristown City Council members previously accepted the LERTA application during a work session in May and granted preliminary/final approval for the land development for the third phase on June 18.

Montgomery County Commissioners could vote on the Montgomery Park LERTA at their August meeting, a county official said. With the divisions seen among elected officials regarding the LERTA application, the question arises as to how this could affect Montgomery Park’s future development.

“Technically, each taxing authority has the authority to approve or deny a LERTA application. If one taxing authority denies a LERTA application, that denial does not prevent another taxing authority from approving it. However, approval by one authority does not require/force the other taxing authorities to grant approval,” said a spokesperson for Kilkenny Law, attorney for the City of Norristown.