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Taxpayers Subsidize Tamaqua Property Purchase

By   /   January 25, 2010  /   No Comments

Sen. Argall tied to non-profit group property “flip”

TAMAQUA- A nonprofit, economic development group founded by state Sen. David Argall (R-Schuylkill) and funded primarily with tax dollars, purchased a downtown property for $196,000 last year and sold it to a recent board member of the organization eleven weeks later for $110,000.

123-127 E. Broad Street, Tamaqua, was purchased for $196,000 and sold weeks later for $110,000.

The building and a vacant lot at 123-127 E. Broad Street was purchased by the Tamaqua Area Community Partners (TACP) from George Wenzel and Suzanne Krell for $196,000 on July 1 of last year and sold for $110,000 to TKT Miller Partners on Sept. 17.

Micah Gursky, once a senior member of Mr. Argall’s Harrisburg staff and now Treasurer and senior principal of Tamaqua Area Community Partners (TACP), said that Todd Miller, a member of TKT Miller Partners, was not a board member of TACP. Mr. Miller was listed as a board member on TACP’s federal income tax return for 2008, for the 2008-09 terms of office.

Mr. Gursky said Mr. Miller, a well known area businessman and real estate investor, left the board after his 2008 term.

Mr. Miller, along with his brother and father, is an owner of TKT Miller that owns seven of the nine property parcels in the 100 block of E. Broad St.

Shortly after the TACP purchase of the former bakery and lot, Mr. Gursky told the Tamaqua Times News the transaction was made possible by a $120,000 grant to TACP by the state Department of Community and Economic Development (DCED). The Times News reporter for that story was Joseph Plasko, who is also a member of the TACP board.

Mr. Gursky emphasized all state rules and regulations were followed in the transactions and that the property was duly appraised and its resale to TKT Miller was competitively bid. One other bidder was involved and offered $100,000.

Mr. Gursky said the appraisal of the property occurred long before the sale and Mr. Wenzel was allowed to continue to live at the property. The national downswing in the economy drove down the value of the property, which had already been committed to, he said.

Mr. Wenzel recalled the situation differently, saying the price was agreed to in the spring of last year after he originally asked $225,000 for the property, jointly owned by him and his niece, Ms. Krell.

The later purchase by TKT did not surprise Mr. Wenzel. “They own most of the block anyways. I think they want it for parking for the Moose Building (a vacant property at 133 E. Broad St. owned by TKT Miller and purchased for $150,000 in 2006),” he said. The Moose Building is currently for sale by TKT Miller for $219,000.

TACP’s funding consists mainly of taxpayer-funded grants and support for various economic development efforts. Some of the money comes from DCED in the form of WAMS or “Walking Around Money” grants set aside by the General Assembly for personal discretional use by lawmakers.

The organization is one of many nonprofits founded by General Assembly members, ostensibly to help economic development in their regions. Two notable nonprofits of this type recently in the news are the Beaver County Initiative for Growth (BIG), founded by currently indicted former House Majority Leader Michael Veon and the Citizens Alliance for Better Neighborhoods founded by former state Sen. Vincent J. Fumo of Philadelphia. Fumo is now in federal prison after being convicted on 139 various counts, including using the nonprofit to benefit him and his allies. Veon’s state trial for misuse of taxpayer funds via BIG begins Feb. 1.

Mr. Argall, who was elected to the Senate in a special election in March of last year, had previously been a member of the state House since 1985. He and his late senate predecessor, James Rhoades, were responsible for most of the state taxpayer funding targeted to Tamaqua and Schuylkill County over the past two decades. Mr. Argall announced earlier this month that he will be challenging incumbent Democrat Tim Holden for a seat in the U.S. House of Representatives this year.

Mr. Argall said he is pleased with the efforts of TACP, which he helped found in 1994. “They have come to me for help, as I am sure they did with Senator Rhoades and, I suppose, are probably doing with (State Rep.) Jerry Knowles, who succeeded me in the House. (Mr. Knowles was also an Argall staff member before succeeding his boss.)

“The town looks a lot better than it used to look,” Mr. Argall said.

The parking problems in downtown Tamaqua are severe, Mr. Argall said, and he believes the purchase of the Wenzel property was a step toward alleviating them.

Mr. Argall said the disparity in purchase and sale price by TACP looks odd, but added the economy has property values plummeting.

Mr. Gursky said he realizes the purchase of the property with tax dollars, and its sale less than three months later to a former TACP board member who owns most of the block, at a more than 40 percent reduction in price, may look strange to taxpayers.

“We’ve done a lot of things that would not look good to taxpayers,” Mr. Gursky said of the TACP efforts to revitalize Tamaqua, which is well past its glory days when coal was King in the commonwealth.

Mr. Gursky said some economic development and tax forgiveness efforts have been successful, while others simply do not pay off with jobs and tax revenues. Like many similar boroughs and cities across Pennsylvania, Tamaqua is faced with an aging and declining population. Family sustaining jobs were not being created even before the current economic recession. Thus, an exodus of young, talented people for greener pastures.

Before condemning the TACP, Mr. Gursky said, the use of taxpayer dollars should also be looked at in terms of accomplishments such as the renovation of the city’s historic railroad station and other community efforts. He recommended Tamaqua – Looking Up, a five minute video on You Tube, produced by TACP in conjunction with the borough Chamber of Commerce.

The video lays out the need for access to the second and third floors of downtown business properties in order to enhance their value. It tells of a significant need for elevators in the properties and attaches a cost estimate.

The estimated costs would run more than $100,000 per elevator installation. Multiplied by dozens of three story office buildings in Tamaqua, that is a significant number.