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Lancaster IDA considers early termination for mixed-use project after tenants appear out of compliance
Summary
IDA staff told the board that a previously approved office-and-warehouse pilot appears to host a machine shop, fitness studio and auto-detailer. Staff sent certified notices and said they will either recapture benefits (if timing allows) or issue a 30-day notice to terminate the pilot if tenants do not come into compliance.
IDA staff updated the board about a mixed-use property that the agency authorized for office and warehouse use but that now appears to house noncompliant tenants.
Jennifer, the IDA staff member who presented the case, said the company delivered a May 7 letter to the town clerk but that staff did not receive it until June 26. "Their May 7 letter says that Pantech is a machine shop, 1 on 1 Fitness is a personal training facility and Code and Chrome Detail is an automotive detail," Jennifer said, adding that staff have not seen documentation confirming those tenants' permitted uses or the dates those tenants occupied the space.
Jennifer told the board there are two enforcement paths under existing agreements: recapture of benefits (which previously applied only to the first two years of a project but was revised to potentially cover the full pilot term) or issuing a 30-day notice of default under the leaseback agreement and terminating the pilot. She said the certified-mail receipt date will determine whether recapture is feasible. "If they don't come into compliance, which it appears they have no intention of doing so, you can terminate the pilot going forward," she said.
Board members pressed staff to confirm whether the tenants have certificates of occupancy and when they moved in. One board member noted the difficulty of chasing compliance after projects close and said attorney fees add to costs the agency could otherwise spend on development.
The board voted to set the matter aside pending confirmation of certified-mail dates; staff said they will prepare a motion for possible early termination at the next meeting if the 30-day cure period expires without compliance.
The IDA will invite the property representatives to the next meeting if they choose to appear; staff will also report whether certificates of occupancy exist for the tenants in question. The board did not take further enforcement action at this meeting.
