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Council relents in bid for ECIDA revenue from Port Terminal; Votes, 4-0, to stop disputed tax liens

The City of Lackawanna won't be receiving property taxes -- or payment in lieu of taxes -- anytime soon from a warehouse and shipping facility on the Lackawanna Canal.

The City Council voted, 4-0, Monday to cancel tax liens against the Erie County Industrial Development Agency, the nonprofit, quasi-governmental entity that owns the 40,000-square-foot Port Terminal facility.

The city has experienced huge erosion to its commercial property tax base since Bethlehem Steel closed in 1983, and city officials have tried unsuccessfully for years to get the ECIDA either to pay taxes or to negotiate a payment-in-lieu-of-taxes deal, or PILOT, on the property.

Council members gave up the fight Monday after being told the city ran out of legal rope when lawyers didn't pursue an appeal of a State Supreme Court ruling.

Justice John A. Michalek last September ruled against the city's bid to collect more than $500,000 in back taxes. The city had until late November to appeal Michalek's decision and keep the case alive, but the appeal was never pursued, so the judge's decision became final.

"We're stuck with it," said Norman A. LeBlanc Jr., the city attorney.

LeBlanc, appointed in January by the new mayor, Geoffrey M. Szymanski, was not involved in the case. He told Council members that the appeal may have had merit and that he doesn't know why it wasn't pursued under then-City Attorney Arc J. Petricca.

The city hired the law firm of Hodgson Russ in the case against the ECIDA, which argued successfully that it is tax-exempt under the law and is not required to negotiate a PILOT deal on the Port Terminal because it continues to own and develop it.

The Port Terminal sits on the former Bethlehem Steel site. The ECIDA has a long-term arrangement with a private firm, Gateway Trade Center, which operates and manages the property, currently assessed at $1.14 million.

In other business

*Council members heard from several citizens who continued to object to the use of a single polling site, located in Bethlehem Park, for the 1st Ward in the upcoming School Board election and school budget vote.

*Members of the Council said they did what they could do to try to get the School Board to have two polling sites in the 1st Ward, by tabling a board request to use the city-owned bocce court as the 1st Ward polling site.

*But State Supreme Court Justice Patrick H. NeMoyer ruled April 30 that the city was required to make the building available, under state education and election laws.

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