Recently plagued by static business growth resulting in tax increases, the news of a data center coming to Upper Burrell is welcomed by Burrell School District officials.
“The district faces increasing costs annually, so all property development and growth that results in increased tax revenue helps to offset these costs,” said Jennifer Callahan, Burrell’s business manager.
Arconic, which owns the technical center site off Route 780 that it shares with Alcoa, put some of its property up for sale in 2022. The site was once the primary research center for Alcoa; Arconic is a spin-off of Alcoa.
TECfusions, a data center owner and operator, closed on a vacant portion of the property this month and intends to use roughly 500,000 square feet of the site. A TECfusions spokeswoman declined to provide the purchase price.
While the financial impact of TECfusions is yet to be seen, school district officials are optimistic with what might come from it.
The district and Upper Burrell lost real estate tax revenue from the property during an assessment appeal settled in 2021 after Arconic appealed a $653,100 real estate tax levy for the property. The school district and Arconic settled on a $403,000 tax reduction — more than 2.5 mills of taxes for the district. Callahan said Arconic’s real estate tax on its 170-acre property to Burrell School District this year is $307,850.
An Arconic spokeswoman said at the time that the company worked collaboratively with the township and school district “for a fair and equitable valuation of our property.”
Since the settlement in 2021, the total assessed value on the large Arconic property was reduced by nearly $3.9 million, Callahan said. That results in about $403,000 in lost real estate tax revenue for 2021-22, about $415,000 for 2022-23, about $431,000 for last school year and nearly $456,000 for this school year.
Burrell has the highest millage rate — 117.5 — in Westmoreland County. Each mill is worth $151,531 to the district. The school board approved a 5.8% tax increase this year, citing stagnant property value growth.
Callahan said at the time that the assessed value of the district this year was “essentially the same” as last year. If Burrell didn’t raise taxes, it would have only seen a $662 increase in revenues from natural growth. The overall assessed value of the taxable properties in Burrell is about the same level as they were in 2015-16.
Burrell is not the only district or municipality that has been hit by business loss and reassessment.
This year, Deer Lakes School District refunded more than $700,000 to the owners of Walmart, Sam’s Club and the SpringHill Suites hotel in Frazer. Frazer refunded just more than $80,000 to those businesses.
Springdale Council will consider a 19% tax increase Tuesday to help make up for what officials say is lost revenue from reassessments on industrial properties.
On the other hand, New Kensington-Arnold’s budget for this year expected its property tax revenue to increase about $306,000 because of a $3.5 million increase in the district’s assessed property value.
Ross G. Walker III, chairman of the Upper Burrell supervisors, said that while it’s hard to say what financial benefits the township could reap from TECfusions, the property could be reassessed and the township could gain back what it lost. In the 2021 settlement, Upper Burrell lost close to $39,000 in tax revenue annually.
“I’m very optimistic for the future of Upper Burrell,” Walker said. “It could add quite a few employees, which would benefit our local service tax and the fire company, which they get 35% of what we collect.”