SOUTH HEIDELBERG — An increasing number of Berks County municipalities are granting special tax breaks to developers, foregoing revenue in the short term with the long-term goal of stimulating economic growth.
The number of Local Economic Revitalization Tax Assistance (LERTA) districts jumped from 10 in 2015 to roughly 30 in 2025, a Spotlight PA review of county data shows. Nearly half are for warehouse projects, and most of them are in Bethel Township.
The 2025 figure doesn’t include two tax breaks established in South Heidelberg Township in June and July, nor does it include communities currently pursuing the incentive. Berks officials said the county doesn’t “possess, maintain or control ‘any and all’ records of current LERTA districts,” despite proposals often going before the commissioners for consideration.
The LERTA program was created by the commonwealth in 1977 to incentivize redevelopment “in deteriorated areas of economically depressed communities,” according to the legislation enacting the program.
A municipality must first create an ordinance establishing the LERTA district, said Ed Stock, solicitor for the county assessment office. A school district and the county can offer a tax abatement for the same project, but must separately grant approval. The program is then administered through the assessment office.
When a municipality approves the designation in its community, it allows developers to apply for a 10-year tax break on improvements to the property.
Proponents claim it encourages new development on vacant land and stress the belief that a developed parcel brings in more property tax than an undeveloped one, even after the incentive.
South Heidelberg approved two LERTA districts this year to encourage development of land that was identified as a “growth opportunity zone,” Township Manager Sean McKee said.
“These properties have remained vacant and undeveloped for 50+ years despite the industrial zoning designation,” he told Spotlight PA. “The LERTA will not reduce tax revenue but in fact increase tax revenue in year 1 and bring jobs and economic growth to not only South Heidelberg Township,” but the county and region, too.
Property owners pay a percentage of the taxes on improvements, leading to increased revenue for localities and an active use of the site. Taxes increase 10% each year. At the end of the 10-year program, owners pay the full amount on the improved property. There are no job creation or other economic factors that must be met to receive the tax breaks.
Opponents of the tax breaks say granting them to large corporations, but not small businesses, is unfair, and claim that corporations have abandoned developments after the incentive ends.
Why municipalities pursue LERTA districts for their communities varies depending on the need and what development already exists.
In South Heidelberg, township supervisors established LERTA districts this year for two parcels on Krick Lane so that a developer can build over 1 million square feet of warehouse space.
The tax breaks on the warehouse project were requested by developers, McKee said. Township officials hadn’t heard of the LERTA program before being approached, but the farmland at the center of the project had been undeveloped for years, and residents rejected previous proposals. So South Heidelberg saw promise in the warehouse project, which more people seemed open to.
Decades ago, a Clorox plant was proposed on the site. In 2014, EmberClear proposed a natural gas-to-gasoline facility at Krick Lane and Mountain Home Road. The Canadian company later dropped the project amid community opposition and concerns about obtaining all necessary permits.
EmberClear was a “very contentious project,” McKee said. At the time, the Board of Supervisors approved zoning changes allowing for more intense industrial uses.
“It was not really well-received by the community,” he said. “And there was quite an uproar.”
Zoning overlays that allowed for more intense industrial uses, like a natural gas-to-gasoline plant, have been repealed, McKee said.
South Heidelberg has zoned nearly 68% of its 8,832 acres for agricultural use. Industrial makes up 7% and commercial a mere 3%. Residential property makes up the remaining 22%.
The warehouse project is expected to generate $1.6 million in property taxes for the municipality and $12.6 million for the Conrad Weiser School District over the 10 years. The undeveloped parcels currently generate $1,072 in annual property taxes for Cumru and $8,108 for the school district. In the first year alone, the developed property would bring $38,624 to Cumru and $292,053 to Conrad Weiser schools, the township estimates.
“This project, from our standpoint, is not as contentious. It's not chemicals. It's not gas-to-liquid conversion,” McKee said, adding that “the developer’s ability to be a good neighbor and responsible and follow our ordinances” is also notable.
While many communities are embracing LERTA districts, at least one Berks County municipality abandoned the idea earlier this year.
In Cumru Township, officials in October repealed a LERTA designation for land along Route 10 and Freemansville Road. A 739,000-square-foot warehouse was proposed for the 171-acre lot owned by Brian Johnson, CEO and president of Mail Shark, but the plans were abandoned in August amid legal challenges from neighbors.
Two Cumru commissioners said the township could not afford to offer tax relief as it faces operating deficits, the Reading Eagle reported.