Plans to build a roundabout at Route 934 and Clear Spring Road have run into a major roadblock.
In April 2022, a $3 million Pennsylvania Department of Transportation Multimodal Transportation Fund (MTF) was awarded to Exel Inc. for traffic improvements to Killinger Road and a new roundabout on Route 934 at Clear Spring Road. Exel Inc. is the DHL-subsidiary that is developing a nearly 3 million-square-foot logistics park.
Read More:
- $3 million grant awarded to reduce traffic impact of Clear Springs Logistics Park
- RTK request reveals details of SR 934 roundabout, other improvements for DHL
Nearly 2.5 years later, construction of the roundabout, which has ties to the development of that South Annville Township logistics park, is in question due to numerous factors.
Read More: Lebanon County gaining traction as key freight corridor for movement of goods
A DHL official and a representative of the company’s legal counsel met with Lebanon County Commissioners on July 17 to gauge interest in the county taking ownership of the state grant it received for the roundabout’s construction. As part of that request, DHL said it would also provide $1.1 million in unencumbered private funds from the logistics company to the county.
In a letter sent to the county in late July from DHL that was obtained by LebTown, DHL official Kelli Post wrote the result would be that “the County will have all control over the grant, the design and construction and the funds to complete the Project.” Post is a senior director of incentives and site selection at DHL.
Furthermore, DHL said the county could use the $1.1 million at its discretion, meaning the county would reap a windfall if the roundabout project stayed within its estimated cost.
It was stated by county officials at that meeting that those monies could be used for county-based transportation projects. County officials have been vocal to state officials about rising costs that are straining local coffers, especially concerning vital social service programs the county provides to residents.
Read More: County officials say financial mental health crisis is looming across PA
Post told commissioners at the July workshop that the firm had already completed the Killinger Road improvements at its own cost since that work was necessary for its warehouse project to move forward and is not obligated to construct the roundabout.
Whether the roundabout will get built, however, is another matter.
Obstacles standing in the way of the project are:
- A new Pennsylvania Department of Transportation Letter of Credit requirement for transportation projects involving private entities.
- Eminent domain proceedings for a sliver of preserved farmland needed for the roundabout’s construction.
- A proposed North Annville township ordinance to limit the size of trucks on Clear Spring Road.
These challenges have hindered progress for a project located at an intersection that traffic officials consider to be hazardous, and one they expect will continue to get worse.
Another grant shift request to the county concerned the resignation of a township supervisor amidst negotiations between North Annville and DHL, according to Post.
In the letter Post notes that DHL was required as part of its land development plan to make improvements to Killinger Road, which is the access road to the warehouse site and a connector to Route 934 to the north.
Read More: Your guide to the warehouses under construction in South Annville Twp.
DHL’s consultant then “investigated potential competitive grant funding sources to offset the cost of the improvements” and recommended pursuing the $3 million grant, the maximum amount provided by PennDOT.
Since the grant amount would exceed the projected $1.3 cost for the Killinger Road improvements, DHL decided to include the roundabout in its grant application, which in April 2022 was estimated to cost about $2.6 million. (That estimate has risen to $2.9 million as of this spring, said Post.)
Post’s letter to commissioners notes the Route 934 intersection had “been identified in the 934 Safety Audit as a safety hazard for the community and needing improvement,” and it was volunteering to realign and reconstruct the intersection as part of the scope of its MTF grant application.
The letter states that Michael Baker International had performed the safety audit of the state route that connects Route 81 near Fort Indiantown Gap to Route 422 in Annville and Route 322 where it ends.
Post characterizes the move to assign the grant to the county as a win-win for travelers to address safety concerns at a hazardous intersection while also optimizing truck traffic movements.
Post and Saxton & Stump attorney Kathy Bruder told commissioners on July 17 that a top concern for DHL was PennDOT issuing an edict requiring a letter of credit equal to 115 percent of the estimated construction costs.
Post wrote in her letter “because the construction cost estimates in DHL’s application were $4.1 million, a letter of credit in the amount of $4.715 million would be required.” She delivered a similar message at the July 17 meeting – although the credit figure stated at the meeting was just under $4.9 million.
That financial commitment, however, is one that officials with Deutsche Post, the company that owns DHL, are unwilling to make, according to Post.
The letter reads: “Alas, when the new requirement for the letter of credit was imposed, DHL’s leadership made the difficult decision to halt the grant process, as it simply cannot justify encumbering $4.715 million in cash to satisfy the letter of credit.”
The company trades on the Frankfurt Stock Exchange with a current market cap of $48.67 billion and stated in March that it expects to generate more than $3.2 billion in free cash flow this year.
PennDOT spokesperson Alexis Campbell wrote in an email to LebTown that the agency in May 2024 revised its MTF agreement to require a 115 percent letter of credit from non-political entities. She added DHL was included in the requirement because the grant had not yet been executed.
Jon Fitzkee, the county’s senior transportation planner, told LebTown that municipalities have been required to provide project security, usually via their liquid fuels tax funds they receive from the commonwealth. He added that PennDOT had changed its guidelines to include private entities at the request of municipalities to ensure transportation projects get completed whether they’re conducted by private or public entities.
Bruder said her firm had worked with state Sen. Chris Gebhard’s office for more than a year to help secure the grant and address compliance issues, adding those requirements made the roundabout project a lengthier process then DHL expected. She said one compliance issue involved the Department of Environmental Protection and the environmental changes caused by using “a slight amount” of preserved farmland of the Bomgardner farm along state Route 934.
At the July 17 workshop, Post told commissioners that farm owner Matt Bomgardner was willing to have his land used for the roundabout. The letter states .6 acres are needed for the project right of way.
Because the land is preserved, it would have to be removed via eminent domain proceedings from the farmland preservation program, which sets in motion a set of procedures to be met.
LebTown had previously reported Fitzkee saying private entities have no authority to initiate those proceedings since eminent domain is reserved as the government’s power to take private property for public use, with the owner’s consent and proper compensation.
Craig Zemitis, farmland preservation specialist with the Lebanon County Conservation District, said the county pays farmers $2,500 an acre to preserve their land and that equivalent funding for whatever land was required for the right of way would have to be returned to the farmland preservation fund.
Zemitis said the law also requires the landowner to be compensated for land that was condemned.
The process for returning land that’s been preserved starts with the filing of paperwork to the conservation district, a move that Zemitis said had not occurred as of early August.
Since eminent domain proceedings must occur with a government entity, that responsibility would fall on either North Annville Township, Lebanon County, or possibly PennDOT – although a PennDOT official emphasized to LebTown that the roundabout is not a state-initiated project.
Lebanon County administrator Jamie Wolgemuth told LebTown during a follow-up interview that the county has never exercised its eminent domain powers during his nearly 30-year career.
Read More: Roundabout plan for Route 934 & Clear Spring Road under review by PennDOT
While commissioner Jo Ellen Litz said she is opposed to eminent domain, chairman Bob Phillips and Mike Kuhn said they were reserving comment because too many questions about the project remain unanswered.
“Based on information provided (July 17), this seems like something that we should support,” said Kuhn, “and when I boiled it down to its essence, our planning department is saying that this is a bad intersection now, it’s a safety issue and it is something that we’re going to have to deal with in some point in time as a county to improve it. They (DHL) already spent $300,000 on engineering work, we have a grant coming for $3 million and DHL is putting $1.1 million in on top of that.”
Those “win-wins” initially made Kuhn want to support the project, adding “all the stars at that time were aligned,” but now he’s “uncertain that’s the situation now” given questions that have arisen about the project. Those questions – with eminent domain being among them – are a “bump in the road” for Kuhn.
Kuhn said he still needs input from the county solicitor, the farmland preservation board and others in case there’s something he’s missing about DHL’s proposal.
“To give up six-tenths of an acre to vastly improve the safety of that intersection, but I’m also looking at the bigger picture,” he added. “If this doesn’t get done, and those trucks don’t use that road, where do they go? It’s already a mess in Annville at (Route) 934 and in Palmyra at key drive times, so this is going to add to that and it’s not a good thing overall for Lebanon County.”
If trucks with trailers are unable to use Clear Spring Road should the ordinance pass, then they will be forced to travel a half-mile east from Killinger Road to downtown Annville via Route 422 – a road that both Kuhn and Phillips noted is already overly congested – or west to Palmyra, equally bad during various times of the day.
Annville Township manager Candie Johnson said her township shares the same concerns as its neighbors, North and South Annville townships, and added that the township had not been involved with the county in conversations concerning the roundabout.
“Like North and South Annville, we all have concerns about increased traffic flows that affect all our residents as a larger community combined,” wrote Johnson in an email to LebTown. “I would hope that all 3 townships could be a part of a solution that will ultimately benefit all of us.”
Phillips questions whether the roundabout is needed if North Annville supervisors pass a proposed ordinance to limit the size of vehicles on Clear Spring Road – an initiative that’s on their agenda for a vote at their next public meeting on Monday.
“I’ll cross that bridge when I get to it,” said Phillips, about his possible support for eminent domain proceedings. “There’s an ordinance being considered by the township that would reduce the need for it in terms of the Clear Spring Road transportation approaching that intersection. The safety of that intersection was kind of dominant in my thinking that we have the funding and let’s do what it takes to get the parties lined up, which I thought most of that was already done.”
The county’s potential involvement in the roundabout was put on hold when Phillips learned about the pending ordinance.
On Monday, North Annville supervisors will consider whether to approve an ordinance to limit trailers on Clear Spring Road to a maximum length of 43 feet, provide for the placement of appropriate signs indicating such restriction, and provide for a penalty for any party who violates those terms.
Trucking company Schneider notes on their website that a standard dry trailer is “53 feet long and that it overlaps over top of the tractor, making the unit about 70 feet.”
The ordinance does have a provision for “any business located upon Clear Spring Road which has no alternate route available in order to access its business may apply to the Township for an Exemption Permit.”
A second ordinance would set the speed limit on that two-mile stretch of highway, which connects Killinger Road at Route 422 to Route 934, at 35 mph, down from 40.
“My answer is to wait and see what they do with the ordinance,” said Phillips. “My hope would be that if there ends up being another alternative (a no vote on the truck size ordinance), then eminent domain is something that I would want to consider.”
Phillips said he is being told that the ordinance’s passage would “reduce one of the prime reasons for doing the roundabout,” adding that would launch further discussions with the county’s planning department.
North Annville Township supervisor Adam Wolfe told LebTown the ordinances were developed following a Clear Spring Road Corridor traffic study conducted in November 2023 by Lititz-based traffic and engineering firm ELA Group Inc.
The study, which cost the township $50,000, was commissioned due to township concerns about traffic impacts on Clear Spring Road.
In their findings, Wolfe said ELA’s study shows that vehicles larger than 43 feet would off-track by three feet when traveling on Clear Spring Road, meaning vehicles would be outside their travel lane.
Read More: N. Annville Township residents review plans for Clear Spring & 934 roundabout
Township solicitor Paul Bametzreider said he doesn’t know whether implementing the ordinance will lessen the need for a roundabout.
“That’s something that would have to be worked out by the traffic engineers as to whether or not that ordinance would reduce the volume on Clear Spring Road to the point that a roundabout would not be necessary. I have not seen anything that would say that,” he said.
In still yet another matter that has contributed to the project’s delay, Post stated on July 17 that DHL was also looking to move the project to the county following the departure of former North Annville Township supervisor and board chairman Randy Leisure, who resigned in May due to health.
Read More: N. Annville Twp. chairman steps down for health reasons after 10 years of service
“The township’s capacity isn’t there, they haven’t done a project of this nature,” Post told commissioners on July 17. “Randy Leisure was championing this and now that he’s resigned, it’s become more of a challenge. We don’t believe it will get done in a timely manner, is my personal opinion. He was instrumental with the public and was helping us champion this project.”
Bametzreider agrees with some of Post’s assessment.
“Randy was moving forward with the project and on some level was a supporter of the project. I don’t know if either of the other two supervisors stated a position one way or another, so therefore I can’t tell you if their position changed from then until now,” said Bametzreider. “All I know is that the township was trying to arrive at an agreement with DHL regarding the administering of the project and the grounds on which the township would apply for the HOP, the Highway Occupancy Permit, to PennDOT that would be necessary for this project.”
Since the township was the local agency, it would be the HOP applicant, he added.
“The township was in the process of trying to reach an agreement, going back and forth with DHL, but that was never finalized. So, where everybody stands on it, I really can’t say. There’s never been an official vote. We never came to a final agreement regarding what the township’s role would be,” Bametzreider said. “DHL, more or less, decided they wanted to get the county involved and on some level I can agree with them. I believe the county would be the better party to administer the project. I believe this project is much bigger than North Annville Township (can handle).”
Bametzreider added the county’s involvement makes more sense since the roundabout project will impact the entire western portion of Lebanon County.
Another sticking point in the North Annville Township and DHL negotiations involves financial responsibility for the roundabout construction liability, he said.
“We were trying to work out the fine details of the agreement, who was going to be responsible for what,” said Bametzreider. “Of course, the township didn’t want to run the risk of being responsible for anything financially. Quite frankly, DHL was trying to limit its exposure financially and that’s kind of where things were – trying to determine who was going to be responsible for what.”
Bametzreider said DHL and North Annville Township did not discuss as part of their negotiations the 115 percent PennDOT requirement.
“DHL wanted the agreement to say that they would not be responsible for anything above and beyond the $3 million and, of course, the township was responding and saying, ‘Well, we’re not going to have any liability associated with this.’ So I guess the question became who was going to be responsible for any of those (potential) additional expenses.”
Bametzreider said negotiations had stalled and the next thing he heard was that DHL went to Lebanon County officials to involve them.
What happens next is unknown as county officials sort through the questions they have. What is known is that DHL gave the county until Sept. 30 to receive the $1.1 million in their bank account and take assignment of the PennDOT grant.
“We are hopeful that the County will carry out the Project which we believe is a win-win for the County, its residents and the logistics industry that is so prevalent along this corridor,” wrote Post.
If it accepts assignment of the grant, Lebanon County would have to hire contractors, pay them for the invoices they submit and then provide those invoices to PennDOT for approval and potential reimbursement via the grant, according to Fitzkee.
It was noted at the July meeting that there have been 10 accidents with reportable injuries over the past five years at that intersection. A recent inspection by LebTown of the intersection revealed that a guardrail on the north side of Clear Spring Road that sits in front of a residence at that location had been crushed.
“It’s already an unsafe location that we’ve identified,” Fitzkee told commissioners on July 17. “If that $4 million goes away, we’re going to have to find some way to fund that within the MPO (Metropolitan Planning Organization) program at some point in the future.”
LebTown previously reported that PennDOT’s research shows that fatalities, injuries and crashes were reduced at intersections where roundabouts were constructed. To learn more about roundabouts, visit PennDOT’s website.
Davis Shaver contributed reporting to this article.
Questions about this story? Suggestions for a future LebTown article? Reach our newsroom using this contact form and we’ll do our best to get back to you.
Free news isn’t cheap. If you value the journalism LebTown provides to the community, then help us make it sustainable by becoming a champion of local news. You can unlock additional coverage for the community by supporting our work with a one-time contribution, or joining as a monthly or annual member. You can cancel anytime.
More Top Stories
Something went wrong. Please refresh the page and/or try again.
