A logistics firm’s request of the Lebanon County Commissioners in mid-July to assume the proposed Route 934 roundabout project is a deal that’s now dead on arrival.
On Friday, Sept. 6, Exel Inc. withdrew its offer to provide the county $1.1 million in unencumbered funds to manage construction of the roundabout at the intersection of Clear Spring Road and Route 934 in North Annville Township.
That million-dollar-plus offer was made at a July 17 workshop of county commissioners.
Exel is a DHL-subsidiary that has developed a nearly 3 million-square-foot logistics park in South Annville Township, about 2 miles south of where the proposed roundabout would have been built.
In a letter to commissioners dated Sept. 6, a DHL representative announced it was rescinding its $1.1 million offer to the county.
The letter also sets a Sept. 20 deadline for the county to determine if it wants DHL to assign a $3 million Pennsylvania Department of Transportation multimodal transportation fund grant to them.
DHL was awarded on April 21, 2022, a $3 million PennDOT multimodal transportation grant for the roundabout construction project and traffic improvements on Killinger Road in South Annville Township, which is where their warehouse and several others are located.
DHL had announced in mid-July that it had moved forward with the Killinger Road traffic improvements – as required in its land development plan – to advance construction of its warehouse but still had the PennDOT funding to apply to costs associated with the roundabout project.
Funds are disbursed from the state as invoices are submitted and approved for construction costs under its MTF program.
At that mid-July meeting, DHL asked commissioners if they were willing to serve as administrators of the roundabout project, which was estimated earlier this year to cost $2.9 million.
“I was going to use DOA, dead on arrival, but dead on the vine is fine, too,” said commission chairman Robert Phillips, reacting to DHL’s letter to county officials. “I was moving in that direction as a result of the ordinance, but I wanted to hear if the September (30th deadline) date was firm and instead they moved it up to the 20th. At the same time, they also removed the $1.1 million.”
At the July workshop, DHL had presented a deadline of Sept. 30 for a decision from commissioners on its proposals but has now moved it up by 10 days.
DHL representative Kelli Post wrote in the Sept. 6 letter that the Aug. 12 decision by North Annville Township supervisors to pass a trailer-size ordinance restriction for Clear Spring Road was a reason DHL decided to withdraw its offer of $1.1 million to the county.
“North Annville Township passed Ordinance No. 1-2024, limiting trucks with trailers to a maximum length of 43 feet on Clear Spring Road, an action that immediately prohibits DHL trucks and other industrial developers from utilizing Clear Spring Road in route (sic) to I-81. This unfortunate turn of events coupled with the lack of a public entity to administer the Project has caused the reevaluation of the private investment in this Project. If trucks of the size commonly used in industrial operations are not permitted on the roadway that will be improved, DHL simply cannot justify a private contribution of an additional $1.1 million toward the improvements above the $700,000 that has already been expended. Regretfully, we must formally retract the offer of $1.1 million in unencumbered cash toward this roadway safety project,” wrote Post, senior director of incentives and site selection at DHL, in her letter.
Following that mid-July meeting, LebTown reported several concerns that had arisen about the project.
Those concerns included eminent domain proceedings on property within the state’s farmland preservation program and noise and stormwater drainage issues raised by officials of GraceLife Church, which has a water retention basin on their property in proximity to the Clear Spring Road and state Route 934 intersection.
Read More: Proposed Route 934 roundabout missing approvals from two property owners
Phillips noted issues that were revealed after the workshop session had dissuaded him from voting for the county to assume the PennDOT funding associated with the roundabout project.
“To me, there’s too many things that have developed over the last month that have me as a no support for moving forward on that project,” he said.
Phillips added no action is necessary by commissioners on this proposal since they only gathered information by entertaining a meeting with DHL to discuss their requests. He noted he was initially in favor of the proposal because, as presented, it would have addressed public traffic safety concerns.
“People were just remarking at the meeting that there are public safety concerns and whenever I hear the danger of an intersection and that there’s funding for it, I really have to have a good reason for walking away from that,” said Phillips. “But now that we have more than one solid reason, that’s what makes me comfortable with my thinking now.”
Lebanon County Commissioner Jo Ellen Litz said she believes a roundabout isn’t necessary now that North Annville Township has passed its trailer-size restriction ordinance.
“Quite frankly, I think they were going to be putting 500 trucks a day onto Clear Spring Road, which would have really demanded, for a lack of a better term, a roundabout,” said Litz. “But without all of those trucks, I don’t know that we really need a roundabout. There are other alternatives that are much cheaper.”
Read More: N. Annville Twp. supervisors pass two ordinances for Clear Spring Road
Litz added that she was skeptical of the county receiving funding from a private entity.
“I’ve always found with things that seem to be too good to be true that they are, and I say that kindly in that I don’t want the appearance of the county being bought,” she said. “So I’d rather do it the right way and not have that question out there in people’s mind: What did they get for that $1.1 million? People will not believe, no matter how hard you try to explain it, they will not believe that you did not benefit somehow from all of that money.”
DHL had explained to commissioners in mid-July that $1.1 million of the funds earmarked for this project was unencumbered, meaning the county could use those dollars for the roundabout project, if needed, or however it wished.
Some of that $1.1 million would have had to be used for eminent domain proceedings since DHL, as a private entity, does not have the authority to condemn land, which would have been necessary to make the roundabout a reality.
Although DHL told commissioners the farmer was onboard with the use of his land for the project, Matt Bomgardner reached out and LebTown reported that he had not approved the project to proceed since no formal conversations were held with him about his land and eminent domain proceedings.
Since LebTown reported that story, it has learned, but not previously reported, that another property would be altered by the roundabout as noted in an email from Eileen (Bomgardner) Kettering.
She wrote to LebTown on Aug. 23 that, “Our property (Kettering and Felty) is projected to be used in addition to Bomgardner’s farm and the church. The people representing the project did not even know our property has a drain field that cannot be affected. We also have not been told or heard anything. I have lived here all my life and know the intersection is a problem….”
County Commissioner Mike Kuhn said the stars appeared to be aligned with what was presented in mid-July, including the farmer’s approval, but that numerous things had changed since that day.
“I looked at it as a windfall that we have a project that we’re going to have to spend tax dollars on, whether that’s local, state or whatever, we’re going to have to spend tax dollars there. Here we have a private entity that’s already spent $700,000 in engineering fees and was willing to give $1.1 million, if I am remembering that correctly, to the county,” he said.
Kuhn said passage of the North Annville Township ordinance lessened the attractiveness of the project. “Again, roads aren’t our responsibility and why would we assume any risk when there’s not the same amount of benefits?” he asked.
County senior transportation planner Jon Fitzkee said at the July workshop that this intersection is one that likely will only get worse in the future and noted his support for the roundabout project.
In a separate letter from Post to commissioners in early August, it noted 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 stated that Michael Baker International had performed the safety audit of the route that connects Route 81 near Fort Indiantown Gap to Route 422 in Annville and Route 322 where it ends.
In that same letter, 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.
Phillips had told LebTown in mid-August he was interested in assuming the $3 million PennDOT grant if it could be assigned to other county highway projects, if the roundabout was not going to happen, and said he needed time to speak with Fitzkee about it.
“It will take an act of Congress to keep that money in Lebanon County. That money will be reallocated,” said Phillips during a telephone interview last Wednesday. “What I’ve been told is that they (PennDOT) probably aren’t likely to be that flexible.”
Fitzkee confirmed with LebTown that Lebanon County would have to file an application and go through appropriate steps if it wished to use that money for other purposes, adding the $3 million MTF grant that DHL received is now off the table.
North Annville Township solicitor Paul Bametzreider, who was copied on the Sept. 6 letter from DHL, said at the Sept. 9 meeting of township supervisors that he had discussed with Lebanon County administrator Jamie Wolgemuth the ordinance and DHL rescinding its $1.1 million offer.
“I think the Governor’s Action Team (GAT) is upset about that and in a call from the Governor’s Action Team they would like to see that roundabout go in, the Governor’s Action Team would like to see it go in, the governor’s office,” said Bametzreider at the township meeting. “I don’t think it is going to happen without that $1.1 million and I think it would be contingent on the ordinance being rescinded. And I told Jamie there’s no way that’s going to happen.”
Wolgemuth said in a follow-up telephone call with LebTown that GAT had contacted commissioners to see if there was a way for them to salvage the roundabout project.
Wolgemuth added that GAT understands local impacts on traffic safety and they don’t want to see any future economic development opportunities being lost with local ordinances being passed.
GAT is a state agency that works with domestic and international businesses, as well as professional site consultants, on projects involving significant investment and job creation opportunities.
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