HERMITAGE — The tax incremental financing plan proposed for a retail development in Hermitage anchored by a Kohl’s department store is on the agenda for the Commonwealth Financing Authority’s meeting Tuesday in Harrisburg.

The authority is an independent board that administers economic stimulus programs and, in this case, will decide whether the state will guarantee the bonds that will be issued to help fund the development.

The authority could make a decision at the meeting, if the TIF remains on the agenda, said Theresa Elliott, deputy press secretary for the Department of Community and Economic Development.

“The TIF is on the agenda, but the board agenda is tentative and subject to change,” she said, adding that the authority’s agenda “is fluid right up until the start of the meeting.”

The authority next meets Sept. 12.

Jill Newcomer, assistant secretary and treasurer for MCIDA and vice president of local industry for Penn Northwest Development Corp., said she believes the board can defer action on the plan, and she is not sure what to expect from the hearing.

“I’ve not been through a CFA application previously,” she said. “Everyone that I’ve asked said it can be different every time.”

While there are procedural steps that must be undertaken before the bonds can be issued, the CFA’s decision is the last one contingent upon an entity that has not already given its support to the project.

The guarantee, which would drive down the interest rate on the bonds, is necessary for the project to go through, according to the developer, Levey & Co. of Akron.

Levey wants to build the development - for the Kohl’s and three or four outparcels - at the Shenango Valley Freeway and South Hermitage Road.

Under the TIF plan, the city, Mercer County and Hermitage School Board would defer 69 percent of new property taxes generated by the construction to pay for the bonds, which are issued to generate cash primarily to widen the freeway between Maple Drive and North Hermitage Road, install a traffic signal, improve storm water drainage and deal with poor soil conditions.

Levey wants to raise $3.7 million from the bond issue toward the estimated $17.6 million project. The bonds, bought by investors, would be paid back over 20 years, and Levey estimates the total payback will be $5.9 million.

Under the TIF program, the state will guarantee no more than $5 million in principal and interest.

Levey estimates that, when all parcels are developed, the property will be assessed for tax purposes at $5.1 million – the second highest property assessment in the county – and generate $443,802 a year in property taxes, split among the taxing bodies, an increase over the $15,933 the property now generates.

Sixty-nine percent of the $427,869 increment, $295,330, will go to paying off the bonds.

Each taxing body has approved the TIF.

The seven-member CFA is made up of the secretaries of banking, the Department of Community and Economic Development, and budget; a former state attorney general; a Philadelphia-area businessman; and representatives of the Pittsburgh and Scranton chambers of commerce.

Newcomer said MCIDA completed the single application that all entities seeking state assistance fill out, and attached the TIF plan approved by MCIDA and the taxing bodies.

There have been several contacts back and forth but most of the questions of Newcomer have been about clarifying details in the plan, such as interest rates.

“Kind of boring stuff,” she said. “I know they’re comfortable with the resolutions, all the documentation that we were required.”

Levey has been asked for more detailed information, mostly about the company’s financial position, she said.

“They want to make sure they are a financially sound company,” Newcomer said.

It’s up in the air whether any local officials will attend the hearing.

MCIDA President Douglas Riley said he’s gotten conflicting opinions on whether he should attend.

“It’s my understanding that we are not required to attend,” Newcomer said.

Riley said the TIF application process has been a learning experience.

“This is the first time we’ve ever gone through this, and this is all new to us,” he said. “To be honest with you, it’s a different process.”

If the CFA guarantees the bond issue, city commissioners will hold a public hearing at 6 p.m. July 19 on the boundaries and blight designation for the TIF district.

At least three weeks later, the commissioners must adopt a resolution creating the district and establishing the boundaries, with supporting findings of fact attached, said City Manager Gary P. Hinkson.

After that action, MCIDA would start work on the bond issue, Newcomer said.