Downtown Lancaster—Is That the Place To Be in 2014?
Good news for developers, builders, contractors, and city residents.
2014 is already shaping as an exciting New Year for the City of Lancaster. It was announced earlier this week that Lancaster was selected as one of two cities (the other Bethlehem) for the City Revitalization and Improvement Zone (“CRIZ”) program based on legislation that was passed and signed into law in July by Governor Tom Corbett. The CRIZ program was crafted by local politicians including Mayor Rick Gray and Senator Lloyd Smucker.
In order to spur economic development and investment in certain areas of the city of Lancaster, the state of Pennsylvania is providing support through the CRIZ program.
How Does It Work?
Lancaster has a 7-member CRIZ authority board that will approve projects, borrow money, and issue bonds for construction and rehabilitation projects focusing on vacant, desolate, underutilized, or abandoned space. The debt service on the borrowings will be financed by certain state and local taxes above a baseline amount. Most state taxes collected within the CRIZ will be transferred to a CRIZ fund. The Pennsylvania Revenue Department will make annual payments from the fund to the municipal authority until the bonds are retired. Business owners within the CRIZ will file and pay their taxes as normal. Behinds the scenes, the taxes they pay up to a baseline amount go to the state or local government. Taxes above the baseline amount will ultimately go into the CRIZ fund to fund these projects.
The CRIZ Authority is responsible for designating the zones (up to 130 acres), providing or borrowing money for development, improvement, or construction within the zone, and preparing a list of qualified businesses and construction contractors operating within the zone. The CRIZ duration will last approximately 30 years, which should be long enough to pay down the debt from these projects. The initial funding of projects is most likely to begin in late 2014.
Currently, it appears that the CRIZ authority is focusing on improvements in areas in and around downtown Lancaster. The eight projects that were listed in the city’s application focused primarily on the downtown area and included the Hotel Lancaster and the Bulova Building.
Initially, the construction and contracting industry should see job creation coming from these projects. As these projects move toward completion, the goal is to attract new or existing businesses, entrepreneurs, and residents looking for a more urban lifestyle. The City hopes that this will foster increase tax revenue without increasing tax rates. The real goal is to attract businesses and people that will continue to support a thriving downtown, create jobs, enhance commerce, and improve the lives of city residents and visitors.