Lancaster City Revitalization and Improvement Zone Program

• Purpose of the Program– Provide a financial resource to eligible third class

cities in the Commonwealth to improve and develop targeted areas of the City

• Lancaster’s Approach– To focus on infill development on vacant and

underutilized sites, and the redevelopment of existing challenging sites within the City which have some barrier to development.

• Program administration– The City has created a CRIZ Authority under the

auspices of the State’s Municipal Authorities Act to administer the program

– The CRIZ Authority has established the CRIZ District of just under 130 acres

– The CRIZ Authority will manage the program and will be the entity that will issue bonds to provide project financing or act as a pass through of state revenue to a project to pay debt service on a loan

• Eligible Taxes That Generate CRIZ Revenue– Corporate Net Income tax (apportioned)

– Capital Stock and Franchise Tax (apportioned)

– Bank Shares Tax (apportioned)

– Sales and Use Tax (related to activity in the CRIZ)

– Personal Income Tax (for work performed in CRIZ)

– Tax on sales of liquor, wine, malt and brewed beverages in the CRIZ (tax paid to the LCB by businesses)

– Local Services Tax (for work performed in CRIZ)

– Local Earned Income Tax (for work performed in CRIZ)

• Uses of CRIZ proceeds

– Development or improvement of property within the designated CRIZ

– Construction, including infrastructure and site improvements to a site or facility within the CRIZ

– Improvement projects including the acquisition and installation of FF&E for a facility owned by a public authority, such as the Lancaster County Convention Center

• Project Financing Focus– The financing provided will primarily focus on

assisting projects that will:• Create new jobs

• Create new state tax revenues including sales and use taxes; personal income tax; wine, liquor and malt beverage taxes; a number of State corporate and business taxes; local earned income taxes and local services taxes – Property Taxes are not included and we would anticipate that

properties receiving CRIZ Assistance would not be eligible for property tax abatement programs

• How does it work– The State has established our baseline year as 2013.

This will determine the amount of existing state and local tax revenues generated by qualified businesses within the CRIZ.

– Eligible CRIZ revenues will then be those that exceed the level of revenues generated in the baseline year by each qualified business located in the CRIZ

– CRIZ revenue is made available for payment of debt service on eligible projects or for public improvements related to a private development project

– Matching funds must be provided in a ratio of no less than one private dollar invested to every five CRIZ dollars

• Limitations

– Eligible tax revenues generated by an existing Pennsylvania business that transfers into the CRIZ would not be considered new revenue, these revenues are added to the baseline

– Businesses that are new businesses or relocating to the CRIZ from outside of Pennsylvania will be considered new revenue

– For existing businesses in the CRIZ, only those tax revenues generated that exceed the revenue generated in the 2013 baseline year will be available to the CRIZ Authority

• Where we are today– Developing a list of businesses that are located within

the CRIZ areas which must be submitted to the State by June 1, 2014

– Developing an outreach and education program for those businesses and properties owners located within the CRIZ area

– Engaged a consultant to work with businesses on tax reporting requirements. Tax reports must be submitted by June 15, 2014

– Establishing Financing Guidelines and Fee Structure

• Where we are today– We have defined some of the initial projects that

may be financed• Conestoga Plaza Commercial Project

• Convention Center FF&E

• Lancaster Square (east side) including the Bulova Building, the plaza area, the Hotel Lancaster property and the Annex buildings

• Aquatic Center at Burle

• RRTA Air Rights above the Garage on North Queen and East Chestnut

• Kepple Building in the 300 block of North Queen

• Benefits to the City

– Ability to reposition and redevelop properties that have sat vacant or underutilized for a significant period of time, i.e. east side of Lancaster Square, Conestoga Plaza, 800 block of North Prince Street

– Equalize the economic disadvantages of developing in the City vs. the suburbs

– Job growth and retention of existing jobs by providing Class A and B commercial office space for new businesses, relocating businesses or expanding businesses

• Benefits to the City

– Opportunity to recruit new businesses to the City – Increase job opportunities within the City for City

residents through recruitment of businesses that create professional job opportunities

– Grow the property tax base through increased assessment of properties that are redeveloped or vacant sites where new construction occurs

– Grow earned income tax revenue over the longer term

Contact Information:

Randy S. Patterson, DirectorEconomic Development & Neighborhood RevitalizationCity of Lancaster120 North Duke StreetP.O. Box 1599Lancaster, PA 17608-1599

Tel: 717-291-4760Mobile: 717-201-7498Fax: 717-291-4721Email: RPatterson@cityoflancasterpa.comWebsite: www.cityoflancasterpa.com