Lancaster’s City Revitalization Improvement Zone (CRIZ)
At this month’s Lancaster Commercial & Industrial Real Estate Council’s meeting Randy Patterson, Director of Economic Development & Neighborhood Revitalization, presented the City of Lancaster’s newly received City Revitalization Improvement Zone (CRIZ) designation. Pennsylvania’s CRIZ program is a tool designed to bolster economic development within a designated area containing up to 130 acres over a period of 30 years. To be eligible for a CRIZ designation a city must be a third class city with a population of at least 30,000 residents. The primary driver of this program is the use of state and local taxes generated within the designated CRIZ to repay debt services for developers and property owners within that CRIZ. The funds can be used to pay for debt services related to new construction, infrastructure improvements, renovations and reconstruction of existing structures.
Patterson indicated that Lancaster’s compact nature lends itself to walkability, a huge benefit for city residents but a problem when it comes to attracting commercial growth. The City of Lancaster intends to focus on infill development, specifically of vacant and underutilized properties located within the CRIZ. The purpose of the CRIZ is to lure new businesses into the zone with the tax advantages offered through this program. Lancaster’s CRIZ is just under 130 noncontiguous acres, with the bulk of the CRIZ centered in the City’s Core around Lancaster Square. There are areas south of the City’s core as well as in the north east of the City that contain underutilized properties that were also included in this 30 year program. He explained how areas of land could be swapped out for acreage in infrastructure improvements, but how Lancaster chose to focus only on infrastructure within the CRIZ. He pointed out how specific parcels were purposely avoided within the zone because they were public or religious properties that do not generate revenue. The primary purpose of the CRIZ is to create new jobs and boost the economy over a period of 30 years; therefore residential developments or public buildings wouldn’t be approved by the CRIZ Authority. Patterson went into great detail concerning what kind and the amount of taxes eligible for CRIZ funding.
How does the CRIZ stack up to Allentown’s NIZ?
The CRIZ was inspired by Allentown’s Neighborhood Improvement Zone (NIZ), which has served as a catalyst for economic development in the heart of downtown Allentown. The CRIZ program has distinct differences in the tax structure as well as the legislation governing the two programs. The major differences between Lancaster’s CRIZ and Allentown’s Neighborhood Improvement Zone (NIZ) revolve around what taxes are eligible to be used for funding. This will be based on the taxes collected in 2013 to establish a baseline. For example, only a portion of the taxes from a Pennsylvania corporation that decides to move their business to Lancaster’s CRIZ would go back into the CRIZ funding as determined by the 2013 baseline. If the company were from out of state 100% of the specified taxes would go back to the CRIZ. Allentown’s NIZ is much more lenient and allows more taxes to be used for reinvestment in their zone. Also, local taxes of employees who live outside of the City of Lancaster would not be eligible for the CRIZ funding as they are in Allentown. The CRIZ is specifically designed to lure new business in from out of state or create new businesses within the CRIZ. It also encourages businesses within the CRIZ to hire local residents.
Lancaster has acquired a great tool to help revitalize sections of the City in the next 30 years. Working out the details and getting the word out to the community is the next step in this exciting venture. There’s no doubt that Lancaster, with its thriving community will make the most of the CRIZ program.
To learn more about redeveloping properties located in a designated CRIZ please contact Element.