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CRIZ 101

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CRIZ 101

  1. 1. Lancaster City Revitalization and Improvement Zone Program 101
  2. 2. • 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.
  3. 3. • Program administration – The City must create a CRIZ Authority under the auspices of the Municipal Authorities Act to administer the program – The CRIZ Authority will establish the CRIZ Districts • Up to 130 acres total can be included – The CRIZ Authority will manage the program and will be the entity that will issue bonds to provide project financing
  4. 4. • Nominated CRIZ Board Members – Tom Baldrige – Dan Betancourt – Jill Carson – Ray D’Agostino – Cinthia Kettering – Robert Shoemaker – Charles Simms – Gerald Simmons – John Reed – Non-voting • Matt Parido • Randy Patterson
  5. 5. • Uses of bond 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 furniture, fixtures and equipment for a facility owned by a public authority, such as the Convention Center
  6. 6. • 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
  7. 7. • How does it work – CRIZ Authority will issue bonds based on the expected level of new State and local tax revenues that will be generated by projects and existing businesses – The State establishes a base year, let’s say 2013 for Lancaster, to determine existing levels of revenue generated within the CRIZ. – All eligible revenues that exceed the level of revenues generated in the base year are made available to the CRIZ Authority for debt service
  8. 8. – This revenue is then held by the Commonwealth and returned to the CRIZ Authority to cover the annual debt service payments for bonds that have been issued. – Bonds can be issued over time with differing maturity dates and in different dollar amounts needed to finance projects being considered at the time. – All bonds must be repaid within 30 years of establishing the CRIZ. – Matching funds must be provided in a ratio of no less than five CRIZ dollars to every one private dollar invested (no project will receive 100% of the financing needed through the CRIZ)
  9. 9. • Limitations – Eligible tax revenues generated by any 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 are considered new revenue – For existing businesses in the CRIZ, only those revenues generated that exceed the revenue generated in the base year will be available to the CRIZ Authority
  10. 10. • Examples – Existing City, County or Pennsylvania business moves into the Bulova Building. Only the revenue generated by existing employees or new employees that exceeds the revenue now generated by the business and its employees will be available to the CRIZ Authority. – An existing restaurant opens a second location in the CRIZ. 100% of the eligible State and local tax revenue generated will be available to the CRIZ Authority.
  11. 11. • How will projects be selected: – All projects will be submitted to the CRIZ Authority for review and selection – Projects must be located within the designated CRIZ areas (up to 130 acres of the City can be designated) – Most projects must be able to generate new state tax revenue to support the level of financing being provided
  12. 12. • Level of Financing that could be provided to a project: – Financial assistance will be based on eligible new state and local tax revenues that are generated by the project – If insufficient revenues are projected then the remainder of any financial assistance provided to a project would be based on the projects ability to pay the debt service on the loan – Matching fund requirement will also determine total amount of financing that could be provided – CRIZ Authority may borrow against the baseline for the first 7 years up to $10 million per year (this must be paid back to the State over the 30 year life of the CRIZ Program)
  13. 13. • Timeline – City Council will establish the CRIZ Authority in October 2013 – The CRIZ Authority will be asked to approve the application to the State seeking approval to establish the CRIZ • DCED is currently preparing program and application guidelines – The CRIZ Authority is expected to submit the application before the end of the year which will include the initial designation of the CRIZ districts
  14. 14. • Timeline – DCED has 90 days to approve the application and authorize the creation of the CRIZ – Tax reports of all businesses located in the CRIZ must be submitted to the State by June 2014 – Baseline tax revenues for 2013 will be certified by the State before October 1, 2014 – The CRIZ Authority will then be in a position to issue bonds knowing the baseline revenue – Financial assistance for projects will be available late 2014, but more likely Spring of 2015
  15. 15. • Where we are today – Mayor has announced who will be presented to City Council to serve on the CRIZ Authority Board – We are currently finalizing the CRIZ areas for the City (the 130 acres) – We are defining some of the initial projects that would be financed • Conestoga Plaza Commercial Project • Convention Center FF&E • Lancaster Square (east side) including the Bulova Building, the plaza area, the Brunswick Hotel property and the Annex buildings • Aquatic Center
  16. 16. • Where we are today – Pulling together property database information that must be included in the application – Developing a list of businesses that are located within the CRIZ areas – 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 reporting requirements
  17. 17. • 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 – Job growth and retention of existing jobs by providing Class A and B commercial office space for new businesses, relocating businesses or expanding businesses – Increase job opportunities within the City for City residents through recruitment of businesses that create professional job opportunities
  18. 18. • Benefits to the City – An opportunity to recruit new businesses to the City – Equalize the economic advantages of developing in the suburbs vs. the City – 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 long term

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