Who can apply for a City Revitalization & Improvement Zone?

One in a series explaining key terms and concepts of Pennsylvania government. Today’s topic: City Revitalization & Improvement Zone, part three of six.

 Seeking a better understanding of Pennsylvania’s issues and proposed solutions? Sometimes, complicated jargon and concepts can get in the way. That’s why we started Explainers, a series that tries to lay out key facts, clarify concepts and demystify jargon. Today’s topic: City Revitalization & Improvement Zone, part three of six.

Cities with populations over 30,000 can apply to Pennsylvania’s Department of Economic & Community Development for a CRIZ designation, if they haven’t been in a receivership, and:

• Are a third-class city (which is based on population) or• Are engaged in Pennsylvania’s Act 47 process to help distressed cities, and are located in a county that’s not governed by home rule, or• Are in Act 47, within a home-rule county, and partner with that host county, which takes the lead.

State officials also plan to designate a pilot CRIZ in one township or borough with a population of at least 7,000. By that measure, 354 municipalities would qualify. But for the first year of the program, they couldn’t apply because they aren’t statutorily capable of designating authorities, according to DCED spokesman Steve Kratz. Legisltators amended the CRIZ law to eliminate that requirement for townships and boroughs.

How does the state decide which cities get a CRIZ?The state reviews applications. In addition to naming the contracting authority, the application includes a detailed map and business plan (including tax revenue analysis), planned financing sources, and job creation/retention projections. Plans must involve the construction or renovation of at least one facility that will promote economic development.

Where were the first zones located?Bethlehem and Lancaster.Both cities’ zones span the maximum allowable 130 acres.The contracting authority decides the boundaries. Those can change after the state approves a CRIZ, as long as the size of the zone stays the same.

Why did the state choose those cities?Due to their moderately successful redevelopment track records, Bethlehem and Lancaster officials advised people crafting CRIZ legislation. So their applications were ready to go when the state announced the first application deadline, giving communities just 30 days to prepare. The choices provoked criticism because neither city Bethlehem nor Lancaster is as distressed as cities like Erie, York, Altoona and Reading. In those other municipalities, officials’ applications missed the deadline or were rejected. Luzerne County’s economic development division also applied in conjunction with Scranton, in keeping with CRIZ provisions allowing Act 47 towns to apply jointly with home-rule counties. All of those applications are ready for the next application deadline, officials say.

Will any other cities get a CRIZ?They’re supposed to. Starting in 2016, DCED can make another two designations every year.

But the program hinges on state and local governments giving up new tax revenue, so it depends on whether taxes on existing property and other revenues are enough to cover increasing expenses going forward. If budgets get tight enough, officials might want to keep all the money generated by new development.

Some legislators wanted to expand the program so more cities might qualify.

One provision that would have added four cities and three pilot designations during 2014 and 2015 ultimately was deleted from one piece of legislation.

Another bill would allow cities to apply even if they’ve been in a receivership. That would affect only Harrisburg.

 

Did this article answer all your questions about the City Revitalization & Improvement Zone? If not, you can reach Emily Previti via email at emily_previti@witf.org or through social media @emily_previti. Have a topic on which you’d like us to do an Explainer? Let us know in the comment section below, or on Twitter @PaCrossroads.