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More CRIZ this year? York is ready either way

Current law calls for next wave of designations in 2016

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Will York join Lancaster and Bethlehem with a City Revitalization and Improvement Zone this year? Maybe.

Several legislative proposals have been put forth to not only expand the CRIZ — a state program designed to help cities of at least 30,000 people boost redevelopment and revitalize abandoned and blighted areas through 130-acre investment zones — but also to accelerate future designations.

York County Republican Rep. Stan Saylor is the prime sponsor of House Bill 1962, which would accomplish the latter. The goal is to award additional CRIZ designations ahead of the current schedule.

The first two zones, in Lancaster and Bethlehem, were approved at the end of last year. The next round of applications from eligible cities, including York, can be received beginning in 2016 to win up to two more zones.

Bob Pullo, chairman of the York City CRIZ Authority, which was set up in connection with the city’s first application last year, is optimistic either way. The authority has been meeting regularly to refine its future submission, while continuing to meet with developers and business leaders on potential projects.

“When the whole budget vote gets taken, we don’t know if this will be in or out,” Pullo said, referring to negotiations over the 2014-15 state budget. The new fiscal year begins July 1. “If that doesn’t happen, we have a lot of breathing room between now and the next application. We are working and networking to be prepared and be better than shovel ready.”

Under the state law, CRIZ cities are allowed to create an authority to issue bonds for projects. Those bonds are repaid using most state and local taxes generated within the zone. Developers must supply at least 20 percent of the development costs.

“I remain very confident we can still get the CRIZ legislation,” said York County Democratic Rep. Kevin Schreiber, who is a co-sponsor of Saylor’s bill.

If not, the authority is teed up and ready to execute, plus there are projects in the pipeline and others already underway, he said. The latter includes a cinema in the Northwest Triangle, a former industrial hub along the Codorus Creek.

“There is no bad momentum here,” Schreiber said. “Some projects are proceeding without the CRIZ. Statewide attention to these (CRIZ) cities through the process raised some awareness. It may bring more conceptual projects to fruition.”

Of course, a CRIZ designation would accelerate plans a bit faster, he added.

“Any proposed CRIZ legislation will be a part of the larger budget discussion, because we have to take into account the commonwealth’s current fiscal position,” said Steve Kratz, a spokesman for the state Department of Community and Economic Development, which is partially responsible for administration of the program.

 

Investing without CRIZ

Bill Hynes, CEO and founder of York-based Think Loud Development LLC, said it’s business as usual in the city. Investors who have been on the fence about York projects are still there and will continue to wait and see.

But Think Loud, which includes members of the band Live, is moving forward. It has purchased about 60 properties over the last year to expand its reach and rebuild the community.

“When we build our data center and finish our corporate headquarters, that’s over 175 jobs in York,” Hynes said. “We encourage our employees to live, work and play in York.”

Through United Fiber & Data, Think Loud is also investing in regional data centers in Reading and Allentown, along with related commercial buildings in the latter.

The CRIZ would likely increase the company’s reach in York, because it would free up funds for additional reinvestment, Hynes said.

These incentive programs are not corporate welfare, he added: “It reverses economic inequality in these areas.”

York has the potential to be a major technology hub in the coming years, Hynes said. The York data center project should be completed by the first quarter of next year.

 

Concerns

While the CRIZ has a lot of positives, there are a few concerns, Schreiber said, citing conversations he’s had with officials in Allentown, which has a Neighborhood Improvement Zone, or NIZ. The CRIZ was modeled after the NIZ.

Increased demand in the investment zone could put pressure on staff resources within the city, he said: “I think one of the challenges we may find is a whole new wave of increased responsibility and workload. We have got to be able to keep up.”

The other concern is perception that the CRIZ would not benefit other parts of the city, Schreiber said. However, the legislation allows parcels to be pulled in and out of the zone if others are not getting traction.

“The legislation allows the boundaries to be fuzzy,” he said. “It’s 130 cumulative acres. It’s non-contiguous, so you can spot select. That helps counter concerns.”

Loans could also be structured in a way that includes a small administrative fee that goes back to the city for investment outside the designated zone, he said: “You extend the boundaries, and (city) investment keeps occurring.” <

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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