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Lancaster's CRIZ picture slowly develops with potential projects

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Eleven months after Lancaster landed a City Revitalization and Improvement Zone designation, the program's local landscape hasn't changed much.

As part of a complex financing deal brokered this summer, the Lancaster CRIZ Authority agreed to spend $5 million for Lancaster County Convention Center furniture, fixtures and equipment over seven years.

The only CRIZ application filed so far has been granted.

One project is probably moving outside the CRIZ zone.

And — beyond the significant administrative work that the CRIZ Authority has taken to establish the nearly 130-acre zone — that's about it.

A slow ramp-up is to be expected, according to Randy Patterson, the city's director of economic development and community revitalization. Beyond the fact that the prospective projects are generally large ones that require much preparation, the CRIZ structure makes careful evaluation a necessity.

The program, signed into law late last year, is intended to leverage anticipated taxes from development into millions in capital for that development.

“There's a tendency to compare the CRIZ to the NIZ (Neighborhood Improvement Zone) in Allentown,” says Patterson, but they are markedly different programs.

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A key distinction, Patterson says, is that a CRIZ has a state-mandated baseline and a NIZ doesn't. So, while Allentown can offer businesses an incentive to move into the NIZ, a CRIZ boost can be based only on what was added because of the move or, in the case of a business already within the zone, because of a CRIZ project.

The exception would be businesses that would move into a CRIZ from out of state; because they previously paid no Pennsylvania taxes, the whole operation would count as an increase to the baseline. That kind of situation would be a good fit for a CRIZ, says Patterson.

So is The Hotel Lancaster, which is the only project awarded a CRIZ boost so far.

It's a property that was not generating any revenue in 2013 until the very end of the year,” Patterson says of the hotel, which developer John Meeder and three partners leased and began operating then. In January, Meeder said 66 of the hotel's 221 rooms were open; now the number's up to 134, and the CRIZ boost will help complete the first phase of the project, which centers on opening the rest and acquiring the hotel building.

Moving out

The other action on the roster of potential CRIZ projects is an aquatic and wellness center planned for Burle Business Park since at least 2011 that may now be headed outside the CRIZ to East Hempfield Township.

Andrew Stern, the township's director of planning and development, says nothing has been submitted yet, but the tract in question is at the northeast corner of Old State Road and Harrisburg Pike. That's just off Route 283, one exit past the Spooky Nook Sports complex.

“While we wanted this facility to be a part of the Lancaster city proper, the last-minute change to a prevailing wage rate project was a significant issue for the project,” says Edwin “Ted” Wallover, president of Wallover Architects Inc.

The CRIZ initially was not supposed to trigger a prevailing wage requirement, he says, and situating in East Hempfield Township will let the center be a private venture as originally intended.

Wallover says that all aspects of the project will be enhanced by the move. No further details were available, but as of January the center was listed on the CRIZ prospectus as a 159,000-square-foot, $43.1 million facility with eight tenants ranging from retail to higher education.

Looking ahead

Patterson says there are no significant changes to report on the other five projects listed on the CRIZ first-phase prospectus. They are an entertainment center adjacent to The Hotel Lancaster; turning the Bulova building into retail and office space; transforming the Kepple building into office and residential units; expanding two existing businesses in Conestoga Plaza and adding space for more; and developing air rights above the Red Rose Transit Authority garage for a possible mixed-use project.

Patterson isn't surprised that there haven't been more applications; there's a fee, so although developers are presenting their projects to the CRIZ Authority, actual applications will wait until everything is ready to go. He thinks they will come and the projects will progress in time. 

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