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Lancaster City Revitalization and Improvement Zone Program 101

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City Revitalization and Improvement Zone (CRIZ) guidelines to how the program is planned to operate.

TRANSCRIPT

Page 1: CRIZ 101

Lancaster City Revitalization and Improvement Zone Program

101

Page 2: CRIZ 101
Page 3: CRIZ 101
Page 4: CRIZ 101

• 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.

Page 5: CRIZ 101

• 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

Page 6: CRIZ 101

• 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

Page 7: CRIZ 101

• 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

Page 8: CRIZ 101

• 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

Page 9: CRIZ 101

• 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

Page 10: CRIZ 101

– 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)

Page 11: CRIZ 101

• 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

Page 12: CRIZ 101

• 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.

Page 13: CRIZ 101

• 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

Page 14: CRIZ 101

• 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)

Page 15: CRIZ 101

• 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

Page 16: CRIZ 101

• 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

Page 17: CRIZ 101

• 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

Page 18: CRIZ 101

• 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

Page 19: CRIZ 101

• 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

Page 20: CRIZ 101

• 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