Improvement Zone Challenges for the City Unequal economic playing - - PowerPoint PPT Presentation

Lancaster City Revitalization and Improvement Zone

• Challenges for the City

– Unequal economic playing field between developing greenfields in the suburbs (or areas of the county in closer proximity to major highways)

• vs. the City

– High construction costs relative to realistic rental potential or value based on the City’s market – High asking prices for existing underutilized buildings or vacant land – Primarily built environment

• Need to “grow up” because we can’t grow out

• Things to consider

– Eligible tax revenue for existing businesses is only the incremental increase over the baseline – Businesses must either be entirely new creations or relocations from outside the Commonwealth to receive 100% of the tax revenue stream created by the business – Baseline revenues are adjusted annually – You only get to keep the tax revenue required to pay annual debt service, revenue cannot be bankrolled – The CRIZ acreage can be adjusted by removing existing acreage to include new acreage for pending projects

• Lancaster’s Approach to CRIZ Development

– Our focus will be on

• infill development on vacant and underutilized sites
• the redevelopment of existing sites within the City

which have major barriers to development, whether site or cost related

• new construction on sites that provide the best
• pportunity for success
• building the real estate market with a focus on

professional office and commercial developments, including those which provide a mixed use of office, retail space and market rate residential.

• Program administration

– The City has created a separate CRIZ Authority to administer the program rather than using an existing Authority

• 11 members (two non-voting)
• City staff currently staffing Authority

– The CRIZ Authority will consider the following financing options for projects:

• issue bonds to provide project financing
• act as a pass through of state revenue to a project
• serve as the Borrower on behalf of project
• serve as a conduit bond issuer

• CRIZ District Characteristics

– 129.69 acres – 5 separate geographic areas – Approximately 1,000 business entities in the CRIZ – Significant number of “Mom & Pop” businesses – No Business licensing program – No Business Privilege Tax

• Eligible Taxes That Generate CRIZ Revenue

– Corporate Net Income tax (apportioned) – Capital Stock and Franchise Tax (apportioned) – Bank Shares Tax (apportioned) – Sales and Use Tax (related to activity in the CRIZ) – Personal Income Tax (for work performed in CRIZ) – Tax on sales of liquor, wine, malt and brewed beverages in the CRIZ (tax paid to the LCB by businesses) – Local Services Tax (for work performed in CRIZ) – Local Earned Income Tax (for work performed in CRIZ by City residents)

• The initial projects that are being considered

include:

• Lancaster Square (east side) including the Hotel

Lancaster and Annex property, the Bulova Building, and the public plaza area

• RRTA Air Rights above the Garage on North Queen and

East Chestnut

• Kepple Building in the 300 block of North Queen
• Convention Center FF&E
• Conestoga Plaza Commercial Project
• Aquatic Center at Burle Business Park

• Hotel Lancaster

– 140,000 sq. ft. facility – 225 rooms – 5,000 sq. ft. street level commercial space – $15.8 million renovation

• Lancaster Annex

– Annex area will be redeveloped as a family entertainment complex – Multiple uses including restaurant and sports theater, bowling, live performance theater, game room and several smaller gathering space – Approx. $10.5 million renovation/expansion

• The Bulova Building

– 220,000 sq. ft. facility – Former Hess’s store that closed in mid 1970’s – Became a light industrial building with multiple tenants

• Potential $30 million

redevelopment project

– Multiple tenants on upper floors and retail uses on ground floor

• RRTA Air Rights

– Multi-modal Transportation Center – 395 space public parking garage – Restaurant on 1st floor

• Air Rights

– Original construction of garage allows for a 220 foot tall addition – 3 stories over entire garage – 7 stories above the N. Queen Street elevation front 125 foot wide footprint

• The Kepple Building

– Former candy factory – Located in the middle of a vibrant and eclectic block of retail and restaurants – $7.7 million project

• New Uses

– Approx. 35 market rate apartments – 15-18,000 of commercial space, both retail and

• ffice

• Conestoga Plaza

– Former brownfield site – Approx. 27,000 sq. ft. of commercial space – 2 major tenants

• a grocery store and retail

store

– 3rd building will include

• ne or two restaurants

and two retail spaces – $7.0 million project

• The Aquatic Center

– Competition Level Pools – Physical Therapy/Rehab – Education – Wellness – Leisure – Restaurants

• $44 Million Project

– 159,00 Sq. Ft – 9 tenants

• Other Major Opportunities

– Northwest Triangle Opportunities

• Former Dillerville Railyard -17 acre site
• 800 Block of North Prince Street (vacant land and brownfield site

with dilapidated structures)

– 100-200 Blocks of West King Street

• Extend the active Central Business District to the west by two

blocks

– 2 Surface lots occupying 1.5 acres on the Unit blocks of North Prince and West King in the Central Market District

• 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 – Equalize the economic disadvantages of developing in the City vs. the suburbs

• Allow developers to offset lower market rate lease rates

– Job growth and retention of existing jobs by providing Class A and B commercial office space for new businesses, relocating businesses or expanding businesses

• Benefits to the City

– Opportunity to recruit new businesses to the City – Increase job opportunities within the City for City residents through recruitment of businesses that create professional job opportunities – 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 longer term

Contact Information:

Randy S. Patterson, Director Economic Development & Neighborhood Revitalization City of Lancaster 120 North Duke Street P.O. Box 1599 Lancaster, PA 17608-1599 Tel: 717-291-4760 Email: RPatterson@cityoflancasterpa.com Twitter: @RandyEDNR Website: www.cityoflancasterpa.com