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 opportunity 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 1 st 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 office
• Conestoga Plaza – Former brownfield site – Approx. 27,000 sq. ft. of commercial space – 2 major tenants • a grocery store and retail store – 3 rd building will include one 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
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