WILKES-BARRE — The state has a new economic development tool with the city’s name on it.
In truth, the City Revitalization and Improvement Zone program applies to seven other third-class cities and Delaware County, the applicant for the city of Chester. The program is included in a tax-reform package signed into law last July by Gov. Tom Corbett.
The program allows the eligible cities to use tax money generated in designated zones to pay down the debt taken on for job creation and economic-development projects.
Drew McLaughlin, Wilkes-Barre’s municipal affairs manager, said the city has been researching the CRIZ program for a while.
“At this stage of the game, we can’t turn a blind eye to any type of economic development mechanism,” McLaughlin said.
The application period for projects began on Friday and runs through the end of the month. The state Department of Economic and Community Development, Department of Revenue and the Office of the Budget will approve two CRIZs until 2016, when the number increases to two approvals annually.
The zone can be up to 130 acres made up of non-contiguous parcels selected by an existing authority or newly created one and include abandoned, vacant or underutilized properties. The program guidelines restrict distressed cities from participating unless the county creates the authority to designate the zone.
The program also allows for a pilot zone of the same 130-acre maximum limit within a borough or township with a minimum population of 7,000 based on the most recent U.S. Census.
The program has attracted quite a bit of attention, said Jay Pagni, a spokesman for the Governor’s Office.
“It’s the most downloaded document since it went live,” Pagni said.
State Sen. John Yudichak, D-Plymouth Township, viewed the program as a way to spark the revival of struggling cities.
“As Northeastern Pennsylvania continues to struggle with chronic high unemployment numbers, the CRIZ program can be an important economic tool for cities, like Wilkes-Barre, to attract new business and create jobs,” Yudichak said.
Of the 15 major labor markets in Pennsylvania, the Scranton/Wilkes-Barre region has had the highest seasonally adjusted unemployment rate for 41 consecutive months, according to the most recent data from the state Department of Labor and Industry.
The rate for the region made up of Lackawanna, Luzerne and Wyoming counties, was 9.2 percent in August. In comparison, the state’s rate was 7.7 percent.
The CRIZ program differs from a more well-known one in the alphabet soup of economic development programs offered by the state.
The Keystone Opportunity Zone program provides tax abatements for a limited time period, but the CRIZ is designed to be revenue neutral, McLaughlin said.
“It’ s not tax forgiveness. It’s a financing mechanism,” he said.
The state and city receive the tax revenues equal to what was generated before the CRIZ designation. Anything above the baseline amounts is dedicated to pay down the debt for projects in the zone within 30 years.
McLaughlin said the city took a similar approach with the $13.7 million Coal Street Park project involving the construction of a recreational complex with a new building housing a ice hockey rink and second-floor office space.
Coal Street Redevelopment Inc. was created to take on the funding and debt for the project. The rental agreements with the Wilkes-Barre/Scranton Penguins hockey team that trains at the rink and GWC Warranty Inc., which has its offices on the second floor, pay down the debt service.
Rather than start from scratch and create a new entity to oversee the zone, McLaughlin said, “the city’s preference would be to use an existing authority.”
The city has had success with “self-financing” projects, he said, adding it is still looking into the CRIZ program.