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Bethlehem wants a CRIZ for economic development

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Oct 16 2013 03:55:29 PM CDT
Updated On: Oct 16 2013 05:09:50 PM CDT
Martin Tower

Martin Tower

BETHLEHEM, Pa. -

Bethlehem will be competing with nine other Pennsylvania cities to win the right to create a CRIZ - City Revitalization and Improvement Zone.

The state will pick only two third-class cities to participate in its new CRIZ program, which was created by Pennsylvania's legislature and is modeled after Allentown's NIZ -- Neighborhood Improvement Zone --  program, which is redeveloping the heart of that city.

"I'm very confident we have very good projects and will put together a very compelling application," said Bethlehem Mayor John Callahan.

Callahan said Bethlehem will apply to the state to participate in the CRIZ program in November and expects to hear if it will be included before the end of the year.

The mayor said the city's landmark Martin Tower, former headquarters of Bethlehem Steel, will be among the properties that will be included in a CRIZ, as will other former Bethlehem Steel properties in the city.

He explained a CRIZ can include a total of 130 acres, but not all the same place.

The mayor said Martin Tower, a long-vacant building on more than 50 acres, contains asbestos and lacks a sprinkler system. It is the tallest building in the Lehigh Valley.

On Tuesday night, Bethlehem City Council was told CRIZ  will be "a significant incentive to accelerate economic development in Bethlehem."

Callahan said Pennsylvania has nine third-class cities, those with populations of at least 30,000 residents.

In such state-designated zones, personal income taxes, sales taxes and other state taxes generated by new businesses created by CRIZ will stay within a city for 30 years, rather than going to Harrisburg.

A Bethlehem CRIZ authority must be created to issue debt to pay for designated CRIZ economic development and redevelopment projects, then administer income from the deferred tax dollars to pay back that debt.

The state's CRIZ program is similar to the Allentown's NIZ, but the financial benefits to developers are not as generous.

Callahan explained tax money from existing businesses within a designated zone cannot be used to finance CRIZ projects, nor can state tax money be deferred from existing Pennsylvania businesses that move into a CRIZ -- unless they expand.

At its Nov. 6 meeting, Bethlehem's City Council intends to hold a public hearing on forming the  authority that will administer the CRIZ financing. The city's administration will be forwarding names of people to serve on that authority to council before that meeting.