By Property Tycoon ? on March 7, 2012
Franklin County commissioners unofficially endorsed renewing a tax break for commercial property owners who improve their properties in Chambersburg.
Paul Cullinane, economic development specialist with the Borough of Chambersburg, hosted on Tuesday the first of three public hearings on the Local Economic Revitalization Tax Assistance Program.
LERTA has seen limited participation, especially in the past five years.
About a dozen property owners have participated in the real estate tax incentive since 1997, when the county, borough and Chambersburg Area School District adopted LERTA.
In the past five years, just two property owners have sought tax abatements through LERTA:
- One owner?s improvements costing $150,000 did not
qualify for tax abatements.
- MJ Squared Properties renovated two buildings on North Main Street at King Street. The company invested $475,000 that resulted in an increased assessment of $25,000 of the mixed-use buildings, according to Cullinane. The three taxing authorities meanwhile abated $60,000 in real estate taxes over three years.
?Those two buildings were in horrible shape,? Cullinane said. ?They?ve breathed new life in them.?
Cullinane said he could not give an example of a project that was started because of LERTA. The tax abatement program is among many tools for encouraging economic development in Chambersburg.
The LERTA zone includes most of the borough ? downtown, the Elm Street territory and surrounding area. A
commercial property owner making a taxable improvement would not pay real estate taxes on the value of the improvement for three years. The property can be an apartment building, a commercial structure or new commercial construction.
Cullinane is asking the three taxing authorities to extend the LERTA application period for another five years, to April 2017.
?Foregoing taxes is, in effect, investing in the future so our building stock improves and our tax base is elevated to where it should
be,? Cullinane said. ?There?s a sort of ripple effect there as these improvements take place. This is a very small price to pay. Down the road, the county is made better.?
Three residents spoke during the public hearing on Tuesday. Two asked questions.
Greencastle activist Sheri Morgan said that it may be unwise giving tax incentives to businesses at a time when the state and county governments are unable to pay for services people need.
?I?m not against development,? Morgan said. ?At what point do we give too many incentives to business? We don?t have the revenue to meet expenses. We should have a courthouse. We should raise taxes; there I?ve said it. I think there needs to be a balance. At what point does this not make sense? If
a business wants to take the risk, they should take 100 percent of the risk.?
Commissioner Robert Ziobrowski said that a business gets $1 of services for every $7 it pays in real estate taxes. A resident gets $1.10 of services for every $1 in property tax he or she pays.
?I have no problem supporting business because they pay off tremendously,? Ziobrowski said. ?Economic incentives for industrial development is just good policy. That LERTA is a catalyst for change is very important, especially with the tax environment we?re in.?
The heyday for LERTA was 2000 to 2005, when seven properties invested nearly $10 million in downtown Chambersburg.
?No one is going to invest $9.8 million just to have $89,000 in tax abatements,?
Commissioner Robert Thomas said. ?It may be part of making (a project) more viable, more do-able. FM (Bank) is an anchor, or Cafe D?italia. (LERTA) was a small piece. That?s worth it.?
LERTA motivates developers to do a project sooner rather than later, according to Cullinane.
Cullinane hosts LERTA hearings at a Chambersburg Borough Council meeting on Monday and at the school district on March 21.
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Jim Hook can be reached at 262-4759 and jhook@publicopinionnews.com.
Vacant seat on committee
Six of seven seats have been filled on the Blighted Property Review Committee.
Franklin County commissioners on Tuesday appointed Commissioner Robert Ziobrowski, chairman of the county planning commission John
Benhart, Franklin County Redevelopment Authority member Gregory Thompson, Pam Anderson of Chambersburg, Paul Schemel of Greencastle and Paul Gunder of Waynesboro to the committee. A seat from the Mercersburg area will be filled later.
The committee will meet as needed to determine whether properties meet the state?s criteria for ?blighted? and are eligible for razing and redevelopment. Municipalities will nominate properties for the ?blighted? designation to the redevelopment authority.
The Cumberland County Redevelopment Authority has designated just 5 percent of nominees to its blighted list.
The Franklin County Redevelopment Authority was formed in September 2010 to revitalize downtowns, small villages, run-down neighborhoods and older industrial areas.
Ziobrowski said he will resign from his seat on the redevelopment authority because he considers the two assignments to be in conflict. The Blighted Property Review Committee serves as a check and balance on the authority actions.
Commissioners are unlikely to fill the vacant slot with another commissioner, he said.
Article source: http://www.publicopiniononline.com/ci_20115224/5-more-years-sought-tax-breaks-improving-chambersburg?source=most_viewed
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