State budget passage paves way for Erie's pursuit of CRIZ to spur economic development

Pennsylvania’s new $47.6 billion budget for 2024-25 is poised to jump-start the city of Erie’s stalled effort to secure a statewide designation that allows certain tax revenues generated by businesses to be used to fund development.

That’s the message conveyed by Erie Mayor Joe Schember, State Sen. Dan Laughlin of Millcreek Township, R-49th Dist., and a host of other local officials who gathered in Perry Square Monday morning to talk about the city’s plan to apply for the state’s City Revitalization & Improvement Zone program.

Local officials believe a CRIZ could generate millions of dollars annually for development in the city.

Harrisburg lawmakers and Gov. Josh Shapiro on Thursday night agreed on a statewide spending plan that amends the state’s tax code to open up the CRIZ application process for Erie, Reading and several other Pennsylvania cities.

A state-designated CRIZ allows certain state and local tax revenues generated by businesses to be used to finance various development projects. CRIZ designations currently must be approved by the Pennsylvania Department of Economic and Community Development.

“While it’s not a done deal yet, this was a giant step forward for our community,” Laughlin told the crowd of about 100 people at Monday’s news conference.

When might Erie's CRIZ board get to work?

The state budget move clears the way for the city’s nine-member City of Erie Revitalization and Improvement Zone Authority, created in November 2023, to begin formal meetings that will likely focus on crafting the city’s CRIZ application.

Renee Lamis, Schember’s chief of staff, said the city’s CRIZ application could be submitted to DCED as soon as November.

Erie’s CRIZ authority has been on hold for months — with its members unable to hold a formal meeting, adopt bylaws or conduct any business — because a moratorium on new CRIZ areas was put in place several years ago by former Gov. Tom Wolf, who left office in January 2023.

That meant the state would not designate new revitalization zones as part of the program without action by Shapiro and/or the state Legislature.

Last week’s state budget passage effectively lifts that moratorium. Lamis said Erie’s CRIZ board would probably start meeting in August.

Schember called CRIZ “a valuable economic tool,” and he added that state lawmakers’ commitment to reopening the application process “represents an enormous opportunity right now for the city of Erie.”

Both Schember and Laughlin have long sought a CRIZ designation for Erie.

Revenues for development

Schember said CRIZ could bring millions of dollars in “sustainable funding” to Erie each year for community development.

An exact estimate on how much money a CRIZ could bring in annually for development has yet to be determined.

But city officials have said that Erie Insurance, the Fortune 500 company located in downtown Erie, could alone generate as much as $10 million annually for the CRIZ.

Tim NeCastro, Erie Insurance’s CEO, said Monday that the city has “Erie Insurance’s commitment that we’re going to work diligently with the city to get this application across the finish line.”

Local officials have said the city still needs to determine how many businesses will participate in the CRIZ before coming up with a more exact yearly revenue estimate.

Taxes that can help fund a CRIZ include corporate net income tax and certain other business taxes; Sales, use and state hotel occupancy taxes; employer withholding of employee personal income taxes; taxes on alcoholic beverages; local services taxes; and employee earned income taxes.

CRIZ authorities can also borrow money and issue bonds to assist development. Businesses located within a CRIZ can receive a portion of their CRIZ taxes back for a qualified development/improvement project.

Businesses in a CRIZ zone choose whether or not to participate in the program.

A potential 'huge win for Erie'

Erie’s CRIZ authority was launched following  years of study and debate. The authority would oversee a roughly 130-acre, non-contiguous CRIZ zone in the city of Erie that would include a number of areas targeted for revitalization.

The CRIZ zone includes, but is not be limited to, the 12th Street industrial corridor and the vacant EMI complex near West 12th and Cherry Streets; portions of Erie’s bayfront and downtown; sections of Parade Street, and areas along Erie’s east and west bayfront.

The city’s CRIZ authority includes

• Emily Aloiz, a transportation planning administrator for Erie County government;

• Tony DaBreo, vice president and regional officer of sales for the northeast region of Erie Insurance;

• Daria Devlin, director of social impact at Hamot Health Foundation, executive director of the Erie Center for Arts and Technology and Erie School Board president;

• Matthew Good, CEO of Housing and Neighborhood Development Service;

• Roger Richards, local attorney and businessman;

• Matthew Wachter, local tax attorney;

• Cathryn Easterling, finance/business professional;

• Philip Thomas, finance/business professional; and

• Katrina Vincent, assistant vice president and business banker at Marquette Savings Bank.

Devlin, who attended Monday’s news conference, said of the state budget development: ”Obviously we know we have to apply. But if the application is successful? Huge win for Erie. I’m very excited to be a part of it."

Lancaster previously secured a CRIZ designation from the state for community revitalization. Allentown has a similar state-designated program called a Neighborhood Improvement Zone.

Contact Kevin Flowers at [email protected]. Follow him on X at @ETNflowers.

This article originally appeared on Erie Times-News: State budget passage gives Erie green light to apply for CRIZ