Bethlehem and Lancaster Win CRIZ Districts

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It’s a Crizzmas miracle, y’all! (John Callahan’s joke, not mine.) Bethlehem and Lancaster have been selected to keep more of their own taxes to finance infill development. It’s a big win for Bethlehem in particular because they’re right next to Allentown, and people were worried that the Allentown Neighborhood Improvement Zone (NIZ) would diminish interest in redeveloping Bethlehem’s brownfields.

I’m a big fan of the one-of-a-kind NIZ district Allentown politicians snuck into the 2009 PA Code, which has succeeded in spurring lots of urban infill development in its downtown, but I am less enthusiastic about the CRIZ that was modeled on it.

The slush fund nature of the NIZ, where a new Authority gets all the state and local taxes collected in a contiguous area except local property taxes, with few strings attached, seems to have worked strongly in Allentown’s favor. To a large extent, Allentown may have just lucked out with a developer who’s committed to good urbanism, but good ideas combined with a massive slush fund turned out to be a great combo, even as the process obsessives are having kidney stones over it.

The CRIZ is considerably weaker, but still a big win for cities. I think we should extend this deal to all the Cities of the Third Class now, before they all end up in Act 47. That’s not how state opted to do it though, and two large (over 50K) third class cities per year will be selected to keep some more state taxes instead of pissing them away into the vasty emptiness.

I have a number of problems with Bethlehem’s list of projects (contiguousness is paramount!), and haven’t paid much attention to Lancaster’s, but good for them. I hope the new Bethlehem Council members will revisit the list and make some better choices, or at least make the Martin Tower redevelopment plan contingent on more comprehensive redevelopment of the parking lots and other land parcels around it.

Allentown turned the money firehose on the most walkable areas of town, not on white elephant projects, and that’s a key reason why it’s been successful. People worried the new buildings would stay empty, but they were wrong, and J.B. Reilly’s already leased all of his planned space to business tenants.

This entry was posted in Economic Development, Land Use.

2 Responses to Bethlehem and Lancaster Win CRIZ Districts

  1. Gdub says:

    Slush funds are good?

    Its going to be hard to measure the upside/downside of the NIZ for several years, so I’m not sure what lessons are being drawn on here to create the CRIZ. I’m personally more interested in the NIZs ability to draw higher-income residents to downtown or the city as a whole, as well as increase all types of tax revenues–not just property. Renting some buildings out to companies that (in one example) are being paid out of the “slush fund” to lend money won’t meet the expense. Good urban restaurants and service businesses don’t stay open serving weekday lunch crowds.

    Given that Bethlehem has continued to draw development business despite the NIZ, I wonder what that means for the concept in general.

    • Jon Geeting says:

      Geoff I think the lesson is that the quality of project ideas is what matters, not the process. I’m about doing what works. I’ve seen horrible projects get passed out of a transparent process, and good projects get passed out of this slush fund, and vice versa. The bottom line is that there’s no substitute for good ideas.

      We won’t know the full impact of the NIZ for many years, it’s true, but I recall my commenters telling me last year that these buildings would all be empty except for Reilly and Topper cronies and that is just not how it’s worked out at all. Every building planned for construction by City Center is already fully leased. That’s way more businesses than even a very large crony network could pull off. It also has failed to devalue suburban areas like people were wringing their hands about. So far everything has gone down pretty much exactly as I said it would.