Erie’s new CRIZ authority, aimed at boosting development, is on hold for now. Why?
After years of study and debate, the city of Erie’s newest economic development authority was ready to start conducting official business in late November.
But the nine-member City of Erie Revitalization and Improvement Zone Authority is now indefinitely on hold, in large part because Erie has not yet secured a state-required CRIZ designation.
Renee Lamis, Mayor Joe Schember's chief of staff, said the local CRIZ board's work cannot begin until either Gov. Josh Shapiro lifts a moratorium on new CRIZ designations put in place by former Gov. Tom Wolf, or new legislation pending before the Pennsylvania House of Representatives passes that seeks to officially designate Erie as a CRIZ zone.
The authority plans to focus on development within various areas of the city, following the guidelines of the state's CRIZ program.
A state-designated CRIZ allows certain state and local tax revenues generated by businesses to be used to fund development. CRIZ designations currently must be approved by the Pennsylvania Department of Economic and Community Development.
Erie City Council approved the creation of a new CRIZ authority in mid-August. Both Lamis and State Sen. Dan Laughlin, R-49th Dist., had said publicly that they expected Gov. Josh Shapiro’s administration to reopen the CRIZ application window sometime in 2023, and that is why Erie wanted moved quickly to put a CRIZ authority in place.
Laughlin has publicly lobbied for an Erie-based CRIZ for nearly a decade.
However, the CRIZ moratorium remains in place. The local CRIZ authority postponed its first meeting, which had been set for Nov. 30, and that session has not been rescheduled.
"We kind of got ahead of the process trying to be ready," Lamis said. "But meetings cannot begin until we get a (CRIZ) designation."
State Reps. Patrick Harkins, of Erie,D-1st Dist., and Bob Merski, of Erie, D-2nd Dist., have co-sponsored H.B. 1949, legislation that would create a specific CRIZ designation for Erie. The bill was introduced in December.
Harkins told the Erie Times-News that the state House does not reconvene until March 18, so the legislation won't be debated until then.
"What we're proposing would specifically meet the needs of Erie," Harkins said.
Merski said in a statement that a CRIZ designation for Erie would help Erie continue to make multimillion-dollar strides when it comes to community development.
“I look forward to continuing to work with officials at the state, local, and county levels to set out the goals we all want to see be accomplished,” Merski said.
Laughlin has also introduced a bill in the state Senate that would update the current requirements of the CRIZ program, which he hopes will benefit Erie.
Previous coverage: Erie poised to take another shot at state’s CRIZ program to fuel economic development
Erie's CRIZ plan
The new authority would oversee a roughly 130-acre, non-contiguous CRIZ zone in the city of Erie that would include a number of areas designated for revitalization.
Initially, 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.
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.
Local officials are also interested in making sure the CRIZ aligns with a new investment playbook for the Erie region developed by nationally-known urban policy experts Bruce Katz and Florian Schalliol of New Localism Associates of Arlington, Virginia, unveiled in July 2022.
Katz and Schalliol recommended dozens of local community improvement projects as part of that initiative.
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.
Lancaster previously secured a CRIZ designation from the state for community revitalization. Allentown has a similar state-designated program called a Neighborhood Improvement Zone.
Penny Ickes, communications director for the Pennsylvania Department of Community and Economic Development, told the Erie Times-News in June that DCED "is currently assessing all of the agency’s economic development programs, including the City Revitalization & Improvement Zone. While no final decisions have been made regarding CRIZ, DCED is evaluating all options and is open to further discussions regarding opening up the program."
Erie applied for the initial round of CRIZ in 2013, but the city's application was rejected, in part because the city did not create a new authority to oversee the program's revitalization efforts.
Who is on the Erie CRIZ board?
Initially, the nine volunteer board members are:
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;
Katrina Vincent, assistant vice president and business banker at Marquette Savings Bank.
How much money could an Erie CRIZ bring in for redevelopment?
An exact estimate 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.
Lamis said the city still needs to determine how many businesses will participate in the CRIZ before coming up with a more exact revenue estimate.
Contact Kevin Flowers at kflowers@timesnews.com. Follow him on X at @ETNflowers.
This article originally appeared on Erie Times-News: Why a new CRIZ for Erie is not yet a done deal
