LEHIGH VALLEY MORNING CALL: …[PP&L’s] argument is that developers building new class A office space downtown can use the NIZ to redirect many of their tenants’ state and local taxes to cover construction costs, allowing them to offer below-market rents for brand-new, custom-built office space.
Meanwhile, the NIZ does not allow the owners of The Plaza, which was built a decade ago, to apply their tenants’ taxes to cover mortgage costs, making it impossible to compete by lowering it own rents…
“Every economic incentive program or statute whether geographic or project-specific creates some level of advantage,” [Lehigh Valley Economic Development Corp. CEO Don ] Cunningham said. “That is the nature of the program, to incent development in a zone. I’m not a lawyer, but if one is going to argue the NIZ is illegal because it creates an incentive then in essence every economic development program, financing, or geographically based program is also illegal.”… (more)
NEWSLANC EDITOR: Allentown’s NIZ (Neighborhood Improvement Zone) applies future tax revenue from a single project to that project.
Lancaster’s CRIZ (City Revitalization and Improvement Zone) funds multiple projects within a stipulated zone and theoretically repays the loan from enhanced future revenue throughout the zone.
In both cases, the taxpayer likely ends up paying for the grant. It is just more obvious with the earlier NIZ and the later CRIZ. The main difference is the change demonstrates the value of obfuscation.
