A program that supports economic development and business growth in Lancaster city is continuing to see robust revenue.
This fall, state officials announced that Lancaster’s City Revitalization & Investment Zone program, or CRIZ, would receive $12.1 million toward the end of 2024, based on tax receipts generated by CRIZ businesses in 2023.
On Nov. 26, the local board overseeing the CRIZ allocated $6.1 million of that, or just over half. It is scheduled to allocate the remaining $6 million at its meeting on Dec. 17.
Through the CRIZ, business taxes paid by enterprises in a designated zone are returned to a local authority for economic development. Broadly speaking, the authority can distribute the money in two ways: It can return a given business the money it paid in CRIZ-eligible taxes, known as its “increment,” to cover debt service on an agreed investment project; and it can provide grants for eligible purposes directly out of the program’s overall revenue.
Initially, the CRIZ Authority limited participating businesses to receiving no more than 80% of their increment. Because the CRIZ is generating so much revenue, the default amount was upped to 100% last year, said Jeremy Young. He is director of Community & Economic Development at the Lancaster City Alliance and acting managing director of the CRIZ Authority, which the alliance administers on City Hall’s behalf.
Increments and grants
This year, 10 projects are receiving their increment, ranging from the Lancaster Marriott at Penn Square, built by Penn Square Partners on land owned by the Lancaster City Redevelopment Authority ($1.5 million) to the Coffin Bar at 30 W. Lemon St. ($16,767), a project of Spring House Brewing Co.
Grants are going to three other projects. They include the largest single allocation, $2.1 million, which is going to the Lancaster Parking Authority to pay debt service for 2025 on the Christian Street Garage, which was part of the redevelopment of Ewell Plaza.
The CRIZ Authority covers 100% of the garage project’s debt service, Young said. The majority, a little over $1.6 million out of the $2.1 million, was generated by the tenants at 101NQ, the building on Ewell Plaza’s south side. The remainder, about $488,000, is coming from general CRIZ revenues.
The Parking Authority’s project included the two stories of “shell space” below the garage now occupied by the Lancaster Public Library and the one-story retail building just south of the Holiday Inn Lancaster, now occupied by Busy Bodies Play Cafe.
A grant of $627,301 is going to the Lancaster County Redevelopment Authority, the latest in a series of annual allocations to pay for renovations to Clipper Magazine Stadium, which the authority owns.
This year’s installment will cover cost overruns related to the stadium’s roof replacement, installation of safety netting along the stadium’s baselines, replacement of some structural steel components along North Prince Street and kitchen equipment.
Lastly, $101,353 is going to Tenfold to cover preliminary “soft costs” for the upcoming renovation of its 52-room TLC shelter at 105 E. King St.
The CRIZ Authority has pledged up to $2 million for the TLC project by the end of 2028. The authority anticipates making a substantial grant next year, by which time it expects that Tenfold will have secured all of the other funding it needs, Young said.
Tenfold has received American Rescue Plan Act grants for the TLC shelter renovations from both Lancaster city ($1 million) and Lancaster County ($2 million). Publicly stated cost estimates for the project have ranged from a little over $8 million to more than $10 million.
Besides funding third-party projects, the CRIZ Authority made four allocations totaling $330,780, to cover administrative and professional services. Under the CRIZ law, administrative expenses can total no more than 5% of CRIZ revenues.
What’s next
The CRIZ Authority still has just over $6 million available, which it must allocate by the end of the year. Any unused funds revert to the state’s general fund.
The proposed uses are still being finalized, but it’s expected that some funds will go to pending projects, Young said: The CRIZ Authority has OK’d several that now are awaiting state review and approval.
They include a grant of up to $1.6 million over four years for renovations to Lancaster city’s Welcome Center on Penn Square; and one of up to $6.25 million over 10 years to the Lancaster County Convention Center for “Commons on Vine,” the planned conversion of the convention center’s 12,000 square foot Vine Street lobby into an event space.
Funding could also go to the Lancaster City Redevelopment Authority to help pay debt incurred to finance the Lancaster Marriott’s expansion, Young said.
(Editor’s Note: This article has been updated to reflect that it is the Lancaster City Redevelopment Authority that owns the Lancaster Marriott site.)
