{"id":23665,"date":"2025-11-03T21:36:19","date_gmt":"2025-11-03T21:36:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/23665\/"},"modified":"2025-11-03T21:36:19","modified_gmt":"2025-11-03T21:36:19","slug":"why-erie-and-readings-special-redevelopment-districts-are-getting-off-to-such-different-starts-3","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/23665\/","title":{"rendered":"Why Erie and Reading\u2019s special redevelopment districts are getting off to such different starts"},"content":{"rendered":"

This story was produced by\u00a0the Berks County Bureau of Spotlight PA<\/a>, an independent, nonpartisan newsroom. Sign up for Good Day, Berks, a daily dose of essential local stories at\u00a0spotlightpa.org\/newsletters\/gooddayberks<\/a>.<\/p>\n

READING \u2014 The state recently announced two critical numbers in Erie and Reading\u2019s journeys to get their special development zones off the ground.<\/p>\n

Each has already picked 130 acres to include in a City Revitalization and Improvement Zone (known as a CRIZ<\/a>), where certain types of local and state tax dollars will be returned for investment in special projects.<\/p>\n

The next step was for the state to determine the baseline amount of applicable state taxes already collected in the zones. This is a critical baseline used to calculate how much money goes back into the CRIZ zones \u2014 up to $15 million annually.<\/p>\n

Despite being roughly the same size in population, the disparity was significant: Erie\u2019s baseline is $32 million, while Reading\u2019s is $3.5 million.<\/p>\n

Peter Rye, chair of Reading\u2019s CRIZ Authority Board, told Spotlight PA that while the difference is \u201cstark,\u201d it is not unexpected.<\/p>\n

Erie built its CRIZ around Erie Insurance, a Fortune 500 company, and a targeted provision tucked into a recent budget deal that allows it to include\u00a0\u201cinsurance premiums tax\u201d<\/a>\u00a0in its baseline.<\/p>\n

Officials connected to the project have\u00a0predicted<\/a>\u00a0that it will almost hit the cap in the first year.<\/p>\n

Reading officials, meanwhile, have been upfront that it may take a few years before the program begins bringing in anywhere near that amount of money.<\/p>\n

That is because they do not have a company like Erie Insurance located within the CRIZ. Instead, Reading\u2019s zone is a mixture of small businesses in the downtown area and the vacant Glidden and Dana factory sites.<\/p>\n

The success of the CRIZ depends on its ability to increase applicable tax revenue in the district, as that new revenue will return to the authority to distribute for development projects. But businesses also must bring in enough tax revenue above the baseline to deposit into the fund. New businesses in the areas will inherently add to the eligible amount of tax revenue because they were not part of the baseline calculation.<\/p>\n

The\u00a0Shuman Development Group<\/a>\u00a0is in talks to open a shopping center on the south side of the\u00a0Glidden property<\/a>, and the site plan is currently before the city\u2019s Planning Commission.<\/p>\n

\u201cOnce activity begins on those sites, it\u2019s all upside,\u201d Rye said.<\/p>\n

Until the CRIZ fund is able to sustain itself, Rye said the CRIZ Authority may choose to issue bonds or take on loans. Erie is considering\u00a0issuing a bond<\/a>\u00a0in 2026, as well.<\/p>\n

At a CRIZ Authority Board meeting on Oct. 23, Rye said there was strong interest from private businesses in collaborating by potentially providing loans or grants. He has also spoken with the city about short-term funding.<\/p>\n

They may be able to offer upfront financing in the future, he told Spotlight PA, but initial awards likely will be to help businesses with later costs, such as loan repayments.<\/p>\n

He offered the example of a Reading business that wants to expand by remodeling its existing building. If the business meets the requirements and wins a CRIZ award, the owners will initially finance the work themselves and receive the repayment assistance later in the project.<\/p>\n

David Barr, the city\u2019s community development director, said most developers are planning out projects multiple years in advance, so CRIZ funding will still be helpful.<\/p>\n

\u201cIt\u2019s that first five-year period where you\u2019re kind of like, OK, cobbling together resources to keep this going until the momentum builds,\u201d Barr said.<\/p>\n

The state requires all existing businesses physically within the CRIZ to annually file an extra tax form to help determine both the baseline, and how much money will be returned to the city. In 2024, approximately\u00a060% of businesses<\/a>\u00a0filed the state form in Reading. The remaining will receive a $1,000 fine from the state for a late or missed form, Department of Revenue Communications Director Jeffrey Johnson told Spotlight PA. The state keeps the fines.<\/p>\n

Barr said he was pleased with the initial number of participating businesses and anticipated that participation rates would rise as businesses realized how the CRIZ could help them in the future.<\/p>\n

Three other cities (Lancaster<\/a>,\u00a0Bethlehem<\/a>, and\u00a0Tamaqua<\/a>) have been building their CRIZ programs over the past 10 years. Each city had its own strategy when starting the program: Lancaster featured the convention center as the center of its project and started with a baseline of more than $12 million. The city has managed to double that baseline and will receive just over $12 million this year for its current projects.<\/p>\n

Bethlehem and Tamaqua, however, started with more humble baselines of around $121,000 and $2 million, respectively. This year, they each will receive approximately $2 million.<\/p>\n

The Reading CRIZ Authority expects state feedback on its project guidelines by the end of October. Those guidelines will outline what projects are eligible for financial incentives within the CRIZ \u2014 and what those incentives can be.<\/p>\n

If the guidelines are largely unchanged, Rye hopes businesses will be able to apply for financial project assistance as soon as November.<\/p>\n

\u201cThere\u2019s a lot of community interest, quite frankly, community pressure, for us to get going,\u201d Rye said. \u201cApplicants are contacting the city. They want to submit.\u201d<\/p>\n

Barr expected the city would host events at the start of the new year to help businesses understand the application process.<\/p>\n

\u201cThis is an important step, but it\u2019s a procedure,\u201d Barr said of determining the baseline. \u201cIt\u2019s an accounting thing. And I don\u2019t want to lose sight of the bigger picture.\u201d<\/p>\n

BEFORE YOU GO\u2026\u00a0If you learned something from this article, pay it forward and contribute to Spotlight PA at\u00a0spotlightpa.org\/donate<\/a>. Spotlight PA is funded by\u00a0foundations and readers like you<\/a>\u00a0who are committed to accountability journalism that gets results.<\/p>\n

Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n

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