Competing ordinances on City Council agenda as Erie pushes for statewide CRIZ designation
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Erie City Council and Mayor Joe Schember’s administration agree that the city should try to secure a statewide designation that allows certain state and local tax revenues generated by businesses to be used to fund development.
But with council poised to take an initial vote Wednesday night regarding the state’s City Revitalization & Improvement Zone program, there is disagreement between City Council and Schember on how appointments to a local nine-member CRIZ board should be made.
There are two first-reading ordinances on City Council’s Wednesday meeting agenda that seek to take the first steps toward creating a new Erie-based CRIZ authority to oversee a roughly 130-acre, non-contiguous CRIZ zone that would include various areas of the city earmarked for revitalization.
More: Erie poised to take another shot at state’s CRIZ program to fuel economic development
The authority would be created following the guidelines of the state’s Municipal Authorities Act.
Both ordinances suggest a nine-member CRIZ board of volunteer appointees.
But one ordinance, crafted by Schember’s administration with input from State Sen. Dan Laughlin, of Millcreek, R-49th Dist., seeks a board where five members are appointed by Laughlin, with the remaining four appointed by Schember.
Further, Laughlin and Schember have proposed nine Erie-area residents for the board.
In an opinion piece submitted to the Times-News, co-authored by Schember and Laughlin, the two urged city leaders to present a unified voice to Harrisburg officials regarding how a CRIZ would operate locally.
Opinion: Schember and Laughlin: Erie must speak with 'one voice' and seek a CRIZ to fund growth
A second CRIZ ordinance, authored by City Council President Chuck Nelson, suggests that Schember appoint three members, with City Council and Laughlin getting two appointments each.
Further, Nelson’s ordinance suggests that two state legislators representing the city of Erie — Rep. Pat Harkins, D-1st Dist., and Rep. Bob Merski, D-2nd Dist. — would each get an appointment to the CRIZ board.
“The ordinance brought forth by City Council has 11 elected officials bringing the broadest pool of talent to get the most qualified group of applicants,” Nelson said.
By contrast, Laughlin and Schember suggest that they make all nine CRIZ authority board appointments, resulting in “a very narrow pool of applicants and a lot of overlap,” Nelson said.
Nelson said his ordinance will be read first at Wednesday’s City Council meeting, and he believes he has support from “five or six” of his colleagues to get it approved.
If City Council signs off on that ordinance, “the second ordinance would probably be pulled (from the agenda) at that point, because of redundancy,” Nelson said.
“And if by some turn of events we get to the point of still reading that ordinance, I don’t believe it has the votes to pass.”
Any ordinance needs to pass two readings before it goes into effect. Council could take a final vote on creating a CRIZ authority as soon as Aug. 2.
Suggested CRIZ appointments
Schember and Laughlin are suggesting the following appointees to the nine-member CRIZ authority board:
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 Erie School Board president;
Matthew Good, CEO of Housing and Neighborhood Development Service;
William McLaughlin, business manager of Laborers Local 603;
Local attorney and businessman Roger Richards;
Katrina Vincent, assistant vice president and business banker at Marquette Savings Bank, and;
Local tax attorney Matthew Wachter.
Renee Lamis, Schember’s chief of staff, said all nine suggested appointees bring specific experiences and skills to help a CRIZ be successful in Erie.
“What’s critical is that we have an efficient, qualified, well-rounded board that’s going to be able to carry out very complex projects that will be carried out under CRIZ,” Lamis said. “That requires a depth and breadth of diverse backgrounds and experiences.”
Nelson said that City Council has identified its two potential board appointees under his proposed ordinance. Both have “impressive resumes,” including one who sits on a statewide advisory board, Nelson said.
However, council is not naming those candidates right now, Nelson said.
“We can appoint them by resolution later,” he said.
How CRIZ works
Erie’s proposed CRIZ zone would include, but 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.
Further, CRIZ authorities can borrow money and issue bonds to help spur development, and businesses located within a CRIZ can receive a portion of their CRIZ taxes back for a qualified development/improvement project.
Lancaster has secured a CRIZ designation for community revitalization. Allentown has a similar state-designated program called a Neighborhood Improvement Zone.
Former Gov. Tom Wolf, who left office in January, placed a moratorium on new CRIZ areas for several years, so the state did not designate new revitalization zones as part of the program.
However, both Lamis and Laughlin have said they expect Gov. Josh Shapiro’s administration to reopen the CRIZ application window later this year.
City officials and Laughlin have both said that Erie needs to be ready with a CRIZ authority when that happens.
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."
In the past, third-class Pennsylvania cities with populations of more than 30,000 have been eligible to establish a CRIZ, as long as those cities are not part of Pennsylvania's Act 47 program for financially distressed municipalities.
Erie and seven other cities qualify: York, Lancaster, Reading, Altoona, Wilkes-Barre, Chester and Bethlehem. Taxes generated by businesses and individuals in the CRIZ zone that may be used for redevelopment include corporate net income taxes, sales taxes and earned income taxes.
Any CRIZ must also include a portion of private financing to complement the tax revenue directed toward a zone, according to state officials.
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.
City Council meets Wednesday at 7:30 p.m. in the Bagnoni Council Chambers at City Hall, 626 State St. The meeting can be viewed on Facebook and YouTube.
Contact Kevin Flowers at kflowers@timesnews.com. Follow him on Twitter at @ETNflowers.
This article originally appeared on Erie Times-News: CRIZ board appointments at issue as Erie seeks statewide designation
