Feb. 23—Mayor Eddie Moran's administration is hoping to attract high paying jobs by reauthorizing the economic opportunity zones in the middle of the city for another five years.
Community Development Director Jamal Abodalo presented the plan to City Council at its committee of the whole meeting Monday night.
"It's a tool that is used to bring in business and investments into low-income communities," Abodalo said.
An opportunity zone must be located in an area with high poverty or unemployment rates, Abodalo said.
The five zones in the city are U.S. Census tracts 1, 4, 9, 13 and 25 or mostly the land between Second Street and the Norfolk Southern railroad and from the city's northern limit to the river.
If a business comes into the city and builds in the opportunity zone, the federal government allows the business to defer or eliminate its capital gains taxes, Abodalo said.
West Reading, and Muhlenberg and Bern townships also would be applying for an opportunity zone, Abodalo said.
The Greater Reading Chamber of Commerce would oversee and manage the zones to ensure they were developed.
What is advantageous for the city is a large portion of the opportunity zones are in areas zoned for manufacturing and commercial.
"It is an investment tool to create jobs, decrease unemployment in that area and hopefully we can create higher paying jobs that would increase the median income in the city itself," Abodalo said.
Councilwoman Donna Reed was concerned the city might not see the same type of development as elsewhere in the county.
"It has been my experience that the impetus has gone to green field development and not brownfields," Reed said. "I'm concerned it will continue to go to greenfields instead of the city."
Abodalo assured her the city would do what it could to attract business.
"This administration is working very closely with several investors and several developers," Abodalo said.
The city is also hoping to structure any development in the opportunity zones for long-term investment.
"Hopefully, we can structure deals that if you are going to come in and take advantage of the opportunity zone you need to stay here for at least 10 years," he said. "We don't want them to take advantage of it for five years and then go somewhere else."
The city is also asking developers in advance what type of jobs and pay scales they would be bringing, Abodalo said.
Council President Jeffrey S. Waltman Sr. was concerned if there was a local tax impact by the tax deferrals.
"It only relates to the federal recording of capital gains," Abodalo said. "It does not have any state, local or county impact. The state will get their taxes as well as the school district and city."
Council was expected to vote on the resolution authorizing the continuation of the opportunity zones, but it was pulled from the agenda.
City Solicitor Elizabeth Kraft asked that a map be attached to the resolution that clearly marks the opportunity zones.
Council will vote on the resolution at its March 8 meeting.