BELLEFONTE - In order to try to lure more businesses and industry into the county, the Centre County commissioners have unanimously agreed to make two areas virtually tax-free for 10 years.
The designation still has to be approved by the participating school districts and municipalities involved, though officials believe they will be mere formalities.
Commissioners Michael Pipe and Chris Exarchos - Commissioner Steve Dershem was absent - agreed to the Keystone Opportunity Expansion Zone in the Benner Commercial Park in Benner Township, near the county prison, and to a parcel near Philipsburg at the former Philipsburg State Hospital.
Both actions have to be approved by the participating school districts. Officials said the Bellefonte Area School Board passed the designation last week, and they anticipate Benner and Rush townships, and the Philipsburg-Osceola School District to do the same next week.
The designation would alleve any new business or industry moving there of any property taxes for 10 year. However, officials added, the designation would start for all likely on Jan. 1, 2013 and would end Dec. 31, 2022, meaning a business locating there five years after the designation would only have five years of free property taxes.
"This is a very powerful economic development tool and allows us to compete with other states trying to get new businesses into the area," said Tom Kearney, chair of the Centre County Industrial Development Corp.
He noted that about 90 percent of businesses looking for a new location first see if its in a KOEZ or a similar Keystone Opportunity Zone before checking out other features.
"If you don't have this, than 90 percent of the prospects go elsewhere," Kearney said. "This is a great opportunity to bring businesses in to the area and also give local businesses a way to expand.
"At least this gets us into the game and have prospects see what we have to offer."
CCIDC Board member Ted McDowell noted both parcels were virtually tax-free to begin with - the Benner Township property on ground formerly owned by the State Correctional Institution at Rockview and the other parcel by the former Philipsburg State Hospital - and the designation will not mean less taxes to the affected entities.
"There is very little downside to the affected municipalities and school districts," he said."
The designation in Philipsburg is mostly just an expansion of the KOEZ designation for the nearby Mo Valley Industrial Park, County Administrator Tim Boyde said.
Responding to a question from the media that noted state officials recently released a 180-page report that indicates there is no real facts to support KOZ or KOEZ areas bring in more jobs, CCIDC Vice Chairman Rod Beard said programs like these rely on "accurate, reliable" data collection and any "sloppy" or "lackadaisical" record keeping needs to be rectified.
Exarchos has previously relayed some concerns with such tax-free designations, but he said Tuesday, "we've got to do something."
"A lot of businesses have decided to locate in surrounding counties," he said. "Is it perfect? No. it's a tool. Until you try it, you don't know. We've got to try something.
"It's an investment in our future," Exarchos continued. "Not everyone can work at Penn State. We need good, family-sustaining jobs."
Exarchos added the designations will likely only mean a loss of between $10,000 and $15,000 to the county.
Once formally in place, the CCIDC will market those areas, along with the Governors Action Team, to businesses both locally and nationally, Kearney said.