State College, PA - Centre County - Central Pennsylvania - Home of Penn State University

SC looking to adopt program to develop, revitalize

by on April 25, 2019 9:10 AM

STATE COLLEGE — As State College continues to grow upward, with cranes building new high rises for student housing, the borough is looking to preserve the historic nature of the town while also encouraging commercial growth.

A potential new downtown zoning district that looks to encourage development and revitalization of historic properties downtown will soon be up for public hearing. In the district, 27 buildings on 25 parcels would be eligible for the Local Economic Revitalization Tax Assistance project. LERTA is a program created by the Commonwealth of Pennsylvania in the 1970s to provide tax exemption on construction improvements for aging or deteriorating properties. This would be the first time the borough would use the program.

“The purpose is incentivizing the adaptive reuse of historic properties in downtown. The market is really building quite a bit of purpose-built student housing right now in downtown, and what we are looking at is how do we incentivize other development that is not going to (include) demolishing some of our iconic historic properties,” said borough planning director Ed LeClear, as he discussed the plan at the Centre County Board of Commissioners meeting on April 23. The borough will be holding a public hearing concerning the program on Monday, April 29, at noon.

The focus is to encourage commercial non-residential use of the historic buildings by providing tax abatements for improvements made on the structures. The improvements that qualify may only be for the rehabilitation or reuse of the structure. The building may not be demolished. The investment into the property must be more than $25,000.

The identified eligible properties were determined by a 1982 Centre Regional Planning Commission report that identified historical resources of the Centre region. Of the 27 buildings, LeClear said they include a few fraternities on Beaver and Pugh streets.
Borough manager Tom Fontaine said that Saint’s Café on Beaver Avenue is on the list of eligible properties and said that while the commercial space of the coffee shop could be an example of a potential use for LERTA, the residential units above would not be eligible unless they were repurposed for commercial use, such as office space.

Before any construction could begin, the property would be assessed and taxed accordingly. Then, when the improvements are completed, a reassessment would reevaluate and the property would gradually work its way up to the higher property tax assessment through 10 years by adding 10 percent of the new assessed tax every year until it is has reached the full, post-construction value.

“The use of the term abatement can be misleading in this context. The fact is that taxes that are paid on the property today based on the rates that are charged on the current assessed value would continue to be paid post-LERTA approval. Improvements on the property that would result in increases in assessed value would be phased in. So there would still be that baseline.  There would be no reduction in taxes paid. Any rate increases that resulted in a bigger levy from the school, municipality or county would also be paid,” said Fountaine.

The borough plans to include the property tax for all three entities — the borough, Centre County and the school district — in the program to increase its effectiveness and plans to have their participation in the public hearing. Currently the borough council is scheduled to discuss the program on May 6. The borough hopes the school district and county consider the ordinance shortly after they vote on the matter, said Fountaine.

“One of the things that we hear a lot about is the cranes in the borough and the growth that is occurring. And the question is often asked ‘What can we do to keep downtown having that historic nature?’ and the buildings that have gone up do have a character that is reminiscent of State College and have a feel of State College. But this will give folks who are saying ‘I would like to have some skyline and be able to see campus from downtown’ a say. I think that this gives them the opportunity to see this and really make an impact,” said County Commissioner Michael Pipe.

Commissioner Higgins noted that having the school district on board is prudent because their tax rate is higher than the county and borough combined.

“That is a good point and I think that most of us feel that it takes all three jurisdictions to make this a meaningful incentive,” said Fountaine.



Vincent Corso is writer for Town&Gown and the Centre County Gazette.
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