Our goal: promote economic prosperity
The Lehigh Valley boasts some of the strongest incentive programs in the country, and LVEDC can help connect your company with the right program to help your company grow and succeed. Below are some incentive programs available in the Lehigh Valley:
Keystone Opportunity Zones
Keystone Opportunity Zones (KOZs) eliminate specific state and local taxes within underdeveloped and underutilized areas, providing tax abatements for county and township property taxes, corporate net income taxes, and school taxes for a period of 10 years. Created in 1999 by the Commonwealth of Pennsylvania to cultivate community and economic development, the program has spurred the creation of more than 34,000 jobs and about $10.7 billion in business development over the last 13 years.
LVEDC administers the program on behalf of the Pennsylvania Department of Community and Economic Development. Businesses looking to relocate from outside of Pennsylvania to a KOZ need to own or lease property within the zone for at least half the tax year to claim an exemption from state and local taxes. Businesses already in Pennsylvania can also move into a KOZ and be exempt from taxes, provided they either increase full-time employment by at least 20 percent in their first full year in the zone or make a capital investment equal to 10 percent of their previous years gross revenues.
Allentown Neighborhood Improvement Zone (NIZ)
Widely considered one of the most powerful incentive programs on the East Coast, the Neighborhood Improvement Zone (NIZ) is a special taxing district that encourages development and revitalization in downtown Allentown, comprising about 128 acres in the city’s downtown neighborhood and riverfront district. All taxes generated by the NIZ, with the exception of school district and city taxes, can be used to pay debt service on any financed improvements within the NIZ.
The centerpiece of the NIZ is the PPL Center hockey arena, the home of the Lehigh Valley Phantoms, the minor league affiliate of the Philadelphia Flyers. The 8,500-seat arena also hosts concerts and events. All potential NIZ projects must be geographically located within the NIZ zone and must go through a pre-qualification, application, and if approved, closing process. Watch the video below for more information:
For more information, contact the city of Allentown at (610) 437-7610.
Bethlehem City Revitalization & Improvement Zone (CRIZ)
The CRIZ consists of 130 acres of parcels designated for economic development and job creation within the city of Bethlehem. State and local taxes collected within the CRIZ will be used to repay debt service to stimulate economic development projects within the zone. Bonds will be issued by the Bethlehem Revitalization and Improvement Zone Authority (BRIA), which will then be paid off using various State and Local Tax Revenues created in the zone.
The focus of this program is to spur new growth, by enhancing development opportunities that will help to revive Bethlehem and create new jobs for the residents of the city. The parcels included in the CRIZ include vacant, desolate, underutilized, and abandoned properties that are ready for redevelopment. These developments will help to create jobs, increase personal income, grow local and state tax revenues, and improve the overall quality of living for residents.
Southside Bethlehem KIZ
Keystone Innovation Zones (KIZs) are designated areas within Pennsylvania that foster entrepreneurial growth in coordination with the efforts of institutions of higher education. The Southside Bethlehem KIZ, adjacent to Lehigh University, lets startup companies qualify for multiple financial and advisory support benefits. Among them is a $15,000 technology transfer grant that helps a company market and commercialize a product or service, as well as student internship grants totaling $2,500 for undergraduate students and $5,000 for graduate students.
In the past year alone, the Southside Bethlehem KIZ has created 44 jobs, increased revenue by $4 million, and led to $1.2 million in leveraged funding, including $1 million in investment capital and $177,000 in third party loans. The KIZ is also the home of Partnership for Innovation (Pi), a startup business incubator with shared facilities and private, secure office suites ranging from 115 to 1,900 square feet.
Foreign Trade Zone #272
A foreign trade zone (FTZ) is a physical location within a United States customs territory, where merchandise receives the same treatment as if it were outside the commerce of the United States. This allows merchandise, while located in the FTZ, not to be subjected to customs duties and other tariff and taxes. This allows domestic-based manufacturers to import foreign-sourced parts or materials into the FTZ without being responsible for paying duties on them. They could then incorporate those parts or materials into their products, utilizing U.S. labor, and sell the part or materials in the domestic market, thus selecting whether to have the customs duty apply to the components or the finished product.
Distributors can also benefit as the FTZ allows for direct delivery from the ports into the zone, which can save time, money, and reduce customs processing fees. Merchandise can also be moved from one FTZ or another without being subject to customs duty via a process called Zone-to-Zone Transfer.
Local Economic Revitalization Tax Assistance (LERTA)
Authorizing local taxing authorities to provide for tax exemption for certain deteriorated industrial, commercial, and other business property and for new construction in deteriorated areas of economically depressed communities; providing an exemption schedule and establishing standards and qualifications.
Redevelopment Assistance Capital Program (RACP)
A commonwealth grant program administered by the Office of the Budget for the acquisition and construction of regional economic, cultural, civic, recreational, and historical improvement projects. Learn more here.
Tax Increment Financing (TIF)
A public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects. TIF uses future gains in taxes to subsidize current improvements, which are projected to create the conditions for said gains.