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Board hears opportunity zone pitch

October 29, 1998|By DON AINES

CHAMBERSBURG, Pa. - Existing circumstances at the Cumberland Valley Business Park make it an ideal location for a proposed Keystone Opportunity Zone, according to proponents at a public hearing Wednesday night.

"We have an unusual situation where all the stars appear to be aligned in our favor," said L. Michael Ross, executive director of the Franklin County Area Development Corporation, after the hearing in front of the Chambersburg Area School District's board of directors.

Some board members, however, were concerned about the effect on the district's population, transportation and tax base.

Legislation signed into law a few weeks ago would exempt businesses within the zones from most state and local taxes for 12 years, Ross said.

The business park is being developed on 1,500 acres of excess property on the depot. The zone would be made up of 283 mostly empty acres within the park, according to Letterkenny Industrial Development Authority Executive Director Pam Gaudiose.

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The tax abatement for the zone must be approved by the district, Greene Township and Franklin County. At this point however, the land is still federal property and pays no real estate taxes.

Zones will also be exempt from earned income taxes. That wouldn't apply since no one lives on the depot.

Board President D. Eugene Gayman said the district once received about $1 million a year in payments in lieu of taxes from the federal government. That figure, based on the number of federal employees, has steadily declined over the years, to $83,000 in 1997-98.

Board Member Robert Helman asked why the proposed zone doesn't include many of the empty buildings at the depot.

"Some of the existing properties ... are 50 years old and will not accommodate the kinds of businesses we're trying to attract," Gaudiose said. The selected properties also take advantage of existing rail lines and utilities, she said.

Gaudiose said the authority would continue to market buildings in the park to suitable businesses.

Board Member Thomas Orndorf said the zone could attract new businesses, along with new employees and families, "that can tax the resources we already have."

Board Member William Fosnot said the zone could tax the road system into the depot and compete with ongoing development projects in the area that won't benefit from the exemption.

"What we're trying to do is create upper-level jobs" with industries that are new to the county, Ross said.

The state legislation set few criteria for the zones, but local officials have set the bar higher. Those include a minimum of $7.5 million in investment, the creation of a least 100 jobs and an average wage rate three times the federal minimum wage, at least $15.45 an hour.

No established firm in the county will be allowed to relocate to the zone merely to avoid taxes. Companies from out of the county would have to show that they are not direct competitors with existing county firms.

The board will probably vote on the zone proposal next month. The county and Greene Township are scheduled to have hearings on the proposal in November, as well.

The application must be received by the state Department of Community and Economic Development before the end of the year. Ross said the department will announce what zones around the state have been approved by February.

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