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Tax-exempt zone moves closer to reality at Letterkenny

December 03, 1998|By DON AINES

CHAMBERSBURG, Pa. - By an 8-1 vote the Chambersburg Area School District Board of Directors Wednesday night approved a plan for a tax-exempt business zone at Letterkenny Army Depot.

The proposed Keystone Opportunity Zone would be on 283 mostly undeveloped acres. If the zone is approved by the Pennsylvania Department of Community and Economic Development, businesses moving there will be exempt from most state and local taxes for a 12-year period beginning on Jan. 1, 1999.

Last month, Greene and Letterkenny township supervisors approved the plan, according to Franklin County Area Development Corporation Executive Director L. Michael Ross. The Franklin County Commissioners said Wednesday they will approve the plan when they meet today.

The Pennsylvania Keystone Opportunity Zone legislation was signed into law in October as a means of creating jobs and development in unused or underused properties that generate little or no taxes.

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In Letterkenny's case, the land hasn't generated any local real estate taxes because it belongs to the federal government, and it hasn't earned income taxes because no one lives there. The land is scheduled to be turned over to the Letterkenny Industrial Development Authority over the next two years.

While the school district and county have real estate taxes, Greene and Letterkenny townships do not. All four bodies must approve the proposal before the end of the year.

The authority is developing the Cumberland Valley Business Park on 1,500 acres of the depot it will receive from the Department of the Army. Last month it received deeds on 234 of those acres.

Within the area being considered for the zone there is only one building, a 90,000-square-foot warehouse converted several years ago to produce Paladin self-propelled howitzers. The 950th and last Paladin is scheduled to roll off the line in July 1999.

The state law has few requirements, but the authority has set a number of criteria aimed at attracting new industries and high-paying jobs to replace those being lost at the depot, according to Ross.

Those include a minimum capital investment of $7.5 million, average wages three times the federal minimum wage, an annual payroll of $1.6 million or more and the creation of 100 jobs, or 10 jobs per acre of "developable" land.

School board attorney Jan Sulcove said "developable" was added to allow the authority some flexibility for businesses looking at smaller parcels within the zone.

The school board tabled a motion on the plan last month because of some last-minute changes in language.

Local criteria also include provisions to prevent existing county businesses from moving there just to avoid taxes, and measures to keep out businesses that would compete with existing county industries.

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