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Keystone Opportunity Zone pushed forward

December 08, 1998|By DON AINES

CHAMBERSBURG, Pa. - With approvals from three local governments and a school district in hand, the Letterkenny Industrial Development Authority is moving ahead with plans to create a tax-exempt Keystone Opportunity Zone at the army depot.

"The board authorized the submission of the application to the South Central Pennsylvania Coalition," Authority Board Chairman Robert G. Zullinger said Monday. The coalition includes development corporations from a seven-county area that will forward the application to the state by the end of the year.

Last Wednesday the Chambersburg Area School District's board of directors approved the plan, followed the next day by the Franklin County Board of Commissioners. It had previously been approved by supervisors in Greene and Letterkenny Townships.

If it is approved by the Pennsylvania Department of Community and Economic Development, companies building plants on the 283-acre zone would be exempt from most state taxes and local real estate and earned income taxes for up to 12 years beginning on Jan. 1.

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The land generates no local tax revenues at this point because it is largely undeveloped and owned by the federal government.

The opportunity zone would actually be a subzone within 12 zones authorized under legislation signed into law in October. Opportunity zones can comprise up to 5,000 acres within any region, although Zullinger said not all of the seven counties have plans to establish subzones.

The Army will eventually turn over 1,500 of its 19,000 acres to the authority for development of the Cumberland Valley Business Park. Monday the authority approved a finder's fee agreement with the Franklin County Area Development Corporation, Zullinger said.

The development corporation will be paid a minimum of $40,000 a year for its services in trying to attract new businesses and industries to the depot, according to Zullinger.

The development corporation will be paid a 2 percent commission for the first $500,000 of capital investment by any company that moves to the depot. It will get 1.5 percent for the second $500,000 and a 1 percent commission for all investment over $1 million, Zullinger said.

The authority also took another step toward taking over the electric power distribution system at the depot. Zullinger said the board authorized the authority to sign agreements with Allegheny Power Co. later this week.

Easements for the electrical utilities will eventually be transferred from the Army to the authority, but Zullinger said the authority will take over operations sooner.

The authority will buy electricity from Allegheny Power and resell it to customers on the depot, including the Army.

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