Letterkenny land designated tax-free zone

February 25, 1999|By RICHARD F. BELISLE, Waynesboro

CHAMBERSBURG, Pa. - Some 283 acres at Letterkenny Army Depot became a tax-free zone Thursday thanks to a new state initiative aimed at bringing economic development across Pennsylvania.

Gov. Tom Ridge criss-crossed the state Thursday announcing 12 Keystone Opportunity Zones where state and local taxes will be eliminated for 12 years in a move to create jobs and economic opportunity in what he called some of the state's most "challenged communities."

The Franklin County Commissioners, Chambersburg Area School District and Greene and Letterkenny townships have agreed to trade the taxes for economical development. The land earmarked for the tax-free zone has been undeveloped federal property that was not liable for local taxes ever since Letterkenny opened in the early 1940s. The base covers about 19,000 acres.

The 283 acres designated Thursday represent about 19 percent of the 1,500 acres the Army will eventually turn over to Franklin County for industrial and commercial development. The base was ordered to cut back its operations in 1995 by the Base Realignment and Closure Commission.

About 234 acres were transferred in 1998 along with many of the old Army buildings and warehouses. Some have already been converted to private industrial and commercial use in what is now known as the Cumberland Valley Business Park.

The Letterkenuny Industrial Development Authority (LIDA), the agency created to convert the 1,500 acres, sought the Keystone Opportunity Zone designation for the 283 acres.

"We believe it will give us the opportunity to forever change the economic development landscape in Franklin County," said G. Warren Elliott, president of the Franklin County Commissioners.

Elliott said a tax-free zone means the county will be able to attract high technology companies that pay their employees in the $15- to $20-hour range.

The kinds of companies that could be recruited include national or regional headquarters of insurance companies, major retail stores, defense contractors and research and development firms, county officials have said.

The state would waive corporate net income, capital stock, franchise and sales taxes on companies doing business in the tax-free zone. The clock on all state and local tax exemptions started Jan. 1.

Ridge designated 26,000 acres of tax-free zones Thursday in 12 host zones and 118 sub-zones like Letterkenny.

"Tax-free Keystone Opportunity Zones provide a powerful incentive to bring new jobs, new families and new hope to our communities," Ridge said in prepared remarks. "What better incentive is there to create jobs and build stronger communities than to eliminate taxes."

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