Tax abatement program could help spruce up Chambersburg

April 01, 2007|By DON AINES

CHAMBERSBURG, PA.-If the possibility of higher taxes is discouraging home and business owners from improving their properties in downtown Chambersburg, a proposed real estate tax abatement program could be just the incentive they need.

That is the hope of Paul Cullinane, president of Downtown Chambersburg Inc., who this week successfully pitched a proposal for a Local Economic Revitalization Tax Assistance Act zone to both the Chambersburg Borough Council and the Chambersburg Area School District. The council and the school board both voted to create the LERTA zone in the downtown historic area and some adjacent residential areas.

The Franklin County Board of Commissioners will hold its public hearing on the zone on April 10.

Owners of properties within the zone who start making improvements during the next five years will not have to pay the higher taxes until three years after the building is reassessed. Property owners can begin improvements between now and July 1, 2012, complete the work within two years of receiving a building permit and get the three-year abatement.


"That certainly would help with making decisions to pour more money into the business. Frankly, we're always looking for any tax advantage," said Jim Resh, owner of J&B Bridals on South Main Street. The business has been downtown 29 years and now occupies three adjoining buildings he owns.

"This is not a new topic for the community," Cullinane said, noting that LERTA zones have been created in the downtown three times, the last one having lapsed in 2005. During the last LERTA period, Cullinane said several projects were done, with the owners being able to defer paying taxes totaling $90,000 per year.

"This really is the only development incentive that local taxing bodies have," Chambersburg Borough Manager Eric Oyer said this week. The proposed zone is expanded from the three approved in the past to include adjacent residential neighborhoods, as well as the commercial area downtown, he said.

Those residential areas are part of Downtown Chambersburg's participation in Pennsylvania's Elm Street program, which is aimed at revitalizing older neighborhoods.

Cullinane said the county, borough and school district lose nothing by approving the LERTA zone because each still will collect taxes based on current assessments. If an owner chooses to add to the value of a property, those taxes will go up after three years.

Cullinane said the program could build the property tax base for the three taxing authorities, plus bring in more earned income taxes if it results in higher employment.

Another change from previous LERTA zones is that property owners who make improvements must wait at least three years after completing the work to request a reassessment from the county Board of Assessment, Cullinane said. In the past, one business made $2 million in improvements, then asked for a lower assessment, claiming its market value had decreased, school district solicitor Jan Sulcove said.

Stanley Helman was the only school board member to vote against creating the zone at Wednesday's meeting. He said he would prefer state law allow a "blanket abatement" on any old buildings within the school district.

"If we approve this, we're asking the entire district to support downtown property owners," Helman said.

County Commissioner Bob Thomas said his board likely will approve the LERTA zone.

"I'm presuming it would be approved ... We've done it in the past, and it's helped improve the downtown," Thomas said.

Public hearing

What: Public hearing on a Local Economic Revitalization Tax Assistance Act zone for downtown Chambersburg.

When: Tuesday, April 10, 2:45 p.m.

Where: Franklin County Board of Commissioners meeting room, 14 N. Main St., Chambersburg, Pa.

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