East Cocalico considers tax incentive program

By on September 6, 2018

East Cocalico Township and the Cocalico School District are considering a tax incentive program that aims to draw new business and spur commercial improvements along the Route 272 corridor or beyond.

At a school board work session on Aug. 27, a township official outlined the possible framework for a LERTA zone. LERTA, or local economic revitalization tax assistance, is a state-sanctioned program allowing municipalities to phase in property taxes on new assessed value over an extended period.

East Cocalico’s white paper, developed by a committee working since the beginning of the year, would include provisions similar to those instituted in other LERTA zones in Lancaster County. Details, far from finalized, include a standing application process; a minimum $25,000 in new assessed value required to participate; and five year abatement period.

Cocalico Superintendent Ella Musser said the school board was receptive to the idea, which came about after UGI asked for and received a 10-year LERTA break on construction of its new headquarters on Col. Howard Boulevard.

“That UGI LERTA approval sparked some real conversation in the community,” Musser said last week. “The goal is to boost development and improve the tax base long-term… There will be no loss at any point.”

Musser said the first’s year tax break from the school district, the township and county taxes would equal 23.505 mills, or $581, per $25,000 of new value. The developers of new construction valued at $3 million would save nearly $70,000 in taxes during the first year alone.

As drafted, Musser said, taxes would increase in the second year after construction to 25 percent, then to 50 percent the next, 75 percent and 100 percent in the final year.

During that period, pre-existing businesses would continue to pay 100 percent of their taxes on previous assessed value.

Township manager Scott Russell said Thursday the proposal is simply an outline of possibilities and “does not represent the end all.”

He was hesitant to limit the zone’s borders to the Route 272 corridor, and Musser said it could possibly be used to finally draw businesses to the Cocalico Commons project, long-planned for a spot near UGI on Col. Howard Boulevard.

Russell, however, said the path forward for the LERTA break still requires several meetings to finalize details, multiple public meetings and approval from the school board, township supervisors and county supervisors.

He has yet to even set a date to present the working proposals to county officials.

“I don’t know from a timing standpoint if that’s going to work out for them (Cocalico Commons),” said Russell, who noted a final plan extension granted in April expires this December. “They’re running out of time.”

But Russell said the township wants to do more to attract reinvestment and new business dollars to the community. At the Aug. 27 meeting, school board members questioned whether that effort could increase traffic.

Musser said township committee member Jeff Mitchell told the board a traffic study is already planned, regardless of the LERTA zone’s success, and a traffic impact fee could be passed along to developers whose businesses trigger enough new trips.

“The school board sees any improvement in the business base as important,” Musser said. “Not only do we get that better tax base eventually, but there are more internship and job shadowing opportunities for our students. We see it as a win.”

Lancaster County has previously approved tax incentives for projects in parts of Mount Joy, Millersville, and Manheim. The city also has adopted a similar LERTA ordinance eight times, with the current version set to expire in 2019. Most municipalities grant property owners relief over a 10-year period.

UGI is expected to save nearly $4 million on its 100,000-squarefoot building, which is scheduled to open later this year.

Kimberly Marselas is a correspondent for the Ephrata Review.

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