HARRISBURG, Pa., Sept. 20 /PRNewswire/ -- Pennsylvania Governor Edward G. Rendell said today that the state is supporting Butler's revitalization efforts by investing $5 million to back the city's tax increment financing district. Under the plan, the city will issue bonds to be repaid through subsequent revenues raised by incoming businesses and development - an approach often used by larger metropolitan areas.
The Commonwealth Financing Authority (CFA) approved the funding through the Tax Increment Financing (TIF) Guarantee Program, a $100 million program aimed at promoting TIF districts across Pennsylvania. Governor Rendell launched the TIF Guarantee Program in 2003 as part of his larger $2.8 billion economic stimulus package.
"Since January 2003, we have looked for innovative ways to invest in our communities, companies and people," said Governor Rendell. "By targeting our resources wisely, we have been able to leverage private-sector investments that are breathing new life into our towns and cities, while opening the door to new opportunities for our citizens."
In the past, TIF districts have been used in Pittsburgh and Philadelphia to spur economic development and attract new investment. Because of the complex nature of these arrangements, smaller communities are often dissuaded from putting them to use, but thanks to the TIF Guarantee Program, this approach has become a viable option for communities of all sizes.
Butler's Redevelopment Authority received the $5 million TIF guarantee on bonds that will be issued to the Community Development Corporation of Butler County. The bond proceeds will help fund development in the West End Revitalization Area TIF District.
Both the city and county have identified these 59 parcels as an area of need because of increased sprawl. The TIF funds will be used primarily as a match for development projects which include the Historic Pullman Ball Park and surrounding areas, the Sullivan Run flood control project and Trinity Brownfield Phase III revitalization project. Once completed, the West End Revitalization district is expected to create and retain a total of 1,300 new jobs.
A TIF district can form when a municipality determines it wants to use a parcel of land (primarily a brownfield site) for economic development. The first steps include meetings between members of the community, the local redevelopment authority and school district to discuss how to use the land. A plan is then created to forecast how much tax revenue the site can generate, which is then used to calculate the bond amount the district can issue for development.
Because TIF districts require a larger resource base and a firm commitment from a number of groups, they are rarely used outside of major cities. To facilitate the process for smaller and medium-sized communities, Governor Rendell created the TIF Guarantee Program. Through this initiative, the CFA will guarantee part or all of a TIF district's bond issue, making the initial financial steps easier to complete. The guidelines will allow for a guarantee of up to $5 million, over a 20-year period, per project, allowing the districts more flexibility in planning efforts.
The Commonwealth Financing Authority is a seven-member board that was created to administer and fund projects through some of Governor Rendell's economic stimulus programs, including the TIF Guarantee, Business in Our Sites, First Industries Fund, New PA Venture Capital Investment, New Pennsylvania Venture Guarantee, Building PA, PennWorks, and the Second Stage Loan programs.
For guidelines and more information on TIF and other economic stimulus programs, visit http://www.newPA.com, or call 1-866-GO-NEWPA (1-866-466-3972).
The Rendell Administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses. To find out more about Governor Rendell's initiatives and to sign up for his weekly newsletter, visit his Web site at: http://www.governor.state.pa.us.
CONTACT: Michael Smith, Pennsylvania Office of the Governor, +1-717-783-1116; or Kevin Ortiz (DCED), +1-717-783-1132.
Source: Pennsylvania Office of the Governor