Published Thursday, Feb. 25, 1999 McCullough, secretary of the Department of Community and Economic Development, Gov. Tom Ridge and other officials will fan out across Pennsylvania to launch this experiment aimed at attracting business investment to depressed areas by offering tax breaks.
McCullough is scheduled to appear at 1 p.m. at the Evans industrial park in Wheatland, the area where Sharon Tube Co. plans to undertake a major expansion. He will announce which sites under the umbrella of the Northwest Regional Planning Commission have been selected as tax-free Keystone Opportunity Zones.
Sen. Robert D. Robbins, Salem Township, R-50th District, said putting the Sharon Tube expansion project in a tax-free zone is a way to show state support for a company that has decided to invest in Pennsylvania rather than an out-of-state location.
"We're rewarding a major firm that has always been here," added Robbins.
Besides the Evans industrial park, which appears a likely prospect, Farrell officials want the Broadway Avenue corridor from Wheatland to Sharon designated a tax-free zone to help jump-start the city's ambitious renewal project.
But a notice the county received Wednesday may take the luster off today's announcement.
Wednesday, Mercer County officials learned that Berk Realty has appealed to the Supreme Court a 1997 decision on a 23-acre section of the proposed zone.
Berk wants the federal justices to set aside a Pennsylvania Supreme Court ruling upholding a lower court's decision forcing the sale of its tax-delinquent land on South Dock Street in Sharon. At the request of the Mercer County Tax Claim Bureau, Common Pleas Judge Francis J. Fornelli in October 1997 ordered the land be sold to pay off back taxes.
Such a forced sale is known as a judicial sale. When Fornelli ordered the sale, Berk owed $754,000 in back taxes. The judge rejected Berk's pleas to stay the order pending an appeal. Berk tried to stop the sale by appealing the judge's ruling.
Niles, Ohio-based Berk owed Sharon and Sharon School District taxes since 1990 and county taxes since 1991.
The justices must decide whether they want to hear the appeal.
"They receive these by the bushel full,'' said Donald R. McKay, Mercer County solicitor. "You don't get an appeal heard by the court as a matter of right.''
If the high court refuses to hear the appeal, the state Supreme Court decision stands.
Even if the Supreme Court agrees to hear the appeal, the current owner of those 23 acres, Shenango Valley Industrial Development Corp., has said it would not develop the property until the case is resolved.
A message left this morning at Berk's offices was not immediately returned.
Also expected to be named a Keystone zone is the Kebert Industrial Park, site of a World War II ordnance plant on the Mercer-Crawford County border.
The Ridge administration will designate a total of 12 zones in Pennsylvania to test the prospect that state and local tax breaks can jump-start the economy in downtown business districts, older industrial parks and blighted neighborhoods where nothing else has worked. State lawmakers approved legislation creating the program last fall.
The program will enable businesses to invest in a designated zone and escape the burden of state and local taxes for up to a dozen years. Ridge has described it as a way to entice businesses back into areas that were abandoned during the last two decades and give a jump-start to new or existing industrial parks.
State officials encouraged the northwest commission, based in Franklin, and other development agencies to create regional zones, consisting of up to 12 subzones or, parcels of property. They believe this regional approach will provide more administrative structure than just having bits of tax-free property scattered across the map and enable local officials to better market the sites to attract investors.
Theoretically, there could be up to 144 of these subzones created across the state. The only real suspense with today's announcement is whether all the subzones outlined in proposals will get the green light. The law stipulates that an area designated as a zone must be abandoned or underused, where state and local tax revenues are already at a minimum.
Under the program, the state, local towns and schools in a Keystone zone will take steps to eliminate or reduce for up to 12 years taxes paid by businesses and homeowners. The state will waive its income, business and sales taxes in a zone; local governments will waive property, income taxes and mercantile taxes.
The state will also provide lower interest rates on state loans to businesses located in zones and give priority consideration in several grant programs. The zones will get a $250,000 grant to implement a development plan and update property ownership information.
