Harrisburg, Pennsylvania — An Economic Profile

ECONOMIC DEVELOPMENT

THE MAYOR’S OFFICE OF ECONOMIC DEVELOPMENT (MOED), ESTABLISHED IN 1983, SERVES AS THE KEY AGENCY CHARGED TO ENHANCE, RETAIN AND GENERATE NEW BUSINESS AND INDUSTRIAL ACTIVITY IN THE CITY OF HARRISBURG.

MOED helps businesses select sites, identify financing and job training programs and obtain managerial and technical services. Specific programs of MOED include:

Revolving Loan Program. The city has adapted to the changing credit needs of new and existing businesses in Harrisburg by offering several programs that may finance up to 50 percent of the total cost for the start-up of new businesses, and expansion of existing businesses, including the financing of new construction, acquisition costs, rehabilitation and the purchase of machinery or equipment.

Technical Assistance. Helps developers with permits and other approval processes; provides information about taxes, zoning and other municipal information; offers training programs, business start-up, accounting and insurance seminars, and assists in the preparation of business plans.

Sites Inventory. Maintenance of an updated inventory of publicly and privately owned sites in the city, based upon a data bank developed in cooperation with area realtors, to assist businesses in finding suitable locations.

Brownfields Initiatives. Up to $5,000 available per site to create a Brownfields inventory of former industrial locations in the city to identify environmental issues as an initial step for their ultimate development and funding to assist with any mitigation.

Financial Incentives. Available to businesses through Revenue Bond and Mortgage Program Financing, and through low interest loans and grants provided by the Pennsylvania Industrial Development Authority, the Pennsylvania Department of Community and Economic Development, the Pennsylvania Minority Business Development Authority, Small Business First, Ben Franklin Partnership Grants for Technological Innovation, the Infrastructure Development Program, Machinery and Equipment Loan Fund and the SBA 504 Loan Program.

Investment Tax Credits. Seven areas of Harrisburg, and numerous individual sites, have been designated National Historic Districts or Sites through city initiatives. The rehabilitation of certified, income producing buildings within a district or site is eligible for a 20-percent investment tax credit for funds expended on certified rehabilitation. Sites not historically registered can receive a 10% tax credit.

Business Classification System. An intensive analysis that assesses both the consumption level of the area’s population and the existing business base, using a wide range of economic and demographic data, and measuring the results against the current output of locally generated goods, services and products. The net result is the identification of areas of business activity for which there are under met, adequate or saturated market needs. This data is useful in encouraging the start-up and expansion of businesses in the city.

Tax Abatement. The City is the only municipality in the region to offer this incentive which covers both new and rehabilitated buildings for residential, commercial and industrial use. The city defers any increased real estate taxes on the property investment for a period of time.

Two-Tiered Real Estate Taxes. Harrisburg is the only municipality in the region with a tax rate in which taxes on improvements or buildings are only 20% of the tax rate on land. This encourages the highest and best use of land and discourages land speculation, while providing significant savings to property owners over the usual single-tax rate system in use elsewhere.

Import/Export Trade. Harrisburg actively assists local businesses to enter their goods and services into the world market and is working with the Susquehanna Area Regional Airport Authority in establishing a Foreign Trade Zone in key areas of the Federal Enterprise Community and State-designated Enterprise Zone.

Site Improvements. Eligible business development projects can receive certain infrastructure and site improvements through a grant or low interest-rate loan basis.

Public Property Donations. The city, through the renewal and delinquent tax processes, secures ownership of real estate which is then made available for new development at low or no cost.

In addition to these, a principal component of MOED is the Division of Contract Compliance and Minority and Female Business Enterprises, which brings together minority- and women-owned businesses with other private firms and public agencies to exchange goods, services and information. The Division of Contract Compliance and Minority and Female Business Enterprises provides the following services:

• A certification program to verify bonafide minority and female/owned businesses.
• Information and financial counseling in the areas of accounting, bookkeeping, management, site selection, training, obtaining surety bonding and meeting business insurance needs.
• Estimating and bidding assistance.

New Baldwin Corridor State Enterprise Zone. In 1983, a significant portion of the city’s Allison Hill section was designated a state enterprise zone, qualifying it for a variety of state funding programs. As this enterprise zone was reaching its term limit in 1992, economic concerns beset the huge Bethlehem Steel plant in nearby Steelton, prompting local municipal leaders to unite to confront the problem through the efforts of the New Baldwin Corridor Coalition. In addition to representation by the municipalities of the City of Harrisburg, Highspire Borough, Lower Swatara Township, Middletown Borough, Royalton Borough, Steelton Borough and Swatara Township, the coalition includes representatives from various school districts, businesses, non-profit agencies, labor unions and local neighborhood groups, and other economic development agencies. With the approval of the Pennsylvania Department of Community and Economic Development, Harrisburg has expanded its enterprise zone and renamed it the New Baldwin Corridor Enterprise Zone. It includes the Cameron Street Industrial Corridor and a large part of Allison Hill in the city, as well as stretches of U.S. 230 that pass through the aforementioned municipalities and portions eastward along the former Reading Railroad Line. The City is the Zone Administrator and works with a steering committee which advises on zone activities.

Federal Enterprise Community. In late 1994, the City sought approval, which was granted through an extremely competitive process, by the U.S. Department of Housing and Urban Development, for much of the Allison Hill, Uptown and South Harrisburg areas of the city to receive Federal Enterprise Community status. Harrisburg was one of only 65 places across the nation to obtain such designation. Under this program, the City has been the recipient of further community and economic development incentives at the Federal level. This elevated level of activity has helped to leverage several major anchor projects, which include:

• $11 Million conversion of the Sylvan Heights Mansion as the headquarters of the YWCA of Greater Harrisburg. This Greek Revival-styled, temple-like edifice, perched on Allison Hill’s bluff just above Cameron and Market Streets and overlooking the downtown, is named the John C. Kunkel Center for the YWCA and is also home to the city’s first charter school (see “Education”). The project, which involved a creative blend of public and private financing, included a new wing, almost doubling the size of the original 1866 building on the five acre tract;
• $7.8 Million conversion of the historic McFarland Press Building at Mulberry and Crescent Streets to 49 apartments including the Community Arts Center operated by Danzante, a Harrisburg cultural performing arts group. The building opened in 1998;
• Construction of 18 new affordable townhouses, and one rehab, in the Summit Terrace Neighborhood with a total of 60 planned;
• $2.5 Million rehabilitation of a long abandoned warehouse at 50 N. Cameron Street for the Appalachian Brewing Company. The 50,000 square foot microbrewery complete with restaurant, separate kitchen facility and beer hall which produces 15,000 barrels of beer annually, is one of the largest brewpubs in the United States. The facility is also the anchor property of the adjacent Paxton Commons project, a planned retail entertainment center;
• Investment of $9 Million in 98,000 square feet of additional space by Richfood, Inc., on Industrial Road in the northern end of the Enterprise Zone;
• $1.5 Million renovation of the former and long-vacant TRW Administration Building on N. Cameron Street by Ritter Properties, a Harrisburg contracting firm, for office use. EPSYS Corporation, a subsidiary of Benatec, is the first anchor tenant;
• $500,000 renovation of a former bank building (circa. 1920), in the 1000 block of Market Street, by Knezic & Pavone, a full-service advertising agency with 21 full-time employees.

In addition, the Harrisburg Enterprise Development Corporation (HEDCO), a nonprofit, multi-neighborhood based development corporation organized by the City in 1993, brings grass-roots involvement to that portion of the enterprise zone which lies within Harrisburg’s corporate limits.

Keystone Opportunity Zones. Several areas along the Cameron Street corridor have been designated Keystone Opportunity Zones, as enabled by the Commonwealth of Pennsylvania, in which residents and businesses are exempt from paying all real estate taxes and most state business and income taxes until 2011. Such an incentive, as one of the first programs of its type in the United States, will stimulate substantial development activity in these areas.

The Regional Approach

Other regional economic development agencies include:

— Dauphin County Department of Community and Economic Development (DCDCED).
Although working in close partnership arrangement with the City of Harrisburg and MOED, DCDCED falls within the purview of the Dauphin County Commissioners and assists businesses and municipalities county-wide in the areas of both economic and community development. In addition, the Department staffs the following organizations:

— The Dauphin County Industrial Development Authority.
Organized in 1967 as a standing county authority, DCIDA is the finance arm of the group and engages in tax exempt and taxable bond and mortgage financing on behalf of manufacturers, non-profits and companies establishing corporate headquarters here. The IDA has participated in millions of dollars in new construction and rehabilitation projects particularly in the last several years.

— The Dauphin County Economic Development Corporation.
The most recently organized of the group, DCEDC is a non-profit development corporation poised to partner in tax exempt real estate development projects and to channel grant funding to communities and organizations in need of community and economic development assistance. A major activity of the corporation is the implementation of the Team Pennsylvania program; a state-wide initiative designed to retain and grow existing businesses as well as to attract new ones through a sophisticated internet based business resource network and business calling program. The corporation, which has partnered with the City of Harrisburg in this effort, is a member of SouthCentral Team Pennsylvania, Inc., which also consists of the economic development corporations representing neighboring Cumberland, York, Lebanon, Adams, Franklin and Perry Counties.

— Capital Region Economic Development Corporation(CREDC).
Organized in 1984, CREDC serves as the area loan organization to provide financing to local businesses under two of the Commonwealth of Pennsylvania’s loan programs, engages in marketing Metropolitan Harrisburg and the three-county Capital Region and provides a full range of other economic services.

With the support of over 300 companies and organizations, CREDC addresses issues that affect the development future of the area ranging from re-zoning alternatives to long range highway studies. Several accomplishments with which CREDC has been involved include holding seminars concerning export trade opportunities with Mexico and Europe; engaging in national and international marketing and promotion activities on behalf of the region, and administering a low-interest loan program for area businesses. The City of Harrisburg is a founding member of CREDC and provides annual financial support. CREDC is a division of the broader Harrisburg Regional Chamber, which as an umbrella organization, houses affiliated agencies at its headquarters at 3211 N. Front Street, Harrisburg, including Leadership Harrisburg, the Technology Council of Central Pennsylvania, the Capital Area Minority Development Corporation (CAMCO) and Envision Capital Region. As the local chamber of commerce agency, the Harrisburg Regional Chamber is responsible for serving as a major, private-sector advocate, maintaining an area directory of member businesses and acting as a source of local demographic, tourism, employment and housing information. The organization holds a variety of seminars, business receptions and trade fairs, which promote area businesses. The city of Harrisburg is a chamber member and participant.