Bethlehem earned the City Revitalization and Improvement Zone designation in late 2013, which allows certain state and local taxes generated by businesses in the zone to be used to repay debt service to spur economic development projects within the zone.
While officials announced numerous shovel-ready projects in the CRIZ, only one, Social Still, a craft distillery, got completed in late 2014.
But now, work is underway on two CRIZ projects in South Bethlehem.
Peron Development started construction on the first of three buildings for Greenway Commons on Third Street, a $38 million, 92,000-square-foot project that would bring new office, retail and residential space.
Also, the first part of construction of a six-story building at the corner of Third and New Street, Greenway Park, is underway, which will include an attached parking deck.
A lot of utility work has been completed or will be shortly, and vertical construction is expected to start within the month, said Dennis Benner, developer of Greenway Park.
These developments mark the first signs of life for a zone that’s been struggling to show the expansive growth experienced in Allentown, which has a similar tax incentive.
Bethlehem is only collecting funds from new businesses as opposed to Allentown, which collects funds from new and existing businesses through its Neighborhood Improvement Zone.
Last week, the state Department of Revenue announced the amount of 2015 state tax revenue returned to communities participating in the CRIZ program, with Bethlehem earning $43,654. Last year, the city’s 2014 CRIZ revenue was $18,949.
The 2015 payment is attributable to two new businesses in the zone, which are Social Still and Franklin Hill Vineyards, which operates within Social Still, said Alicia Miller Karner, director of community and economic development for Bethlehem.
The funds are paid to the local development authority for the zone and can be funneled to private developers for debt service, property acquisition, new construction and other costs related to CRIZ development projects, according to the state.
Since the state made a lot of clarifications to the CRIZ legislation, banks are more comfortable funding projects, said Alicia Miller Karner, director of community and economic development for Bethlehem.
“There is more clarity and certainty to a project,” Benner said. “I think the lenders would like it more, too.”
Previously, if a business in the CRIZ lost funds, another business in the CRIZ had to make that money up, Miller Karner said. Now, the legislation no longer places the responsibility of a monetary loss of one business on another, one of the major changes that reduces uncertainty.
“All of those changes have made it a more attractive investment,” Miller Karner said. “We certainly know that the developers were as anxious as we were to see the changes in the legislation. I wouldn’t be surprised if we see more projects for the spring construction season.”