[Added by Ord. No. 2127, 5/6/2019]
The Borough of State College hereby establishes a Local Economic Revitalization Tax Assistance (LERTA) Program on May 6, 2019, which will expire on May 6, 2029. However, any taxpayer who has received or applied for the exemption granted by this Program prior to May 6, 2029, shall, if said exemption is granted, be entitled to the full ten-year exemption authorized according to the exemption schedule listed herein.
As used in the Part, the following terms shall have the meanings indicated:
ASSESSED VALUATION
The assessment placed on real property by the Centre County Assessor upon which all real estate taxes are calculated.
MUNICIPALITY
The Borough of State College, Pennsylvania.
COUNTY
Centre County, Pennsylvania.
DETERIORATED COMMERCIAL PROPERTY
Any industrial or commercial property owned by an individual, association or corporation and located in a qualified area, as hereinafter provided, or any such property that was the subject of an order by a government agency requiring the unit to be vacated, condemned or demolished by reason of noncompliance with laws, ordinances or regulations. Rental residential use, owner-occupied residential use and any other residential use that provides income is not considered an eligible commercial property.
IMPROVEMENT(S)
Repair, construction or reconstruction, including alterations and additions, having the effect of rehabilitating deteriorated commercial structures, so that they may be occupied or may attain a higher standard of safety, health, economic use or amenity or are brought into compliance with laws, ordinances or regulations governing such standards. Ordinary upkeep and maintenance shall not be deemed an improvement. Repair, construction or reconstruction of a property for any noncommercial use shall not be considered a permitted improvement under this Part.
NEW CONSTRUCTION
Includes major renovation of existing building stock, including major HVAC renovation, significant building envelope modifications, building facade repair and/or major interior renovations.
SCHOOL DISTRICT
The State College Area School District.
a. 
The following areas within the municipality of State College are hereby determined to be eligible for tax exemption under LERTA.
(1) 
The downtown area that includes properties with structures that exist at time of application and are listed in the l 982 Historic Resources of the Centre Region document.
(2) 
The eligible listed properties are located within the following boundary description: south of College Avenue, north of Beaver Avenue, and between South Burrowes Street and Locust Lane.
(3) 
Additionally, eligible listed properties included south of Beaver Avenue between Fraser Street and South Allen Street and north of West Fairmont Avenue.
b. 
The following areas are fully identified as deteriorated areas on the map captioned "LERTA Areas Map" in Appendix l of this Part.[1]
[1]
Editor's Note: Appendix 1 is on file in the Borough offices.
c. 
The properties must be adaptively reused to a commercial use and cannot be demolished.
d. 
Adjacent properties are not eligible for this abatement.
a. 
The exemption from real property taxes applies only to increased assessed value for nonresidential uses.
b. 
The actual cost of the new construction or improvements to qualify for the exemption must be in excess of $75,000 in order for the property to be eligible for the LERTA tax abatement.
c. 
In all cases, the exemption from taxes shall be limited to that portion of the additional assessment attributable to the improvement or new construction, as the case may be, and for which a separate assessment has been made by the County Board of Assessment Appeals and for which an exemption has been specifically and separately requested. No tax exemption shall be granted if the property owner does not secure the necessary and proper permits prior to improving the property. No tax exemption shall be granted if the property as completed does not comply with the minimum standards of the State College Borough Safety and Property Maintenance Code and the Zoning Ordinance.[1]
[1]
Editor's Note: See Ch. IV, Building and Rental Codes, and Ch. XIX, Zoning and Land Development, respectively.
d. 
Should there have been any reduction to the assessed value to the property within the two years prior to the application date for exemption the application shall be denied.
e. 
The exemption from Borough real estate taxes shall be limited to the assessed valuation attributable to the new construction or improvement for which an exemption has been requested in the manner set forth in this Part and for which a separate assessment has been made by the Centre County Assessor.
f. 
Improvements to commercial property shall be eligible without regard to whether such property qualifies as deteriorated properties, provided that said improvements are construed within deteriorated properties.
g. 
The new assessment value will not be applied to the property until occupancy of the building is granted in accordance with applicable building codes.
h. 
The exemption from taxes hereunder shall be forfeited by the applicant and/or any subsequent owner of the real estate for failure to pay nonexempt real estate taxes by their due date that may be paid without penalty. Upon receipt of notice of nonpayment of nonexempt real estate taxes, the Borough Manager shall direct the County Assessment Office, the School District Business Office and the Borough Finance Department to discontinue the exemption.
i. 
In any case, after May 6, 2019, where deteriorated commercial property is damaged, destroyed or demolished, by any cause or for any reason and where the assessed valuation of the property affected has been reduced as a result of said damage, destruction or demolition, the exemption from real property taxation authorized shall be limited to that portion of new assessment attributable to the actual cost of improvements or construction that is in excess of the original assessment that existed prior to damage, destruction or demolition of property.
a. 
The schedule of real estate taxes to be exempted shall be in accordance with the below portion of improvements or new construction to be exempted each year:
Length
Portion
1st year
100%
2nd year
90%
3rd year
80%
4th year
70%
5th year
60%
6th year
50%
7th year
40%
8th year
30%
9th year
20%
10th year
10%
After the 10th year
Exemption terminates
b. 
The exemption from taxes shall apply to the tax year of this local taxing authority immediately following the tax year in which the eligible new construction or improvements is or are completed and obtained an occupancy permit as set forth in § 17-1204, Subsection g. Nothing in this Part is intended to limit, prohibit, nor shall it be construed as limiting or prohibiting, the levy of interim real property taxes upon new construction or improvements prior to completion of the new construction or improvements.
c. 
If an eligible property is granted tax exemption pursuant to the LERTA Program, the improvements or new construction shall not, during the exemption period, be considered as a factor in establishing assessment values for other properties.
d. 
If an eligible property is granted an exemption and the property undergoes a successful real estate assessment appeal during the time of the abatement and reduces the property's assessed value, the abatement value would be reduced correspondingly.
a. 
Any person or entity desiring tax exemption pursuant to the LERTA Program must apply to the municipality of State College prior to or at the time of obtaining a building permit for new construction or improvement. Applicants shall also provide a copy of the exemption request to the Centre County Assessment Office on the same day it is submitted to the Borough. Applicants shall also file a copy of the exemption request with the Business Office of the State College Area School District.
b. 
Appeals from the reassessment and the amount eligible for the exemption may be taken by the taxpayer or the local taxing authority as provided by law.
c. 
The cost of new construction or improvements to be exempted from Borough real estate taxes under this Part and the schedule of the Borough real estate taxes exempted existing at the time of the initial request for tax exemption shall be applicable to that exemption request, and subsequent amendment to this Part, if any, shall not apply to the adoption of such amendment.
d. 
The application must be in writing, utilizing the LERTA Program application form, setting forth the following information:
(1) 
The date the building permit was issued for said improvement as new construction.
(2) 
The location of the property.
(3) 
The current use(s) and proposed use(s) of the property.
(4) 
The type of improvements or new construction.
(5) 
The summary of the plan of the improvements or new construction.
(6) 
The actual cost of the improvements or new construction verified by a Pennsylvania registered design professional.
(7) 
Whether or not the property has been condemned or cited by any governmental body for noncompliance with laws, regulations and/or ordinances.
(8) 
The property has been inspected and examined by a Pennsylvania registered design professional acting on behalf of the Borough. The cost of such inspection shall be reimbursed to the Borough by the applicant, regardless of whether or not the application is approved.
(9) 
Such additional information as the Borough may require.
e. 
The cost of improvements or new construction to deteriorated commercial properties to be exempted and the schedule of taxes exempted existing at the time of the initial request for tax exemption shall be applicable to that exemption request, and a subsequent amendment to that portion of the Borough Code of Ordinances as it applies to the LERTA Program, if any, shall not apply to a request initiated prior to its adoption.
f. 
Each person or entity, or such person's or entity's subsidiaries, affiliates or other associated holdings, making application for and receiving exemption under the LERTA Program agrees, that upon completion of the ten-year exemption schedule, not to take any appeals for reassessment for a period of an additional five years.
g. 
No person or entity, or such person's or entity's subsidiaries, affiliates or other associated holdings, will be eligible for exemption under the LERTA Program unless all property taxes are current, there are no outstanding municipal liens against the property, and all fees for municipal services (including, but not limited to, water, sewer and trash services) are current for all properties such person's or entity's, or such person's or entity's subsidiaries, affiliates or other associated holdings owns in the Borough.
h. 
No assessment appeal reducing the property assessment has been granted within two years prior to the filing of a LERTA application.
i. 
A copy of the exemption request will be forwarded to the County Board of Assessment Appeals by the Borough Manager. Within 60 days, the Board will, after completion of construction, assess separately the improvement and the land upon which the new construction stands and calculate the amounts of the assessment eligible for tax exemption in accordance with the limits established by the LERTA Program and notify the taxpayer and the local taxing authorities of the reassessment and amounts of the assessment eligible for exemption. This reassessment is required by the application of the LERTA abatement, and any applicant applying for the abatement explicitly agrees that it does not constitute a spot reassessment. Reassessment will be applied to the improvement that has been made as part of the LERTA application.
a. 
An application for exemption from Borough real estate taxes may be made at any time within five years from the effective date of this Part.
b. 
Termination of the exemption will occur if a property with a LERTA application is converted to a noncommercial use during the ten-year LERTA period of exemption and the graduated assessment would cease.
The Borough may, by ordinance enacted from time to time, extend the time for filing an application from exemption from Borough real estate taxes. However, in no event shall any one extension period exceed five years.
The exemption from local real estate taxes provided for herein shall be forfeited by the taxpayer and/or any subsequent owner of the real estate for the failure to pay any nonexempt real estate taxes by the last day of the time period to pay such taxes without penalty. Upon receipt of the notice of nonpayment of nonexempt real estate taxes, the Borough Finance Department shall discontinue the LERTA exemption.
No more than five applications per year will be accepted for the exemption.
If any provision of this Part shall be determined to be unlawful, invalid, void or unenforceable, then that provision shall be considered severable from the remaining provisions of this Part, which shall be in full force and effect.