Tax Abatement Program Passed in FLAG Communities

PHLF News
October 23, 2009

Property owners in Freeport, Leechburg, and Apollo will have a new incentive to make capital improvements to their buildings now that a tax abatement program has been approved in the three boroughs.

The Freeport Leechburg Apollo Group worked with Freeport, Leechburg, and Apollo boroughs, Freeport Area school board, Leechburg Area school board, Apollo-Ridge school board, the Armstrong County commissioners, and the Armstrong County department of Planning and Development to successfully adopt the Local Economic Revitalization Tax Assistance (LERTA) program. LERTA, which applies to commercial and industrial properties, provides a property tax abatement schedule to improvements made to a given property.

The local taxing bodies agreed to a 10 year abatement schedule, where 100% of the property taxes are abated for the improved portion of the building in the first year, and then by 10% less each subsequent year so that by year 11, property taxes are collected on the full assessed value of the property.

The value of the LERTA program is that there is no decrease in current tax revenue for a given property. The local taxing bodies will continue to collect what they have been, but now there is an incentive for property owners to make improvements to their buildings because they do not need to fear their improvements will immediately result in higher property taxes.

Of the seven local taxing bodies that collect property tax (three boroughs, three school districts, and the county), all but Leechburg Area school district adopted LERTA. Leechburg school district amended a tax abatement program they already had in place to be consistent with the LERTA tax abatement schedule.

Rich Palilla, Executive Director of the Armstrong County department of Planning and Development, feels the LERTA program is a good economic development tool that Armstrong County has been a strong advocate for; “The Armstrong County commissioners have been a vocal advocate for the LERTA program because it gives communities a real economic development tool to use to help existing property owners and attract new ones. Several years ago the commissioners adopted a policy that the county would adopt LERTA ordinances for any borough that adopted a LERTA resolution. Roughly 25% of the boroughs in Armstrong County have now adopted LERTA and we are pleased with the amount of reinvestment that has occurred as a result”.

The new tax abatement program is one that the Freeport Leechburg Apollo Group (FLAG) hopes will compliment their efforts to revitalize the downtown districts of its three member communities. FLAG administers a façade grant program that business owners in the three towns can utilize to make improvements to their buildings. The group has had a lot of interest from local businesses and property owners already, and feels that LERTA will encourage even more property and business owners to make improvements to their buildings.