This article originally appeared in Good Day, Berks — Spotlight PA’s free daily newsletter for Berks County and your daily dose of Berks County essentials. Sign up here.
READING — State Rep. Manny Guzman (D., Berks) pressed his colleagues and local officials to think of Reading’s potential as they walked down Penn Street on a hot July day.
Guiding the group in and out of some of downtown’s formerly bustling businesses as bits of rock and dirt crunched under their feet, Guzman explained how the city’s newest tool to incentivize projects will help restore dilapidated buildings.
Success, however, will depend on the city’s ability to pitch it to developers.
Pennsylvania approved the city’s application for a “City Revitalization and Improvement Zone” designation in late 2024. Casually referred to as “the CRIZ,” the program creates zones in Reading where state and local taxes generated at businesses get funneled back into the area through special projects.
City officials are counting on the CRIZ to generate money to accomplish broader development goals and spur economic success for businesses. The designation lasts 30 years, which officials say may be the time needed to see significant change.
Inside the Reading Trust Company building, which used to house a bank, visitors lifted the collars of their shirts to block the smell of mildew. Holes gaped in the ceiling; paint flaked off the walls; pigeons flew around the center of the skylight.
It eventually could become a mixed-use project in the heart of downtown, Guzman said.
“We wanted to show you what is possible,” Guzman told the group.
Here’s what to know about how the CRIZ could work and the many factors its success depends on.
What does CRIZ mean?
CRIZ refers to a state-designated City Revitalization and Improvement Zone. Four other places have one: Bethlehem, Erie, Lancaster, and Tamaqua Borough.
It means a portion of state and local taxes collected within certain zones will be used for projects in Reading, not sent to Harrisburg to be distributed for state needs. Qualified taxes include personal income, hotel occupancy, and corporate net income.
The zones comprise a collection of properties spanning 130 acres in the city, including the former Glidden paint factory, parts of downtown, and the former Dana Corporation plant.
Who decides how tax money is spent in the CRIZ?
When the tax money comes back to Reading, it is placed in the CRIZ fund. Developers and business owners can apply for different types of assistance, as long as the projects are within the CRIZ boundaries and meet the city's guidelines.
The CRIZ Authority board oversees the fund. The board has been meeting regularly since January and currently meets on the fourth Thursday of each month in City Council chambers.
Reading Mayor Eddie Morán, state Sen. Judy Schwank (D., Berks), and Guzman each have nominating power to the CRIZ Authority board, which has nine members. The group chooses which projects to prioritize for funding.
The state must also approve the projects after the board.
How does the CRIZ Authority choose what projects get funded?
The authority is still in the process of creating guidelines to help determine what kind of projects may be eligible for funding and the application process to earn it.
The basics, however, were spelled out when the CRIZ was approved: debt service payments on new construction projects; renovation of existing buildings; or infrastructure improvements.
Peter Rye, the city’s CRIZ Board chair, told Spotlight PA he anticipates they’ll start accepting project applications by the end of the year. The board likely will start by prioritizing projects that would generate substantial tax revenue and help grow the fund.
Rye said he anticipates the authority will diversify the types of projects it supports as the fund grows, but business owners need to understand the CRIZ is not a simple grant program.
Applicants will need a developed business plan when they apply for funding and understand that the CRIZ could help supplement the projects, he said.
“Our goal is to accelerate redevelopment, not to outright pay for it wholesale,” Rye said.
How much money will Reading get?
Before the money returns to a CRIZ, the state first determines a CRIZ’s “baseline” taxes.
If an area generates $5 million in taxes one year, then $7 million the next, the additional $2 million could go to the CRIZ fund. The city loaned money to the CRIZ to get started, and the fund will only grow as revenue builds in the area.
Lancaster brought in only $130,000 in the first year after the state established the baseline, CRIZ Acting Managing Director Jeremy Young told Spotlight PA. Young said there was a correction to how the revenue above the baseline was determined the following year, allowing the city to bring in about $3.5 million.
“At that point, we were ready to really start supporting big, big projects,” Young said.
The state will tell Reading its baseline later this fall, Rye said.
The state sets a cap of $15 million annually that can come back into the CRIZ fund, and Rye hopes Reading will begin hitting it in about 15 years.
Though it may take time for the CRIZ fund to bring in more revenue, the board will be able to issue bonds or take out loans. The board could also commit to helping a project later in its development. However, any debt must be repaid within 30 years.
“This has to be done very judiciously, so that we have a long runway to give benefits to others in the future,” Rye said.
What could the CRIZ do for Reading?
Multiple mayoral administrations have worked to get a special taxing designation since 2010, said Jack Gombach, Reading’s managing director. The city’s CRIZ plan says the goal is for the new projects to bring in more than $540 million in investments, create 3,000 jobs, and increase property values by 30% over 30 years.
The city hopes to bring in $75 million in public and private investment within the first five years.
The city’s CRIZ plan says the goal is to plan initial projects during the first year, with construction for those projects in the second and third years. Projects focused on Penn Street and rail station redevelopment will get first priority.
Does the CRIZ benefit small businesses?
The CRIZ can help fund redevelopment of aging Reading buildings, which could benefit small business owners. A property owner who wants to expand could come to the CRIZ board with a plan to do so, but Rye advised that the application process is difficult.
The city offered free legal advice on how to report CRIZ-eligible taxes this year.
“But we don't want to leave them behind,” he continued. “This is for everybody who has a viable project.”
Gombach, the city’s managing director, said Reading will consider safeguards to prevent small businesses from getting priced out of their buildings as redevelopment increases property values. Reading also is considering small business programs to help them grow.
Does the CRIZ create housing?
The CRIZ does not prioritize housing projects because they do not bring in eligible revenue, but Gombach hopes that encouraging development will attract more people to live in or near the downtown area.
He expects the mayor’s administration to work within the guidelines the CRIZ board develops, while also establishing safeguards to protect existing residents.
“This is a powerful, powerful tool that gives the city a lot of leverage when talking to developers,” Gombach said. “As well, we want to make sure that we're utilizing that in the people's best interest.”
Will the CRIZ affect my tax bill?
Only businesses, not residents, in the CRIZ zones will have to complete the extra tax reporting forms. Businesses will do their normal annual taxes, but will have an additional CRIZ-related reporting deadline each June.