HERMITAGE, PA. Tax breaks weighed to entice building

Tax breaks and low-interest loans would be available under the city plan.
HERMITAGE, Pa. -- City commissioners are looking at providing substantial tax breaks as an incentive to get companies to build in Gateway Commerce Park.
The 117-acre planned technical park along Pa. Route 18 is a joint development by the city and KAKE Development Co., with each owning about 60 acres.
There's only one business there now, but Gary Gulla, assistant city manager, outlined two plans for the board of commissioners Thursday that officials hope will draw companies to the site.
Gulla said the city should try to get the park included in the Shenango Valley Enterprise Zone, a move that would require the approval of the Enterprise Zone's board of directors and the majority of its six member communities. Hermitage is one of those members.
Getting that designation would entitle companies moving into the park to low-interest development loans, he said, noting that the current interest rate is about 2.7 percent on five-year loans. The Enterprise Zone has more than $1 million available in its loan pool, he added.
The commissioners indicated they will vote at their meeting Wednesday to ask for the zone extension.
Gulla also proposed that the city extend its tax abatement program for industrial expansion to include Gateway.
Breaks on Broadway
The city offers a six-year tax break on new construction in the current industrial tax abatement area along Broadway Avenue.
That same offer could be made to companies moving into the park, Gulla said, noting the city gives a 100-percent abatement for the first three years, 75 percent in the fourth, 50 percent in the fifth and 25 percent in the sixth.
Mercer County has the same abatement program along Broadway Avenue, and the Hermitage School District has a three-year program there that offers annual tax breaks of 50 percent, 50 percent and 25 percent on new construction.
The county and school district could be asked to extend their abatements to Gateway as well, Gulla said. Commissioners Larry Gurrera and Sylvia Stull support the abatement extension, but Commissioner Joe Augustine doesn't.
"I'm against it," he said, explaining that he doesn't think anyone coming into the city should get such tax breaks.
"If they want abatements, go down on Broadway," he suggested.
Despite his objection, the other commissioners said they will introduce an ordinance Wednesday to extend the abatement area.