The county commissioners voted Monday to approve the operating bylaws of the new Real Estate Collaborative, an offshoot organization of the Cumberland Area Economic Development Corporation.
The REC will be able to buy and sell property, acting as an investment conduit to rehabilitate blighted or outdated real estate that private developers would otherwise be uninterested in backing.
As is CAEDC, the REC will be an independent nonprofit organization, albeit owned by the county. As an independent LLC, however, the collaborative would not incur any liability back on either group.
“I believe I am correct in saying that this would not put any fallback or encumbrance on CAEDC or the county government,” Commissioner Jim Hertzler said.
“That is correct,” confirmed County Solicitor Keith Brenneman.
The commissioners’ only change to the REC bylaws had been to mandate that one of the organization’s five board members be from the Cumberland County Housing and Redevelopment Authorities. A county agency, the CCHRA’s duties and funding mechanisms frequently overlap with CAEDC, and the two are currently working on an agreement to delineate duties.
The CCHRA’s new director, Tim Whelan, supported the creation of the REC and will serve on the board.
CAEDC CEO Jonathan Bowser said the REC would likely be involved immediately in preparing for several funding opportunities that the state is expected to open up this fall. The Pennsylvania Department of Community and Economic Development will likely announce what programs have openings in the coming weeks.
The REC plans to make use of Pennsylvania’s Keystone Opportunity Zone tax abatement system, Bowser said. Properties must be larger, likely multi-use, projects of at least 10 acres. The KOZ designation would exempt from taxes any assessed value added to the property for up to 10 years from the start of the parcel’s redevelopment.
“At this point, we’re just waiting for the DCED to open the program,” Bowser said. “It is mainly a property tax abatement, and the state also offers relief on a business’s net income tax if they develop in a KOZ.”
KOZ designation requires approval from the county, municipality and school district that would be forgoing the tax increases. The topic has not been broached with the jurisdictions in the potential KOZ sites.
“At least one of the properties in the Shippensburg area would be a good fit, but we need to discuss it with the surrounding jurisdictions before we get too far into it,” Bowser said.