LERTA (Sunset Provision 11/21/2012)

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(LERTA = Local Economic Revitalization Tax Assistance)
City Council File No. 15,550, Official Ordinance No. 57-2007
Effective November 21, 2007
Sunset Provision 11/21/2012, unless extended by ordinance duly adopted

In November 2007, the City, School District and County taxing bodies adopted ordinances to provide for a beneficial investment incentive for Commercial/Industrial and Residential properties to continue throughout the City of Erie. This real estate tax abatement program applies to improvements (renovations, new construction, etc) that are completed. The amended real estate tax abatement program identifies target and non-target areas for new residential construction, with 10-year benefit in target areas and 7 years in non-target areas (Refer to Map for Target Area as determined by City Council); providing a 50% abatement for all new, commercial/industrial improvements, with additional abatement for job creation for a 10 year period, a 5 year 90% abatement for all additions/alterations to existing structures. This ordinance also established an Appeal Board to hear cases regarding the benefits given for job creation, and established a five-year sunset provision. Please note that the property owner will continue to pay existing real estate taxes on the property (and an increased level of taxes on a vacant lot that is converted to an improved lot), but they will not be taxed on the improvements until the abatement time period ends.

Improvements means repair, construction or reconstruction, including alterations or additions, having the effect of rehabilitating a deteriorated property, either commercial or residential, so that it becomes habitable or attains higher standards (and increased its assessment) of safety, health, economic use or amenity, or is brought into compliance by laws, ordinances or regulations governing such standards. Ordinary upkeep and maintenance shall not be deemed an improvement.

The Schedule for ‘Residential’ real estate tax exemptions shall be as follows:

  • Homeowners living in a ‘target area,’ primarily the inner city, will receive a 90% tax break for new construction for the first five years; 70% in the sixth year; 50% in the seventh year; 33% in the eighth year; 25% in the ninth year; and 10% in the 10th year. (Refer to Map for Target Area).
  • Homeowners living outside the target area will receive a 75% tax break for the first five years for new construction; 50% in the sixth year; and 25% in the seventh year ending the tax abatement period.

The Schedule for ‘Additions and Alterations’ real estate tax exemption shall be as follows:

Additions or alterations for all building types city-wide shall receive a 90% exemption for a period of five (5) years.

The Schedule for ‘Commercial/Industrial’ real estate tax exemptions, which is on a City-wide basis, shall be as follows:

  • Business and Industry will receive a 50% tax break for a 10-year period for all such physical improvements throughout the City.
  • Business and Industry will receive an additional tax break of 10% to 40%, depending on the number and salaries of jobs created; Full details on the job creation process will be provided upon request.

Special Note on Deteriorated/Demolished Property (Commercial/Industrial, or Residential): 

In any case where deteriorated property (Commercial/Industrial, or Residential) is damaged, destroyed or demolished, by any cause or for any reason, and the assessed valuation of the property affected has been reduced as the result of such damage, destruction or demolition, the exemption from real property taxation shall be limited 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 the property. In the event that a property has been fully demolished by demolition permit, and has remained vacant of any structure after the expiration of one year from the time of issue of the permit, then the assessed value of the demolished improvements shall thereafter not be subject to taxation. 

Board of LERTA Appeals: The LERTA Ordinance provides for the establishment of a Seven (7) member Board of LERTA Appeals, which shall hear all appeals by property owners aggrieved by decisions of the LERTA Administrator. The Board will promulgate a list of rules and guidelines to review each application so appealed.

Processing: To ensure the property owners receive the benefit, the City of Erie files the LERTA Application and a copy of the approved Building Permit with the Erie County Tax Assessors Office on behalf of the property owner prior to the start of new construction/renovations. The City of Erie Zoning Officer and staff members of the City’s Building Inspection/Permits Office will assist property owners and/or their contractors with this process. They may be reached at (814) 870-1313.

Sunset Provision: The provisions of the LERTA Ordinance shall expire on the fifth anniversary of its enactment (11/21/2012), unless extended by ordinance duly adopted.

For more information on this real estate tax incentive, please contact:

Chris Groner, Economic Development Specialist
Phone: (814) 870-1272 or Email: cgroner@erie.pa.us

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