There are a wide variety of incentive financing programs available to help a company that leases space at 100-124 Capital Road. The following is a sampling of those programs most often used by companies that move into CenterPoint.
State Funding Programs
Mericle has worked with the leadership of the Pennsylvania Department of Community and Economic Development and the Governor’s Action Team to help obtain grants, tax credits, and low interest loans for several companies that have relocated into our buildings. We will be pleased to arrange a meeting between representatives of your company and the Governor’s Action Team to discuss the potential availability of incentive funding.
Here are brief descriptions of some of the state grant, tax credit and low interest loan programs often utilized by eligible growing businesses.
Job Creation Tax Credit Program
The Job Creation Tax Credit Program is available to eligible businesses who, within three years from a negotiated start date, create 25 or more jobs or increase employment by 20%. Every new full-time job, up to a set maximum which meets certain minimum wage standards, will result in a $1,000 tax credit that the business can use to pay a number of state business taxes.
The business may claim these credits only after the jobs are created. A minimum of 25% of all tax credits available to be awarded each fiscal year will be allocated to businesses that employ 100 or fewer employees.
In order to be eligible to receive Job Creation Tax Credits, a business must demonstrate leadership in the application, development, or deployment of leading technologies in business operations, and meet either of these requirements:
- Conceives and develops new production or product technology.
- Improves its productivity by incorporating innovative processes.
To be counted as new full-time employees under the JCTC Program, each new employee must earn an hourly wage rate of at least 150% of the federal minimum wage ($10.88/hour), excluding benefits, at the time the certificate is issued.
The business must agree to maintain its operation in the commonwealth for a period of five years from the start date.
The start date will be the first day of the calendar year quarter in which an application is submitted unless the applicant requests and the DCED agrees to a later start date.
A business may claim a job creation tax credit of $1,000 for each new job created up to a specified amount, as approved by DCED. The credit must be claimed within five years of receiving the tax credit certificate, but in no case can it be longer than six years from the start date. Credits not claimed within this period will be forfeited.
A business may apply the tax credit to 100% of the business’s state corporate net income tax, capital stock/franchise tax or the capital stock/franchise tax of a shareholder of the business if the business is a Pennsylvania S corporation, gross premiums tax, gross receipts tax, bank and trust business shares tax, mutual thrift institution tax, title insurance business shares tax, personal income tax or the personal income tax of shareholders of a Pennsylvania S corporation, or any combination thereof. Cash refunds will not be issued for unused credits.
Pennsylvania First Program
Businesses can receive support in the form of grants, loans and loan guarantees for job training, property acquisition, site preparation, land and building improvements, purchasing or upgrading machinery and equipment, infrastructure, environmental assessments and remediation, and working capital.
Businesses must achieve one of the following standards within three years of receiving Pennsylvania First Program funding: (1) create or retain a minimum of 100 full time jobs at the project site; (2) increase their full time employment within the commonwealth by at least 20%; (3) provide a substantial number of new, full time employment opportunities within a high growth industry; or (4) create or retain fewer than 100 full time jobs at project sites that are located in counties or communities suffering from high unemployment.
The program requires participants to commit to operating at the approved project site for a minimum of seven years. Full-time employees must earn at least 150% of the federal minimum wage ($10.88/hour). Loan terms can be up to 15 years for real estate and infrastructure and up to 10 years for machinery and equipment. Interest rates will be set at the time of approval and will be based on the 10-year Treasury rate. Each annual Pennsylvania First Program appropriation must leverage at least $10 in private investment for every $1 of program assistance awarded.
The maximum assistance amount shall not exceed $5,000 for each job projected to be created or retained. DCED has discretion to modify this amount for special circumstances.
The project may not commence prior to the approval of Pennsylvania First Program assistance without the written consent of the DCED to incur project costs. Commencement of work prior to receiving DCED’s approval will result in the project becoming ineligible for funding consideration.
Pennsylvania Economic Development Financing Authority Tax Exempt Bond Program
The Pennsylvania Economic Development Financing Authority (PEDFA) Tax Exempt Bond Program assists in financing land and building acquisition, renovations and new construction, machinery and equipment acquisition and installation, as well as working capital.
Those eligible for the PEDFA Tax Exempt Bond Program are industries such as manufacturing, energy, solid waste disposal, wastewater treatment, transportation facilities, assisted living/housing, and nonprofit 501(c)(3).
The loan amount must be a minimum of $400,000. The borrower, along with its affiliates, together cannot incur more than $20,000,000 of capital costs in the city or municipality of the project during a six-year period beginning three years prior to the date of the bond closing. These capital costs include the current project costs and any outstanding tax-exempt debt. Up to $1,000,000 of tax-exempt financing, including outstanding tax-exempt debt, is allowed without regard to the $20 million capital costs limit.
The loan can be up to a 30-year term but no more than 120% of the depreciable life of the assets being financed. Interest rates are generally 20% to 30% below comparable commercial alternatives. Weekly variable interest rates generally track against the Securities Industry and Financial Markets Association Index (SIFMA), a weekly municipal interest rate index that serves as the industry benchmark.
For each composite pool project, the PEDFA loan amount must be in multiples of: (1) $25,000 if the loan amount is less than $1 million; or (2) $100,000 if the loan amount is $1 million or greater. There are no specified loan increments for stand-alone projects.
While up to 100% of qualified costs may be funded, in most cases lenders or credit banks require a significant equity contribution.
All applications must be submitted online by a local IDA or IDC, which is the “Applicant”, through the Electronic Single Application located at dced.pa.gov.
There are several grant programs available to help you reduce your training costs in CenterPoint. Mericle will arrange meetings between your human resources team and the state and local officials who coordinate the following grant programs:
Guaranteed Free Training Program
The Guaranteed Free Training Program (GFT-WED-netPA) provides grant funding for Essential Skills and Advanced Technology training.
The program’s Essential Skills training is limited to manufacturers and technology businesses, including biotech and environmental-technology companies, and provides up to $450 per trainee and $75,000 per company. Eligible training activities are those that directly improve the essential job skills required for the employee’s current position. These job skills are central to the employee’s position and would likely be found in the employee’s job description.
The Advanced Technology training is available to most companies and provides up to $850 per trainee and $50,000 per company. Eligible training activities will be those that directly improve the advanced technology job skills required for the employee’s current position.
To be eligible for reimbursement, at the time of training an employee must be a resident of and employed in Pennsylvania, earn at least 150% of the current federal minimum wage, excluding benefits, be permanently employed full-time and eligible for full-time benefits, and be an employee of the specific company location awarded grant funds.
Training costs must be “reasonable” as defined by market rates and/or other criteria. Regardless of how it is conducted (classroom, online, etc.), each training session must be a minimum of 30 minutes in length.
Training can be provided by a WEDnetPA partner institution, the company’s in-house staff or any third-party provider.
Workforce Innovation & Opportunity Act
The Workforce Innovation and Opportunity Act (WIOA) program is federally funded and designed to assist dislocated workers or financially eligible individuals with intensive job search and/or training services. To participate in WIOA services you must meet eligibility and program requirements. Local Workforce Development Boards administer the program.
This federal program reimburses employers for part of the cost of training. Through the PA CareerLink® one-stop system, WIOA works to address employer needs by matching them to the skilled workers they need to compete in the global economy.
Career services include unemployment and job search assistance, information on the job market, job readiness, career planning and counseling, programs for non-English speakers, financial aid, supportive services, and financial literacy.
- You have been recently laid-off or terminated from employment
- You are unemployed
- You are collecting Food Stamps or TANF
- You are employed and your income is below the self-sufficiency guideline
- You are a displaced homemaker
- You are homeless
The funds can be used for job search and placement, skills assessment and evaluation, counseling, training services, for individuals and companies, supportive services, and labor marketing information.
On-the-Job Training continues to be a key method of delivering training services to adults and dislocated workers. WIOA provides for states and local areas to provide up to 50% of the wage rate of the participant to employers for the costs of training while the participant is in the program. Additionally, state and local areas have the flexibility under WIOA to increase the reimbursement level to up to 75% taking into account the following factors:
- The characteristics of the participants (e.g. length of unemployment, current skill level, and barriers to employment)
- The size of the employer (e.g. small and medium-sized business often have more barriers to participation at lower reimbursement rates)
- The quality of employer-provided training and advancement opportunities
- Other factors the State or local boards may determine appropriate (e.g. the number of employees participating in the training, wage and benefit levels of the employees (both pre and post participation earnings)), and relation of the training to the competitiveness of the participant).
Other Financial Assistance
Luzerne County’s Business Development Loan Program
Your business may be eligible for low-interest loan assistance through this Luzerne County funding source. Loan funds are available for eligible businesses at an interest rate of 1.5% for terms of 7 or 15 years. The County can finance up to 50% of the eligible project costs up to a typical maximum loan amount of $1 million. County funds will be secured by a letter of credit from a financial institution. Funding will be provided for land and/or business acquisition, construction/renovation activities, purchase of machinery and equipment, and professional and financial fees.
Loans are typically made available at $35,000 per job to be created (typical loan maximum is $1 million). Please note that this program is only offered to projects that occur within CenterPoint and other business locations in Luzerne County. Companies that locate in other counties are not eligible for these funds.
A local industrial development corporation (IDC) must sponsor the loan application on your behalf. The IDC of the Greater Pittston Chamber of Commerce will be pleased to serve as the sponsor.
Foreign Trade Zone
Most of the lots in CenterPoint Commerce and Trade Park have Foreign Trade Zone (FTZ) status. FTZs encourage and expedite import/export cargo movements. These specially designated zones are considered outside the Customs territory of the United States, which means that merchandise can be stored, exhibited, assembled, manufactured and processed without being subject to formal Customs entry procedures and payment of duties — unless and until the merchandise enters the Customs territory for domestic consumption.
- Duty Deferral:
No duty is ever charged on merchandise while it is in a Foreign Trade Zone, and there is no limit on the length of time merchandise may be kept in a Foreign Trade Zone. By deferring the duty, capital is freed for more important needs.
- Relief From Inverted Tariffs:
Generally, if foreign merchandise is brought into a Foreign Trade Zone or Subzone and manufactured into a product that carries a lower duty rate, then the lower rate applies.
- Duty Elimination On Waste And Scrap:
No duty is charged on most waste and scrap from production in Foreign Trade Zones.
- No Duty On Domestic Content Or Added Value:
The “value added” to a product in a FTZ (including manufacture using domestic parts, cost of labor, overhead, and profit) is not included in its dutiable value when the final product leaves the Zone. Final duties are assessed on foreign content only.
- Duty Exemption On Re-Exports:
If merchandise is re-exported after being placed in a FTZ or shipped to another FTZ and then re-exported then no duty is ever paid.
- No Duty On Rejected Or Defective Parts:
Merchandise found to be defective or faulty, may be returned to the country of origin for repair or simply destroyed. Whichever choice is taken, no duty is paid. Many companies suffer from the “double duty crunch.” That is, they pay duty on imported merchandise, find it to be faulty and return it to the country of origin for repair, and then pay duty again when the merchandise reenters the United States. If you are a Foreign Trade Zone user or Subzone, the “double duty crunch” is never a problem, because your merchandise never enters the commerce of the United States.
- Administrative Benefits:
Under Customs laws, a company is required to file a customs entry with each shipment of imported merchandise. This involves several associated costs including the cost of preparing, processing and filing the customs entry. Other costs include external service provider fees and a merchandise process fee (MPF) – a .21% ad valorem fee capped at $485 per customs entry – paid to the U.S. Government. However, under zone procedures, FTZ users are allowed to consolidate shipments from an FTZ to the customs territory of the U.S. into a single weekly entry transaction rather than filing an entry per shipment. This significantly reduces the number of customs entries filed by an importer resulting in significant operational and financial benefits.