Old City just got a major boost with the expansion of the University City Keystone Innovation Zone (KIZ) across the Schuylkill River and all the way to Front Street -- that means some major new tax credits for the neighborhood’s burgeoning tech sector.
Old City-based
Arcweb Technologies hosted the March 23 announcement, with featured remarks from
University City Science Center President and CEO Stephen S. Tang, Arcweb CEO Chris Cera, and Mayor Jim Kenney.
If you go into a coffee shop near North 3rd Street in Old City -- or as it’s affectionately known, "N3rd Street" -- and "grab somebody that’s sitting there, most likely they’re a technology worker," said Cera. "I don’t think that’s found anywhere else in Philadelphia."
And he went further than that: "My 10-year outlook…is that this is going to be the tech center of Philadelphia, here in Old City."
Expanding that University City KIZ should contribute to that growth, which Tang called "a pivotal moment in our city’s transformation from a manufacturing economy to an innovation economy."
Former Pennsylvania Governor Ed Rendell instituted the
KIZ program "to spur entrepreneurial activity," Tang explained. There are 29 KIZs across the state and three within the City of Philadelphia: the large
BioLaunch 611+ zone that spreads north of Lancaster and Girard Avenues and I-95; the
Navy Yard KIZ, and the newly expanded
University City KIZ.
A KIZ is a special district that offers tax incentives to eligible for-profit companies in the life sciences and technology sectors. The program offers a statewide pool of $25 million toward the credits. An approved KIZ company (applications must be submitted by September 15 of each year) can claim a tax credit equal to 50 percent of its increase in gross revenues in the most recent taxable year over the revenue from the preceding year, earned within the KIZ. This tax credit is capped at $100,000, and for companies whose credit exceeds their tax liability, the credit is saleable for up to $0.90 on the dollar.
In the last decade, 48 early-stage tech and life science companies in the University City KIZ have received almost $8 million in tax credits, with 21 companies nabbing close to $2 million just last year. Now this benefit will extend all the way across the heart of Center City and into Old City.
(For a look at one University City company reaping the KIZ benefit, check out
our profile of Graphene Frontiers, working towards big changes in medical diagnostics.)
"As a result of these tax credits, startups are retaining jobs, hiring new employees and developing new products," said Tang. "Not only are KIZ tax credits being invested in our local economy, but they’re also strengthening Philadelphia’s innovation ecosystem."
"It’s very exciting to see what’s happening in Old City," added Mayor Kenney. "The expansion of this [KIZ] will help propel that even faster and further than it has in other parts of the city."
Arcweb is just one company standing to benefit from the change.
"I didn’t want to have a tax credit make me move across town, from people and a place that we call home," said Cera. "I’m glad that we chose to stay and invest here."
Writer: Alaina Mabaso
Sources: University City KIZ expansion launch speakers