A tax savings bonanza awaits those who build housing -- or significantly improve residences -- Downtown and in 28 other neighborhoods. Act 42, a 10-year tax abatement program recently passed by the city and Pittsburgh Board of Public Education to encourage new housing development and substantial rehabilitation of existing houses, offers a tax break up to $6,180 annually -- or $61,800 over the 10 years -- based on current millage rates.
The program, first introduced by Mayor Luke Ravenstahl in February, can be of particular value Downtown, where the city has focused redevelopment efforts on new housing, including condominiums, experts say. In addition to Downtown, neighborhoods eligible for the tax breaks are: Allentown, Arlington, Beltzhoover, California-Kirkbride, East Allegheny, Elliott, Esplen, Fineview, Hays, Hazelwood, Homewood North, Homewood South, Homewood West, Knoxville, Larimer, Lincoln-Lemington/Belmar, Lower Lawrenceville, Manchester, Marshall-Shadeland, Mt. Oliver, Perry South/Perry Hilltop, Sheraden, Spring Garden, the Strip District, the Upper Hill District, Upper Lawrenceville, Uptown and the West End.
Chris Pretsch said he was able to pay about $200,000 more for his condo unit at Millcraft Industries Inc.'s Piatt Place development Downtown because of the program.
"I wanted to live Downtown because of the convenience it provides me for work, restaurants and entertainment," said Pretsch, 42, a portfolio manager for Staley Capital Advisors in One Oxford Centre, Downtown.
Pretsch will save $2,700 a year from the city and $3,480 from the school district, based on their current millage rate of 10.8 in the city and 13.92 from the school board. That's based on the exemption, which covers the first $250,000 of assessed value of a condo unit. A unit's assessed value over that amount is taxable. If Allegheny County approves the abatement, it would add another $1,172.50 in savings, based on its 4.69 millage rate. That could mean a combined total of $7,352.50 annually.
"We are currently reviewing and considering our participation in the program, but have made no decision at this time," said County Chief Executive Dan Onorato. Exempted from the program Downtown is any area designated as a Tax Increment Financing District. Piatt Place received this financing, but it covers only the original structure, the former Lazarus-Macy's department store.
"The 65 condominiums at Piatt Place will be built atop the building in 'air space' that was not included under the special financing and thus, qualifies for the abatement," said Lorrie A'ndrea, of Heartland Homes, sales manager for the condominiums.
To qualify for the program, a building permit followed by an application must have been obtained from the city on or after July 1, 2007. Applications will be accepted through June 30, 2012.
The July 1 date was established too late to cover the recently completed 151 FirstSide condo development or at the Carlyle, the former Union National Bank Building at Wood and Fourth where developer David W. Bishoff of the E.V. Bishoff Co. is developing 60 condos. Bishoff has met with city officials concerning the effective date.
In a letter sent to Carlyle representatives, he wrote "They (the city) were also working to formulate a plan to include all of the downtown pioneers in the tax abatement of which the Carlyle residents are certainly a part."
Deposits have been taken on 30 of the 60 units planned there, said Liz Caplan of Coldwell Banker Real Estate, who is handling sales. The city is researching a legal way to include the Carlyle and others who may have missed the deadline, said Ronald H. Pfordehirt, assistant city solicitor. Also under way is the conversion to condominiums of the building at 941 Penn Ave.
Developer Jack Benoff of Solara Ventures, based
Source: PittsburghLive.com