The York County Industrial Development Authority: How does it work?

Lindsey O'Laughlin
York Dispatch

The renovations at the Yorktowne Hotel are a well-known development project in York City, but city and county residents might not know much about the entity behind the project.

As its name suggests, the York County Industrial Development Authority, which owns the Yorktowne, exists to promote and facilitate industrial and commercial development throughout the county.

But what is an authority, and how does it function?

The state Department of Community and Economic Development defines a municipal authority as a governmental body created to finance and/or operate specific public works projects without relying on the municipality's power to levy taxes — think sewer authority, airport authority or stormwater authority.

Instead of taxes, municipal authorities often collect fees from property owners to pay for operations and services. Tax-exempt entities, such as churches, schools and nonprofit organizations, are still subject to municipal authority fees.

More:York County Solid Waste Authority to change hours, update acceptable materials

More:County property owners would fund proposed stormwater authority

But the YCIDA is not a municipal authority.

Instead, it's one of several local authorities formed under special legislation.

Rather than dealing with public works or utilities, these specialized authorities oversee other projects or services in the public interest.

Special legislation authorities would include, among others, a stadium authority, housing authority, parking authority or industrial and commercial development authority.

Jack Kay, chairman of the authority board, said that because of the authority's eligibilty for certain state grants and its ability to raise private funds for projects, the YCIDA was able to build the York Revolution stadium downtown without incurring any debt.

"A lot of cities have stadiums, but they have a fair amount of debt associated with it, and most of the time that's public debt," he said.

Kay listed several benefits of having a stadium.

York County Industrial Development Authority Chairman Jack Kay stands by posters showing examples of his organization's projects during a press conference at the Yorktowne Hotel Tuesday, Jan. 5, 2016. The YCIDA announced that it finalized the purchase of the hotel and is planning a $20 million renovation for the city landmark. (Bill Kalina - The York Dispatch)

For one thing, there are people coming into the city for baseball games who otherwise wouldn't be visiting downtown York, and those people eat at city restaurants and patronize city businesses.

The other benefit, Kay said, is to attract individuals and businesses to move into the area by offering recreational and social activities.

Origins: The York County Board of Commissioners created the YCIDA in 1967 in accordance with the state's Economic Development Financing Law.

In the authority's articles of incorporation, the commissioners' stated goal was to encourage development and employment opportunities for York County residents through business, manufacturing, research and other enterprises.

The original statute that permits the creation of industrial development authorities doesn't refer to public access requirements for such authorities, but both the Right to Know Law — which mandates public access to records — and the Sunshine Act — which mandates public access to meetings — list authorities of the commonwealth as qualifying public agencies.

Melissa Melewsky, media law counsel for the Pennsylvania NewsMedia Association, said it's good public policy for authorities to abide by state public access laws.

"Given their purpose and their creation and what their goals are, there is significant public interest in what they’re doing," Melewsky said.

More:'Hidden issues': Yorktowne Hotel price tag nearly doubles to $40M; reopening delayed

More:PHOTOS: 18th century remains 'gently' exhumed for Yorktowne project

Function: The authority operates two arms in the community: development and financing.

Kay said the YCIDA acts as a financing conduit that allows businesses to borrow funds with a low interest rate.

This is because the authority qualifies for tax-exempt bond issuance, meaning that as a lending institution, it doesn't have to pay tax on the interest it makes from the loan.

(The YCIDA does not issue loans from its own funds. Instead, the funds come from bank loans or bond proceeds that then pass through the YCIDA.)

When the authority doesn't have to pay taxes on the interest it earns as a conduit issuer of funds, it can offer the incentive of a lower interest rate to the borrower.

"The whole purpose of this is to stimulate and encourage investment that generates jobs and helps the economic vitality of the county," Kay said.

Kenetha Hansen, director of economic development and financing for the York County Economic Alliance, said that if a development project ends up increasing a property's assessed value, that increase would bring additional property tax revenue to the county, school district and local municipality.

A recent YCIDA development project was the Eden Logistics Center, a 755,000-square-foot structure built on the 58-acre property of the former Harley-Davidson Inc. west campus site in Springettsbury Township.

The authority bought and redeveloped the land from the motorcycle company before selling it to NorthPoint Development of Missouri in 2016 for $4.5 million.

NorthPoint Development expected the new center to bring 650 jobs to the area. Post Consumer Brands, manufacturer of cereals such as Honey Bunches of Oats and Fruity Pebbles, later moved into the building.

More:Major cereal maker files plans in Springettsbury

More:Harley-Davidson laying off another 118 in York County

Basics: The authority board has 13 voting members, but currently there are only 12 on the board. Former board member Michael Newsome resigned his position after starting a new job in Harrisburg as secretary of administration for Gov. Tom Wolf, and the York County commissioners have not yet appointed his replacement.

Board members are Kay, Eugene Draganosky, Alvin Hayes, Patti Stirk, Douglas Becker, David Brinton, Kerryn Fulton, Pamela Gunter-Smith, Oliver Hoar, Chuck Noll, Cindy Page and Coni Wolf.

The YCIDA has a contractual agreement with the York County Economic Alliance for the alliance to provide staff services for projects, including the Yorktowne. 

Board members, who are not staff of the YCEA, are volunteers and do not receive a stipend or payment, Kay said.