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Gov. Wolf plugs renovation program

Mirror photo by Gary M. Baranec / Gov. Tom Wolf (center) walks through downtown Altoona with area officials Wednesday morning. to promote his proposed Restore Pennsylvania program.

At a convention of the Pennsylvania State Association of Township Supervisors not long ago, attendees wore buttons proclaiming their hatred of unfunded mandates, according to Gov. Tom Wolf, speaking Wednesday in Altoona, where he walked through downtown, promoting his proposed Restore Pennsylvania program.

Restore Pennsylvania would be the opposite of what those township supervisors hate — it would be a funded non-mandate, Wolf told city, county and development officials who walked with him to see several large, blighted buildings that could be rehabilitated if such projects were affordable.

Restore Pennsylvania could help make them affordable by closing the gap between the cost of debt service and the renovated buildings’ ongoing revenue potential, according to Wolf, whose $4.5 billion, four-year infrastructure plan to correct blight, deal with flooding, promote gas-dependent business, improve transportation and expand broadband access would be funded by imposition of a severance tax on gas drilling.

Restore Pennsylvania would help projects like the renovation of Altoona’s old downtown buildings by providing “patient capital” — loans with delayed payback schedules, according to Wolf.

Those kinds of projects can create a kind of urban living environment in high demand nowadays, where home, work, shopping and dining are all within walking distance, said Wolf.

Texas, Louisiana, Oklahoma, Wyoming, Alaska and many others states impose a severance tax, and Pennsylvania should too, according to Wolf.

But Republicans don’t agree with adding the tax, and that’s the obstacle Wolf will need to overcome to realize his ambition.

The Republican majority in the House definitively opposed the tax when Wolf proposed it in his budget address in January, and as far as he knows, that hasn’t changed, said Rep. Lou Schmitt, R-Altoona.

Gas drillers already pay a state-mandated impact fee and the state corporate income tax, so a severance tax would make an unfair third taking, according to Schmitt and Rep. Jim Gregory, R-Hollidaysburg.

That impact fee averages about 5 percent of the wellhead value of gas in Pennsylvania, comparable to the severance fees of other states, according to the website of the Pennsylvania Independent Oil and Gas Association.

Adding a severance tax could motivate drillers to move their operations to other states like West Virginia, Ohio and Texas, and then Pennsylvania would get nothing, Schmitt said.

The governor has good intentions, but there are other ways to provide infrastructure help, Gregory said.

While business growth has brought more life to Altoona’s downtown in recent years, the vacant buildings visited Wednesday — the Penn Central, The Columns, the McCrory and the former First United Methodist Church — represent lots of potential value.

The owners of the Penn Central would like to transform it into a multi-use property, Altoona Blair County Development Corp. CEO Steve McKnight told Wolf.

“(But) we need help,” said Alex Seltzer, son of Irv Seltzer, owner of the Penn Central and The Columns.

McKnight endorsed the general concept behind Restore Pennsylvania without explicitly favoring the project or the means of raising the money to pay for it.

“We greatly appreciated the governor’s visit and continued strong interest in identifying new funding sources for economic development projects, especially complicated adaptive building reuse projects that are so important to our mountain main street communities,” McKnight stated in an email after the visit. “As we have seen with projects like those to date, they require effective public-private partnerships through which patient capital financing sources can be secured.”

Such capital lowers the risk for investors and can help make projects feasible, according to McKnight.

He’s hoping for “continued dialogue” with Wolf’s office and elected officials “to create the policies and programs needed to ensure our local redevelopment efforts continue,” he stated.

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