The University City Keystone Innovation Zone (KIZ) now stretches across Center City to the Delaware River.
On Tuesday, Mayor Jim Kenney and Stephen S. Tang, the CEO of University City Sciences Center, announced that the KIZ will now include Old City, where a tech hub has been taking root in recent years. Keystone Innovation Zones allow qualifying life-sciences and technology companies to claim up to $100,000 a year in tax credits which can be applied to the companies’ tax bills or sold to other investors. There are three KIZs in the city and 29 across the state, according to Tang. Together, companies can claim up to $25 million in KIZ tax credits in Pennsylvania each year.
Kenney and Tang announced the expansion of the University City KIZ Wednesday morning at Arcweb Technologies near 3rd and Market streets. The office is just off of what’s come to be called N3RD Street, a strip of North Third Street between Market and Girard that’s home to a series of tech companies.
It’s an open office, with some standing desks and a few skylights. While guests waited for the mayor to arrive, a young guy in a flannel shirt and a Subaru baseball cap rocked a stroller back and forth. On a glass coffee table were a copy of GOOD, A Quarterly Journal for the Global Citizen, and a copy of Inc. Magazine (cover story: “Go Ahead, Be Evil: Do you need a social mission? Hell, no. Profit is the mission.”)
Kenney ticked off a list of areas where Philadelphia has been an innovator, including healthcare, education, and democracy. He said he was happy to take credit for a number of initiatives, including the expansion of the Keystone Innovation Zone, which got started under his predecessor, Michael Nutter. He said he feels old when walking around among the young tech workers in Old City, where he lives. The KIZ expansion will help keep the neighborhood diverse and vibrant, he hopes.
Chris Cera, the CEO of Arcweb, predicted that Old City would be the capital of the regional tech industry in ten years.
“What this credit essentially means to us is that we can add one or two high-paying jobs here in Old City,” Cera said.
As Technical.ly reported Wednesday morning, 21 companies claimed $1.8 million in tax credits in the University City KIZ in 2015. The Navy Yard is also a Keystone Innovation Zone, as well as a Keystone Opportunity Zone, another state tax credit program that’s meant to incentivize business development. The entirety of Philadelphia north of Girard Avenue, and including some parts of Bucks and Montgomery counties, is in something called the BioLaunch 611 + KIZ. Life sciences companies in that zone that have been operating for eight years or less can claim the tax credits.