PCKIZ Firms Receive More Than $1 Million in Support
Startups Obtain Second-Highest Total of Tax Credits in State
The Pittsburgh Central Keystone Innovation Zone (PCKIZ) will funnel more than $1 million to local startups, and its companies will receive the second-highest tax credit total among the designated economic development areas across the state. “The hope is that our companies will reinvest this funding to bring even more job growth above and beyond the positions they’ve already created. As the economy improves, we’re expecting a substantial increase in jobs,” said William Generett Jr., executive director of the PCKIZ, a venture started in 2007 by Duquesne, Carlow and Point Park universities, the Community College of Allegheny County and 12 other nonprofit, government and business organizations. Substantial financial support has come from the Pennsylvania Department of Community and Economic Development , The Heinz Endowments and the Richard King Mellon Foundation.
The PCKIZ delivered $807,000 in tax credits, the second highest amount statewide received by 26 of the Keystone Innovation Zones (KIZs). Only the I-99 Keystone Innovation Zone in the Centre County area received more.
Also, the PCKIZ reported the fourth-largest number of companies sharing in these tax credit dollars statewide. Ten of nearly 30 PCKIZ companies in the Hill District, Uptown, Downtown, North Shore and South Side areas qualified for state tax credits in December. Six were approved for the $100,000 maximum.
“One of the key foundations and successes of my economic development policy has been leveraging the resources of our world-renowned universities and research institutions to create and expand high-tech businesses and jobs,” said Allegheny County Executive Dan Onorato. “Programs such as PCKIZ build on our efforts and are helping us to create a climate where entrepreneurship and innovation thrive and businesses succeed.”
Companies receiving the tax credits and the amounts are:
- Bit-X-Bit LLC, forensic investigation company, $89,671
- Bright Innovation LLC, industrial research and design firm, $100,000
- Cohera Medical Inc., biomedical company, $78,580
- dbMotion Inc., medical informatics firm, $100,000
- Ebenefits Solutions LLC, human resources consultants, $100,000
- InspectTech Systems Inc., software design, $100,000
- Lechtzer Inc., optical sensor system design company, $37,436
- Mechanimal, graphic design, illustration, 3D modeling and robotics firm, $1,162
- Special Pathogens Laboratory LLC, microbiology lab, $100,000
- Wellspring Worldwide LLC, a technology transfer managers, $100,000.
“The dedication and commitment of the KIZ coordinator and the KIZ partnership is the reason PCKIZ has been successful,” said Sheri Collins, Department of Community and Economic Development KIZ program manager. “PCKIZ has been instrumental in the success of its companies and continues to play a critical role in tech-based economic development in Pittsburgh.”
In addition to adding jobs and diversity among small businesses, the PCKIZ companies have provided students with 46 graduate and undergraduate internship opportunities.
How tax credits work
Tax credits improve cash flow for startups. Generett explained that eligible companies in a KIZ earn tax credits based upon the increase in gross revenue. If, for instance, a new company had no gross revenue in Year 1, but $200,000 in Year 2, it could earn a tax credit for 50 percent of its increase in gross revenue— the $100,000 maximum.
Through brokers, companies can sell the tax credits, generally for 85 to 90 cents on the dollar, to big corporations in the state that want to offset tax liabilities.
“The startups get cash with no restrictions on it, so the tax credit ends up being a cash benefit to these companies,” Generett explained.
Pittsburgh Central Keystone Innovation Zone
The PCKIZ is part of a statewide strategy to tap educational resources to help startup and young technology-oriented businesses, with the goal of providing jobs and economic development. It is based in the Hill District, Uptown and Downtown, and parts of the South Side and the North Side. The efforts of Duquesne University and the Hill House Economic Development Corp. led to the creation of the PCKIZ in 2007. Other founding partners include: the Allegheny Conference, the Allegheny County Department of Economic Development, Carlow University, the Community College of Allegheny County, Heinz Endowments, Idea Foundry Inc., Innovation Works, Institute for Transfusion Medicine, PNC Bank, Pittsburgh Life Sciences Greenhouse, Point Park University, Richard King Mellon Foundation, UPMC Health Plan and the Urban Redevelopment Authority of Pittsburgh. Substantial support is received from the Pennsylvania Department of Community and Economic Development.