Mayor Jim Kenney announced today that the University City Keystone Innovation Zone (KIZ) received state approval to expand its existing boundaries to include the burgeoning tech community in Old City, including the area along N. 3rd Street known as “N3rd Street.”

The development is expected to bolster the growth of tech companies in Old City. The expansion would enable a new swath of startups to access up to $100,000 annually in sellable  tax credits. The state could award as much as $1.2 million in credits to newly eligible companies within the expanded zone in 2017.

According to StartupPHL, many companies who’ve been awarded the tax credits invest the funds in new workers while others purchase equipment to further develop and commercialize products and technologies.

“Thanks to this expansion, the University City KIZ will be better equipped to accommodate and support the cluster of tech startups in Old City while helping to attract and retain even more early-stage companies in Philadelphia,” said Stephen S. Tang, president & CEO of the University City Science Center.

The University City KIZ was established in 2004 by the state and the Ben Franklin Technology Development Authority. The geographically-designated zone was designed to create a “knowledge neighborhood” that develops tech-friendly business communities. Over the last 10 years, 48 University City KIZ companies have benefitted from about $8 million in KIZ tax credits. The University City KIZ is a partnership of local unviersities and private organizations.

Today’s development  is the latest in a series of steps recently announced by Hizzoner to bolster small business in the city.

During his budget address to City Council on March 3, Kenney’s proposed 5-year plan includes a reduction in the Business Income and Receipts Tax to 6.15% and including the exemption of a business’s first $100,000 in gross receipts. (The current rate is 6.39% and the exemption is $75,000.)

Kenney also proposed reducing the wage tax to 3.33% for non-residents and 3.73% for residents by fiscal year 2021, bringing it to its lowest rate since 1975. The mayor also proposed a $1-million increase in the Commerce Department’s Economic Stimulus Program.

The mayor said the tax reductions and additional stimulus funding would not happen unless Council passed a proposed soda tax. (More on that in a subsequent post.)