Coworking in the Pittsburgh Keystone Innovation Zone
Coworking in East Liberty, one of Pittsburgh’s innovation neighborhoods, has many perks. But the Beauty Shoppe’s 6101 Penn location has an additional key benefit: it is in the Keystone Innovation Zone.
If you already knew this, congratulations! If you hear “KIZ” and respond with “Gesundheit”—read on. It could help you make money and grow your business faster.
What is the Keystone Innovation Zone (KIZ)?
The KIZ is a state-run program that aims to support entrepreneurs, accelerate technology research and development, retain recent college grads and contribute to economic growth in Pennsylvania. It does this primarily through tax credits. To get the tax credits, a company has to be in the Zone—which in practice means a KIZ-designated address. There are Zones all over Pennsylvania; The Beauty Shoppe 6101 Penn Ave belongs to the Greater Oakland Keystone Innovation Zone (known by its slick acronym: GO KIZ).
Are Beauty Shoppe members in the KIZ?
Yes. By being a member of our coworking space at 6101 Penn Ave, your company gets the KIZ benefits. You don’t need to sign a lease for a KIZ address; just show proof of membership on the paperwork. If you want to work in East Liberty and take advantage of the KIZ, the Beauty Shoppe is for you.
For-profit companies that are 8 years or younger and are working within one of the targeted sectors. More here.
What exactly do you get?
Money. Companies in the KIZ receive two types of tax credits, one based on revenue growth, and the other based on the dollars invested towards research and development (R&D).
First, companies can receive 50% of their previous year’s revenue increase as a tax credit, for a maximum of $100,000 per year. That’s a big number, and most start-ups won’t need that much in tax credits, but not to worry. There’s a substantial market for tax credits, and with the help of KIZ Resources, our member companies can sell their tax credits at a slight discount on the dollar in exchange for cash.
Second, companies can receive a tax credit equal to 20% of total dollars invested in R&D. And, like the other tax credits, these can be sold on the market in exchange for cash.
Why the KIZ?
Grow your company faster
About four years ago, John Pastor, CEO of Rent Jungle, moved his company into the Riverside Center for Innovation, located in the Pittsburgh Central KIZ. He was sick of working out of Panera and needed real office space. From Pastor’s perspective, it was a no-brainer: take advantage of tax credits, to hire more people, move faster and grow faster. “That was a big part of choosing to locate here in the KIZ, just knowing that we could get tax credits.” They have since moved into a larger space in the same building, and are now a company of 28 people.
There’s help getting started
When Patrick Mittereder ran Electric Owl out of 6101 Penn, KIZ Resources was his connection to the Zone. “Once you’re in it, it's really simple. Every year, they’d ask for our paperwork. They'd send us follow up emails to see if we could apply for any tax credits that year. We’d sign it and send it back.” The credits were crucial for his young company. “We always sold the tax credits. It was one of the things that really helped my company go as long as it has. When it really kicked in, we got credits for a really large amont of money, which helped us generate more sales.” Miettereder has since moved out of 6101, but still recommends the KIZ and KIZ Resources. “They’re all really friendly over there.”
This isn’t true everywhere in Pennsylvania, but in Pittsburgh, the KIZ strategically covers neighborhoods that are targeted for redevelopment. By keeping young people in the city and creating jobs, the KIZ helps companies, which help Pittsburgh. For John Pastor this sweetens the deal. “You certainly can't beat the fact that you're going to get paid to build a business from state tax credits. And there are also altruistic motivations. You can build in a business in an area that has been disadvantaged over time.”
Ready to get started?
Contact the Beauty Shoppe for membership information, and we’ll get you connected with the right resources and people for KIZ credits.