Friday, April 27, 2012

No White Smoke in NIZ Conclave

Although the College of Lehigh Valley Developers conducted a NIZ conclave yesterday for more than six hours, but there was no plume of white smoke following their meeting at the Best Western off Route 512. Nobody's quite ready to say "Habemus NIZ!" At least not yet.

Although Allentown Mayor Ed Pawlowski had wanted to come, he was a no show. But NIZ developer J.B. Reilly gave a 90-minute presentation, insisting he had no intention of poaching other Lehigh Valley businesses for the subsidized rent within the NIZ. even though the only businesses inside the zone come from other LV areas.

Here's a rundown on what happened.

1) A Philadelphia lawyer has been hired, and has been tasked with researching the formation of a corporation for the developers. That way, if developers decide to sue, they can hide behind the corporate veil and avoid personal liability from any Pawlowski countersuits.

2) J.B. Reilly concedes he did no research on the market for office space.

3) In addition to claiming that most of tenants will not be from outside the Lehigh valley, Reilly pointed out that the Lehigh Valley Health Network will be bringing new, not existing jobs, when it moves into a wellness center at the arena.

4) Reilly argued that office tenants are using the NIZ to negotiate better deals but denies poaching. He did acknowledge recruiting an accounting firm from The Frederick Group, but justified that because the firm does his own accounting

5) Reilly insists he has to put up 25% of the equity for each project in which he is involved, and must personally guarantee repayment of the bonds.

6) Only 26 acres of the Riverfront portion of the NIZ can be developed, amounting to about 800,000 sq ft

7) State Senator Bob Mensch attended the meeting, and was sympathetic to developers. He indicated he is not particularly fond of the NIZ, but does not want to see an open it in downtown Allentown.He indicated that he has lots of questions for State Senator Pat Browne, and this matter is on the Governor's radar.

8) Bethlehem Mayor John Callahan indicated his first obligation is to Bethlehem, and spoke out forcefully against the "unfair competition" created by the NIZ.

9) Participants discussed using "alternate financing' to raise funds for NIZ projects.

10) Developers will likely decide on a course of action within the next tn days to two weeks, but have no intention of telegraphing their next move. Rejecting my papal analogy, one of them claimed it's more like the Second Coming.

"The day of the Lord will come like a thief in the night."

I see.

Well played, Mayans.

37 comments:

Anonymous said...

Good for John. At least one Mayor has some balls.

Anonymous said...

Callahan is acting like a big baby. Bethlehem hardly has any vacant office space and nothing new is proposed. No one is even considering using Martin Tower for commercial use.

He's just worried Bethlehem will have to share the spotlight. Bethlehem will be fine, the Christmas city is much bigger than John Callahan.

Anonymous said...

Anon 725am - since there are no current plans for Martin Tower you exclude it from vacant space?

Yeah, that's accurate.

Anonymous said...

Let me get your Republican politics straight:

A. It's perfectly allowable and expected that private business be able to move freely to where they can achieve the highest ROI due to local taxation.

B. It's perfectly NOT acceptable that a city create conditions to lure business.

It's like a chicken and egg thing. I know this blows the minds of those who can't think their way out of a Beetle Bailey comic.

Anonymous said...

@ 8:59:

The problem with your statement is that you are overlooking the considerable government intervention into the market with the NIZ.

The NIZ is an example of Keynesian economics which just doesn't work anymore in the United States or anywhere for that matter. It's government provided fiscal stimulus, and a very specific stimulus directed at Allentown.

When the government gets involved in manipulating the market, good things usually do not follow.

Anonymous said...

Let me get your Dummyrat politics straight :

It's okay to ram bullcrap such as Obamacare and $ 160.0 million dollar Palaces of Sport down people's throats.

Only after a bunch of back-room deals and lie after lie after lie in public, of course.

"Shut up and get on board - or else!"

Screw your stupid hockey rink, Anon 8:59. Screw the Democrat Chairman Pawlowski. Screw the all-Democrat Rubber Stamp Council of Apparatchiks.

GIMME FREE HOCKEY TICKETS NOW!!!

Anonymous said...

The Phantoms and the NIZ Cheerleaders can go puck themselves.

Anonymous said...

Callahan knows what he is talking about on this one. You can not deny the negative impacts the NIZ will have on any FUTURE plans to redevelop Martin Tower and the rest of the region (not just Bethlehem).

7:25 What does Bethlehem sharing the spotlight and the Christmas City being much bigger than John Callahan have anything to do with the NIZ? What is fair is fair, and the only fair thing about the NIZ is it is specialty legislation that eliminates any chance of NorthCo, Easton, Bethlehem, the rest of Lehigh County from getting a fair chance at any outside companies looking to move into the region.

Monkey momma said...

Why didn't Ed show????

Bernie O'Hare said...

Don't really know. Lots of campaign contributors.

Anonymous said...

Is Callahan a Developer ? How did he get invited?

Bernie O'Hare said...

I suspect any elected official who wanted to be there was welcome. He did not duck it, and I was surprised pleasantly to see Senator Mensch was there, too.

Anonymous said...

Campaign 101: Callahan protecting all Northampton County Municipalities. Way to go John!

Bernie O'Hare said...

7:25, You're off the wall, dude. The NIZ isn't just about office space. It might be focused on that now, but it can be used to fund retail, residential, and even industrial as well. Mayor Callahan's position opposing the NIZ for its negative impact on the marketplace - especially the City of Bethlehem and its future ability to redevelop not only Martin Tower, but also the former Bethlehem Steel works land - isn't about "jealousy" or concern for just office development, it's about all development. I am happy that the Mayor and Joe Kelly got to the meeting yesterday.

zoid said...

Pawlowski was probably in his office behind closed doors shining up his gold hockey puck that will never see the ice.

zoid said...

Pawlowski was probably in his office behind closed doors shining up his gold hockey puck that will never see the ice.

Anonymous said...

Bernie -

I have to question the appropriateness of Reilly speaking for an hour and a half.

Yes, he is the biggest developer in the NIZ to date, but wasn't the NIZ supposed to benefit more than one developer? Whatever Reilly states or agrees to really has little or nothing to do with how another developer in the NIZ might operate.

For the "College of Developers" to in any way use Reilly's statements to decide not to proceed would seem a bit imprudent on their part.

Maybe the reality is that the zone is about the benefit for (primarily) one developer, and no one else could go to the meeting and (somewhat believably) explain the NIZ. That the Mayor, or anyone from the NIZ Authority did not attend or attempt to attend is telling.

Anonymous said...

Palowski deserves credit for trying to do something bold for Allentown. It you came to the CUNA event at the Zion Church on Wednesday you would have seen that lots of people support the NIZ and the hocky agreement, they just want the community to be included in the community benefit agreement.

Anonymous said...

Wait, don't the brown fields of Bethlehem Steel have tax breaks for businesses willing to move there?

Anonymous said...

There really is little benefit to building a residential development in the NIZ.

Anonymous said...

Was Sara Hailstone listening outside the door again?

Anonymous said...

Anonymous said...
Let me get your Republican politics straight:

A. It's perfectly allowable and expected that private business be able to move freely to where they can achieve the highest ROI due to local taxation.

B. It's perfectly NOT acceptable that a city create conditions to lure business.

It's like a chicken and egg thing. I know this blows the minds of those who can't think their way out of a Beetle Bailey comic.

8:59 AM
^^^^^^^^^^^^^^^^^^^


Your reasoning is flawed. Your condition B does not acknowledge the difference betweeen a city giving up ITS OWN taxes to lure business and a city using OTHER municipalities to lure business. Atown wants to use my township taxes to lure business away from me, and lower my property values.

Sort of similar to me taking your car without your permission while you are at work to run a taxi service. Your car would depreciate, you would have higher fuel cost. After you find out what I am doing I justify it by saying I need income because I lost my job. Then when you are really angry I agree to give you $1 for every fare I drive.

How would you like that Beetle Baily?

Anonymous said...

The developers did not walk away believing a word JB said. Ed was hiding.

Anonymous said...

No the developers walked away not believing a word JB said. Do both sentences mean the same thing????!

future downtown arena unattendee said...

Stick a fork in Mayor Ed and this project - it is done. I just read the latest article on Lehigh Valley Live about the alleged renegotiated offer to the lawsuit plaintiffs. The handwriting is on the wall. No way they will be able to float those bonds in time, so they can begin the first stages of work. The Mayor knows this, so he will agree to anything to make that lawsuit go away. IT'S ALL OVER!!!

FutureDowntownArenaAttendee said...

So the Salisbury story has been out for some time now. They voted unanimous to not sue the city and support the NIZ. However no blog post from Bernie about it.... how independent of him!

Anonymous said...

Salisbury cave. They were all set to vote to join. Attorney Ashley was all set to file. Somehow they were scared away.

Rumors around the Federal Court House is the US Attorney is looking into the enire matter. Targets are being established.

Anonymous said...

Retired ASD teacher here.

Future -

In the BIG picture, Salisbury's action is rather minor. They are a unique geographic district that wraps around Allentown. They are, for the most part, Allentown itself.

You, and Pawlowski, desperately want this whole thing kept "in house." You obviously realize a wider, less attached, audience will NOT see you through. Should this funding device attract statewide attention, the project is over.

Again I say, build the darn thing!

But. . . keep your neighbors out of any risk. They did not participate in your decision. This is NOT the design of their citizens, not an effort to keep themselves afloat. Apparently, without this plan, without an arena, without new construction, they already feel secure in their community.

Look, if Allentown can't develop itself (to the parameters it sets) without placing risk upon its neighbors, I say, look carefully at your goals. They might be too high for your current state. Your priorities might be misplaced.

Can you appreciate this view, Future?

Yes, or no?

Bernie O'Hare said...

"So the Salisbury story has been out for some time now. They voted unanimous to not sue the city and support the NIZ. However no blog post from Bernie about it.... how independent of him!'


I certainly consider Salisbury's decision to vote against joining the NIZ lawsuit as something worth writing about. If you look at the 7 posts I published today, you can see I've been pretty busy. I am do a weekly round-up about the NIZ and will include Salisbury's decision in that post.

Salisbury's largest employer likely had some "conversations" with Salisbury officials about the potential consequences of joining the suit. Off the record, of course

Anonymous said...

To set the record straight other elected officials were not invited to this thing. This is one of the reasons the project has no crediblity and no chance of success. A debacle at best .

Rolf Oeler said...

Spell creditability correct first and your post will have it.

Anonymous said...

Win win for Callahan. Hey look at me, I hate the Niz and want to protect Bethlehem and "ALL OF NORTAMPTON COYNTY". The guy is going out the door as Mayor and left a fiscal nightmare for his successor. Now it is time to campaign for County Executive.

Does he know where the courthouse is?

Anonymous said...

B'OH Post of 10:50 - Would you be referring to Kingdom Hospital's hegemony and their contemporaneous "covert" involvement with the NIZ.

Perhaps they are confusing market share with access to care. You should set them straight.

Anonymous said...

Atown wants to use my township taxes to lure business away from me, and lower my property values.

Oh my. Please fill me in on how municipalities chipping in for this REGIONAL project will lower your property values. This red-faced fake outrage just gets better and better.

Anonymous said...

Look, if Allentown can't develop itself (to the parameters it sets) without placing risk upon its neighbors, I say, look carefully at your goals. They might be too high for your current state. Your priorities might be misplaced.

Except you fail to address the key point. The taxes collected are from workers who work in Allentown. Should Allentown enact a wage tax instead?

Anonymous said...

Retired ASD teacher here.

Anonymous 9:13 AM.

With the arena project and other N.I.Z. funding offers, the risk of seeing Allentown adopting NEW taxation is VERY high.

First will be an increase in property taxation, next a wage tax, then a request to increase the current E.I.T. You might also see an increase in sales tax, specific to Allentown.

The N.I.Z. funding plan, where-in developers receive funding to pay for their construction cost is open-ended and dangerous. The total amount of project costs will surely grow beyond the current $225 million, as other speculators decide to participate.

Also don't forget, additional Pennsylvania tax revenues will be required to replace usual funds, now held with-in Allentown boundaries, that previously went to enable statewide services.

Anonymous said...

She was seen waddiling away after ajoirnment and there was no nob on the outside of the door