Friday, April 27, 2012
No White Smoke in NIZ Conclave
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."
Well played, Mayans.