Tuesday, April 24, 2012
Tom Corbett, NIZ Deus Ex Machina?
Behind the scenes, the action is fast and furious in legal challenges to Allentown's 130-acre Neighborhood Improvement Zone (NIZ), filed by multiple municipalities and developer Abe Atiyeh. Allentown plans to divert Earned Income Taxes from nonresidents who work inside the NIZ, located in the downtown and along the Lehigh River. Instead of passing this local tax revenue back to surrounding municipalities where these nonresidents live, the money will help pay for a hockey arena, hotel, cigar bar, "wellness " center, offices and other improvements to be made over the next thirty years. Developers like Atiyeh are upset that NIZ developer J.B. Reilly is luring other LV businesses into the subsidized rents within the NIZ, which will depress their own property values and reduce the tax base.
The Offers and Counter-Offers
So far, eight local governments have agreed to support a legal challenge being spearheaded by Hanover and Bethlehem Townships. Tonight, Palmer Township might join the party. Developer Abe Atiyeh's lawsuit mirrors the municipal challenge, which attacks the constitutionality of the NIZ statute as special legislation that could only ever apply to Allentown.
Allentown has offered to settle the challenge by allowing affected townships to keep the EIT from current residents who work within the NIZ. But the Queen City would keep the EIT for any employees lured there by J.B. Reilly. For the next thirty years.
Thanks, but no thanks, say townships. They have responded with a counter-proposal. Keep the EIT, they say, but restrict the NIZ to the downtown area.
No dice, says Allentown, which wants that riverfront.
Pawlowski wants Callahan to Suffer For No Vote
In an effort to put the pressure on the Townships, Pawlowski had numerous state legislators like Lisa Boscola call Township officials. He also had the bright idea of getting the LVEDC to support his proposal last week. But in a meeting marred by numerous absences, Bethlehem Mayor John Callahan refused to give King Edwin a carte blanche.
The Allentown Mayor went apoplectic.
King Edwin has reportedly decided to pay Callahan back by offering Easton Mayor Sal Panto a boatload of money to run for Northampton County Exec. You see, in addition being King, Palwowski is also a Kingmaker, at least in his own eyes.
Panto's campaign confirms that they've heard that story, too, but have yet to be approached by Pawlowski. "We will take money for the right reason," a highly placed campaign aide tells me "This is not one of them."
Tonight, Allentown will make a new proposal to Hanover Supervisors in executive session. This proposal will be repeated to Bethlehem Township Commissioners on Wednesday.
Whatever it is, it might be academic. The battle could be over.
You see, Governor Tom Corbett went ballistic himself when he learned about the NIZ legislation, which was first adopted in 2009. His office has contacted attorneys to inform them that, in his view, the NIZ statute as drafted in unconstitutional and needs to be re-written.
Do Townships have an obligation to make concessions on a NIZ that the Governor himself considers unconstitutional?
Pawlowski Files a SLAPP Suit
But what does the Governor know? Allentown Mayor Ed Pawkowski on Monday filed an obvious SLAPP suit against developer Abe Atiyeh, demanding $150 million for interfering with his grand plans. In the Allentown Mayor's world, a private citizen apparently has no right to petition his government for the redress of grievances, a right guaranteed by the First Amendment. There is no right to challenge the constitutionality of a statute, either. Rex non potest peccare. The King can do no wrong.
The obvious purpose of Pawlowski's suit is to chill public participation in, and open debate on, the NIZ. To make sure everyone gets the point, Pawlowski accuses Atiyeh of a conspiracy "with others as yet unknown," i.e. the other municipalities and other developers.
This tactic works well with his rubber stamps on Allentown City Council, but it's pretty stupid outside the limits of the City Without Limits. And given the Governor's recent pronouncement, it's hard to avoid the conclusion that Abe now has reason to file another suit, this time for attempting to interfere with his constitutional rights.
The Cupboard is Bare
In the meantime, the City is fast running out of money. It has borrowed $55 million, but has entered into contracts for $250 million. It has ordered all the structural steel needed for its new arena, but can't pay for it.
All Pawlowski has to show right now is a big fat hole in the ground, where once upon a time, there were thriving businesses.
At the rate things are going, the Phantoms might be just that in Allentown. Specters. In fact, one unconfirmed rumor out there is that Brooks Brothers is now eyeing up South Bethlehem again.