Wednesday, June 27, 2012

Allentown's Rule By Secrecy

Back in 2009, when Pennsylvania lawmakers finally adopted a budget after a record-setting 101-day stalemate, State Senator Pat Browne slipped a little piece of language into the Fiscal Code update. Buried amid the definitions of "little cigars" and "cigarettes" was legislation that set aside something brand new - the "Neighborhood Improvement Zone. (NIZ)" Most legislators thought they were voting for a budget. Shrouded in secrecy, that's how the NIZ was born.

This week, state legislators will adopt a new budget, and it's no secret that this will include changes to the NIZ. Is EIT really being removed. Is the NIZ being redefined to make it constitutional?

Your guess is as good as mine because the NIZ still remains shrouded in secrecy. All the complaints about the lack of transparency have fallen on deaf ears.

Months ago, Bethlehem and Hanover Township officials asked to see the Preliminary Official Statement (POS) for the $220 million bond intended to finance the hockey arena. Amazingly, they are still waiting.

I've been assured these are "special tax revenue bons," but are they also backed by the "full faith and credit," i.e. taxing power, of the City or state? If they are, they're general obligation bonds. Will we wait until there's a default until we find the answer?

Don't laugh. According to The New York Times, taxpayers are getting stuck with the tab for parking garages and hockey arenas, even though they never thought they'd be footing the bill.
In Pennsylvania, not only are Scranton and Harrisburg struggling with bond guarantees, but another troubled city, Allentown, is defending itself against lawsuits by surrounding communities, accusing it of a convoluted plan to make their residents backstop an authority’s bonds for a new hockey arena. Construction has stopped on the arena, and residents are living with a big hole in the ground and a cloud of uncertainty.

“It’s a possibility that Pennsylvania does nothing and says, ‘O.K., you’re on your own. You default, and that’s that,’ ” Ms. Reinhart said. “Or it could be that the state intervenes, even though it doesn’t guarantee the cities’ debt explicitly.” The problem, she said, is that the bailout of just one distressed city “is a license for everybody to overspend, on the assumption that they’ll be bailed out.”
That's certainly what's happening in Allentown, where a $220 million hockey arena is nearly three times the going rate for a minor league hockey arena.

It's only money. Thankfully, township EIT will not be wasted on this mess. Instead, we'll spend money that should be spent for children's health insurance.

It will help J.B Reilly get richer

It will help Allentown Mayor Ed Pawlowski's political ambition, although he has damaged that big time.


Doesn't this make you proud to be an American?


Anonymous said...

Why it's criminal I tell ya...

Anonymous said...

Is the re-write hidden from the public again? What doesn't the legislature get? Sen. Btowne needs to publicize the NIZ re-write as boldly as he does his other useless legislation.

When will JB hire the Senator?

Anonymous said...

Any representative who votes for a bill with the NIZ re-write buried in it becomes complicit in it.

The only acceptable remedy is an open discussion and vote on a separate bill.

If your rep votes for this "fix" without open discussion, vote them out! They don't understand right from wrong.

This is the midnight pay raise issue of 2012.

Mark Baker said...

hereford just rescinded their offer for king ed to become animal control officer

jennings is the bathroom in allentown city hall peering into the mirror trying to figure out which face is his

Horney toad said...
This comment has been removed by a blog administrator.
Anonymous said...

lot of broad assumptions here

Anonymous said...

Who will ever vote for Browne again?

Anonymous said...

The whole cast of players disgusts me.

Anonymous said...

Just read an article in the MC that said ACIDA approved a $10 million loan for Butz. The loan is backed by NIZ funds.

Isn't that what the NIZ board is supposed to do? If not, what the heck is the NIZ board for?

Anonymous said...

Retired ASD teacher here.

Despite numerous examples of similar demographic areas with projects like this, all of them with disappointing outcomes, Allentown presses on. Unlike anywhere else, THIS debt service will be well worth it.

In the spirit of Nancy Pelosi, Allentown will just have to build the complex, take on unforgiving debt, to really understand what's in this thing. THIS will be different, you'll see. No need for details.

Thankfully, surrounding municipalities will be somewhat removed from responsibility.

Anonymous said...

Anon 658am, I don't see any assumptions here. What do you mean?

ironpigpen said...

Let's play fair.

The Morning Call has identified the Palace of Sport, itself, as costing $ 158.0 million dollars.

And the total cost of the whole project is the $ 220.0 million dollar figure.

Still, the average cost of a minor league hockey rink built in the last 10 years is reported to be $ 80.0 million dollars.

And, TMC says that no minor league hockey rink costing MORE than $ 100.0 million dollars has ever been built before.

Congratulations, Chairman Pawlowski --- you are a genuine record-smasher!

Anonymous said...

I'm not so sure that banks are going to bankroll the arena to the extent and ease the arena backers believe they will.

And it is easy. All it takes is a budget which the state passes every year. So every year, the NIZ stands the risk of getting pinched.

There is risk that in the future, the NIZ will be nickel and dimed by the state legislature when the state finds out it really wants some of that money back.

Today it's EIT taxes being taken back out. Five years from now, some state legislature wants its money back to pay for human service costs that are only going to go up.

When your repayment sources are all at the mercy of politics, that's a very risky investment.

Anonymous said...

I have every confidence that do-gooder, pro-union Bureaucrats will succeed into strong-arming the Banks for the benefit of the children.


Anonymous said...

The NIZ-zone plan is to Allentown as a tuxedo is to a pig.


Anonymous said...

Retired ASD teacher here.

Good points, 9:33AM. Statewide implications with this kind of deal are still not satisfied. I believe most of the Commonwealth has not analyzed this completely. Lots of new ground here.

It would not be a stretch to see a future state budget that requires some of it's usual income back. No real loyalty in politics.

So far, projects like this one became financial burdens on their host cities. But. . . someone's got hard evidence this will be different.

Anonymous said...

Someone needs to look into this Movie Studio preposed on the Waterfront. It seems like another NIZ back door deal with Pawloasski.

Lighthouse said...

I can't answer 7:43 a.m. ("Who will ever vote for Browne again?") as I do not live in his district. But not residing in his district didn't prevent me from receiving a big glossy invite in today's mail to "Senator Pat Browne's Backyard Barbeque Bash" on July 22, though this "bash" is not at the Grube's backyard--or anyone's really, but at Lone Lane Park in Upper Mac.

Anonymous said...

The movie studio idea is the stupidest thing to come down the pike. Believe it or not, it makes the hockey arena look like a good idea. It's a very amateur filmmaker thinking he can make a name for himself back home. It's been a good THIRTY YEARS since the collapse of the "Hollywood Studio System". Most production is outsourced and locations are chosen based on the kickbacks in the form of tax credits. Now with the elimination of film, the playing field becomes much more wide open, taking out such a barrier to entry.

Since the studio system died years ago, these boineheads think it will rise like a phoenix in Allentown?


Anonymous said...

It's always for the kids but first let me take my cream off the top. Then whatever is left is for the kids and whoever else is dumpster diving that particular day. Nothing like Allentown do-gooder compassion.

Anonymous said...

Are folks allowed to rent a community park for political purposes? Anyone?

Dave said...

Victory in our time! NIZ defunded! Can it be true? MCall headline says the war is over! I sure hope so..