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Tuesday, August 04, 2015

Fed Ed Paid Atiyeh $1.4 Million For Property Appraised at $580,000

Abe Atiyeh a few years ago, in Bethlehem  zoning spat.
Around this time last year, colorful entrepreneur Abe Atiyeh purchased the assets of a company that has a billboard deal with Allentown at 13 different locations. It was a sudden turnaround. Previously, Abe had been on the warpath over this and several other matters, including the controversial Neighborhood Millionaire Improvement Zone. When news of peace broke, Mayor Edwin Pawlowski, aka Fed Ed, denied that there was any "deal that was made here, per se, and in any way, shape or form."  But that was untrue. Atiyeh had hired Fed Ed's political consultant Miked Fleck to be his business consultant. Very obviously, a deal was made.

On Friday, I told you that Fed Ed spent $1.4 million to buy two Atiyeh properties the City did not need. Atiyeh walked away with a $999,000 capital gain that certainly would help him make the purchase. But guess what? Fed Ed actually paid him $820,000 more than these properties were worth. The City's own appraisal valued the two properties at just $580,000.

By paying Atiyeh nearly three times what these properties were actually worth, it appears that Fed Ed deprived Allentown citizens of their right to honest services.In some contexts, this can be viewed as a federal crime.

Raymond C Geiger, Jr., who is a well-respected certified general appraiser, was hired by Allentown and submitted a report on January 23, 2014, a few months prior to the City's purchase. (You can read it here). He valued the Basin Street property at $360,000 and the Martin Luther King, Jr. Highway property at $220,000. The City never bothered to get a second opinion.

Julio Guridy, Cynthia Mota and Edwin Pawlowski
Basin Street property - $360,000. - Geiger makes clear that the billboard easement on this property is not part of his valuation. Atiyeh first purchased the Basin St tract  in 1996 from RJ Gorman Railroad for $200,000. Over 18 years, he was unable to develop it. He sold it to Isaam Elias in 2005 for $350,000, but Elias was unable to do anything with it, either. He conveyed it back to Atiyeh in 2012 for $350,000, the same sum Abe had been paid for the property.

Atiyeh provided a plan for a flea market at the site, but Geiger notes that "there is no evidence of demand for such use or the financial feasibility of such use. If it were a viable use, the question is why take eighteen years to develop it? No development plans have ever been approved."

Geiger observes that the site is low-lying and "extremely flood prone." Most of the land is "100% undevelopable." Before doing anything on the property, it would need six feet or more of fill, compacting and a one-year settlement period.

Martin Luther King, Jr. Highway Property - $220,000. - Atiyeh purchased this old fertilizer company in 2007 for just $51,000, before the prior owner received an Act 2 release from environmental liability. That was subsequently obtained, and obviously makes the property more valuable than it was when Atiyeh bought it.

Geiger could see signage on the property soliciting "storage use." In addition, Atiyeh provided him with plans for a three-story office building. Geiger thinks that use is unlikely. "Such use would compete directly with the rising offices in the NIZ and as such would not have a favorable cost-value relationship. I note, no development plans have ever been submitted or approved.".

Like the Basin Street property, this one is also "extremely flood prone. Much of it is within the 100-year flood plain and 100% undevelopable. About two acres can be developed, but would require 10 feet of fill, compacting and a one-year waiting period. In Geiger's view, development here is at a "disadvantageous cost-benefit."

After receiving nearly three times what these properties are worth, Abe began throwing his money at anyone that Miked Fleck or Fed Ed directed him to support. He really has no choice. He has a three year contract for those billboards, and would like to see that contract renewed and perhaps expanded. So in some ways, Atiyeh is a victim here, too. If he does not pay, he does not play.

Fed Ed and Miked Fleck were the predators. The biggest victims, of course, are the people of Allentown. The Mayor and City Council both have a fiduciary duty to safeguard the public's funds. City Council, with the exception of Jeanette Eichenwald, rubber stamped this proposal. I have no idea if they were provided with or looked at Geiger's appraisal. In fact, Ray O'Connell actually complimented the Administration. Cynthia Mota, who may have worked for Atiyeh and testified on his behalf in a zoning dispute, voted in favor of the purchase.

The first duty of a public official should always be to the people. The Romans would say semper pro populus - always for the people. In Allentown, that has been perverted.

Others will decide whether this denial of the right to honest services is criminal.

21 comments:

Rich Fegley said...

I warned City Council not to approve this spending. The rubber stampers ignored me. They had the park director lie about how there was a real plan to tie the parks together. As if this was the best way to spend this "windfall" money. This was a crime when it was happening and I was doing my best to make the citizens of Allentown aware of what was happening. The FBI will shed light on all of this now.

Anonymous said...

Mike Fleck is a patriot that is helping clean up the problems with politics in the Valley. His brave actions put him at risk yet he did it to make the Valley a better place.

Anonymous said...

Yeah. Long live Mike Fleck. Yeah long live Ed Pawlowski, Yeah, may the rest of their long lives be spent behind prison walls. The dirty bastards.

Anonymous said...

Schossberg was a member of city council at the time of these shaddy transactions, what did he know? Did he tweet about it?

Bernie O'Hare said...

He was nit on. Schweyer was.

Bernie O'Hare said...

When people suggest that there is no evidence of criminality, I will now disagree. The appraisal is evidence tha Pawlowski participated in a scheme to deprive citizens of their right to honest services.

Anonymous said...

This blog is the first thing I check each morning. You are going a great job breaking these important stories, Bernie! And I agree there is evidence of criminality.

Anonymous said...

Clearly the mayor is in trouble but how much trouble is Atiyeh in?

Anonymous said...

In a city of empty suits and mindless hacks,
Cynthia Mota stands out as especially vacuous.

Anonymous said...

I love the fact that Fed Ed made the two boy State Reps do a photo op with him last week, drawing them tighter into the web of complicity and political doom.
He is such a manipulative controlling prick and they are such fawning sycophants.
Is it any wonder the boys loath Fed Ed so much.
Makes you wonder what all he has on them?
I guess they all go down on the FBI sting, together or individually.

Anonymous said...

The boy State Represenatives had promising careers involving no or very little real toil, now they are most likely going to have to find real jobs to feed their families, if they can stay out of jail. You know darn well Mike Fleck has got them in tape, and Fran will throw them under the bus in a Philadelphia minute, it's clear he always thought they were worthless irritants.
This is going to be some show.

Allen Howells said...

Is this/will this 'enlightenment' being reported in the traditional news media? I do hope so..

Petty theft criminals pay huge fines out of their own pockets and sometimes serve jail time for what they did. These guys are swindling taxpayers out of tens of thousands, hundreds of thousands and millions of dollars. What will become of them?

Allen Howells said...

Is this/will this 'enlightenment' being reported in the traditional news media? I do hope so..

Petty theft criminals pay huge fines out of their own pockets and sometimes serve jail time for what they did. These guys are swindling taxpayers out of tens of thousands, hundreds of thousands and millions of dollars. What will become of them?

Anonymous said...

@10:14
The boy State Represenative Little Peter ( a wholly owned subsidiary of Jennifer Mann )
actually got along fine with the Maniging Director, Fran. They both hold the mayor in quiet contempt and were able to bond around that.
Neither of those outstanding public servants is going to take a fall for Chicago Ed if they can help it.

Anonymous said...

Allan. Not tens of thousands, hundreds of thousands and millions of dollars. No the taxpayers have been Swindled out Billions. Over a billion has been spent on the NIZ and the tax payers are on the line to pay it back. Not the developers, the people who live and work in the NIZ. After the banks get their interest it will be Billions that have to be repaid by the hard working Baristas at starbucks who as workers for a Reilly owned franchise do not even get the regular perks starbucks workers got. But those who were rebuilding that area, they get nothing because the city threatened to use eminent domain (illegally as a brooks group owned arena is not a public works project) to force their businesses and families out. Downtown Allentown in 2011 was not the place it had been in Hess's heyday buy it was not what it had been in 1994 either. The area was coming back. It was serving the city. Now it serves as a way for a handful of already rich people to get richer.


Bernie. Now you will disagree with no evidence of criminality? What of the $20 million that was given the J.B. before ANIZDA was set up or there was any way to apply for funds? What of the way the City came and destroyed Occupy's tents, slashing through them with knives and snapping tent polls all because we had the audacity to call the city on the way they were stealing from the taxpayer to line the pockets of the mayors donors. What about the way Heather Browne, the wife of the Senator who passed the NIZ law was hired by those who sought NIZ funds as a publicist. Pay to Play on this level has always been illegal and there is more then enough proof that there was criminal activity long before this. I hope you would say now you have one more reason to say there is evidence of criminality.

Elijah LoPinto

J. SPIKE ROGAN said...

Mike Fleck posted at 1:24 AM. lol

Anonymous said...

I've always wondered why a guy like Atiyeh would give lots of money and free billboard space to a guy like Michael Beyer who had absolutely no chance in winning an election. It all makes sense now. Fed Ed told him to. This could go much deeper than any of us can comprehend.

Anonymous said...

I keep thinking about the little people who work
at City Hall and participated in all manor of illegal bureaucratic acts simply because they were told and they didn't have the courage to say no.
There must be dozens of them.

Anonymous said...

I believe Mr. Fleck ran the campaign for Councilperson Mota.Who cares Ms. Mota would be declared incompentent by the Courts

Rich Fegley said...

"The total appraisals the seller obtained were for $2.653 million," Wild said. "Yes, the city's appraiser came out at a lower number, but the seller's appraiser came up at a much higher number. As is typical in real estate transactions, this was a negotiated deal. The ultimate sales number came in between the buyer's and seller's appraisals."

Atiyeh's appraisal was 4.5x more than the City's appraisal? That does not sound legitimate at all.

No one on City Council questioned any of this. Peter Schweyer said there was a lot of planning that went into this spending. ?

Where is the "plan" from the Parks Department? WFMZ says there is none.

Which members of City Council knew about these discrepancies with the appraisals? Which members of Council looked at the appraisals?

Where is Atiyeh's appraisal that the Mayor used to make the deal?

Legally, how can the Mayor and City Council simply approve the purchase of $1.4 million in real estate? Do the Citizens of Allentown even know that this real estate deal between the Mayor, City Council and Abe Atiyeh ever happened? It was simple for them to rubber stamp this.

I will be at City Council to discuss all of these real estate issues in a public forum. Please join me in City Council chambers on Wednesday at 7pm.

Parking meters are $2/hr and they run until 10pm. Don't forget!

Bernie O'Hare said...

Very well said, Richard. See you there.