In March, Northampton County Council approved a nonbinding resolution aimed at capping increasing lot fees charged by the private equity firms that are gobbling up manufactured home developments throughout the country. But at the same time, Northampton County is poised to give a significant tax break for Skyline Investment Group. This private equity firm plans to buy the long vacant Dixie Cup building in Wilson Borough and convert it into 405 apartments. Monthly rentals for single bedroom apartments will be $1,900, which is well above what City Center charges ($1,200) for luxury apartments at the Strata. It's nearly twice what most commercial landlords charge in the Lehigh Valley. Though Skyline is willing to throw a $1 million bone to the three taxing districts for affordable housing elsewhere, all three taxing authorities will have to wait 20 years before they see increased revenue to help their bottom lines. While waiting, ordinary taxpayers will have to pick up the tab for the increased services that the school district, borough and county will have to provide for double-platers who move here from New Jersey and NYC. These transplants will be among the few who can afford these rents. Most of us would agree that tax breaks for warehouse developers should be spurned. Similarly, we should discourage private equity firms like Skyline that exacerbate the affordable housing crisis. They've already taken over the trailer parks and now have their sights set on larger apartment complexes throughout the country. While they certainly have the right to invest in apartment buildings and charge exorbitant rents, the last thing a government should do is incentivize them.
Earlier this week, I shared Armando Moritz-Chapelliquen's informative description of the project (you can read it here.) In addition to seeking a tax break known as a TIF, which would delay enhanced tax revenue for 20 years, Skyline wants the county to acquire a triangular tract (at least temporarily) next to the factory upon which it plans to move the Dixie Cup that currently sits on top of the building.
One of my readers asks, "Has anyone done research into this developer? What other projects have they done? Anything of this size? Do they have a reputation as a good operator? I would think that A LOT of research should be done before McClure hands out our tax dollars to them!"
I've done a little digging and can see a number of red flags.
First, this private equity firm (it is not really a developer) calls itself Skyline Investment Group. Just as there are knock offs of name brand products, Skyline Investment Group appears to be a knock off of the worldwide Skyline Development Group. That's owned by Zygi Wilf, who also owns the Minnesota Vikings and is an actual developer. I believe using a name so similar to Skyline Development Group is designed to confuse gullible people.
Second, Skyline Investment Group's website lists locations in California, Florida, New York, Tennessee and Texas. But with the exception of its New York location, it fails to provide a physical address for any of these other venues. The only contact - and it's the same contact for all five locations - is a cell phone number with a 551 area code (in New Jersey).
Third, the sole physical location it does list in New York is 200 Park Avenue, Suite 1700. That's the Metlife Building, and the use of that address is intended to create the impression that Skyline has a prestigious address. But it's a virtual address.
Fourth, the portfolio for Skyline lists one project called the Louix. It fails to indicate where it is, what it is or when it was built. There is no description at all.
Fifth, the services offered are a ridiculous array of items from accounts receivable to second mortgages to lines of credit to energy production. This is not development.
Sixth, it lists several firms as "partners" that are actually not partners. For example, CHASM Architecture is listed as a "partner." It is actually an architectural firm that would be employed by a developer.
Seventh, the public faces of Skyline at municipal meetings have been Claudia Robinson and Neil Griffin. But get this. Neither is actually employed by Skyline at its make-believe office. Robinson is actually employed at AreaProbe, Inc., a Washington DC real estate advisory firm. She is apparently particularly good at snagging tax credits and is obviously working this deal as a consultant. I don't know what she may have told other municipal bodies, but she failed to disclose exactly what her employment status is with Skyline, despite a direct question about it from Council member Lori Vargo Heffner. As for Neil Griffin, I was unable to find out exactly who he is and where he works.
So who is the moving force of Skyline? It appears to be one person - Brian Bartee. Amazingly, his LinkedIn page fails to even mention Skyline. He calls himself an investor in venture capital and private equity. He was a salesman for Lifescans for a year and was an account manager for the health care industry.
If Bartee has lined up a number of investors for the Dixie Cup, good for him. If he wants to charge rents that most of us could never afford, that is his right. But the government should do nothing to help someone who is only going to make the affordable housing crisis worse even if he dangles a $1 million carrot.
UPDATED (12:30 pm): Brian Bartee, Skyline's owner, called me this morning. The one part of my story that is inaccurate is my confusion of him with another Brian Bartee from Arizona. He also insists that CHASM is a partner, although that's debatable. The rest of my story is accurate. I'll fill you in on that conversation on Monday.
55 comments:
When they say rent will be $1900 for a 1BR, it's important to remember that that is for year one. Places like this raise the rent every year.
Also, the affordable housing crisis and most, if not all, of the issues we're experiencing in this country are a result of capitalism. And when the Supreme Court paved the way for corporations and the mega wealthy to buy politicians with the Citizens United decision, the problems with capitalism got worse.
Well said!
Another McClure ego trip. This is complete BS. No more tax breaks for millionaires. IT was bad enough when he shamed council into giving the millionaire owners of the Iron Pigs money and now this. Just say NO!
Pay your employees a LV living wage. Only your top people could afford to live in these apartments. Where are the democrats on council who claim to support working people? BS!
Thank you for protecting taxpayers and citizens from our county government. Sadly, you endorsed most of these birdbrains. But better late than never, I guess. This is why counties, which can be run by the likes of ambulance chasing asbestos lawyers who may know law but rarely know math, should stay out of these economic development schemes. Our executive and our council are complete idiots who have been had. Their stupidity and laziness to vet the developer are absolutely jaw-dropping. Nice work Lamont. Great job "commissioners." WTF is wrong with these morons? McClure should be impeached for this level of idiocy. Unless, of course, he's getting bribed for his support. THAT is a legitimate question, given these facts. Somebody must be getting paid off.
Thank you Bernie. Great work here.
The variable you are missing here Bernie is the fact that this is a large abandoned building in desperate need of investment.
Not defending this development (disagree with apartments there), but 1,900 for a 1 bedroom is unfortunately an average rent in the Lehigh Valley in 2024.
"Not defending this development (disagree with apartments there), but 1,900 for a 1 bedroom is unfortunately an average rent in the Lehigh Valley in 2024."
It is about twice the average.
"The variable you are missing here Bernie is the fact that this is a large abandoned building in desperate need of investment.
Sure and if someone wants to develop it, this is America. But a government strapped for cash is being irresponsible oif it gives a tax break bc (1) it makes the housing crisis worse and (2) it will have to wait 20 years to see an increased tax benefit but will have to provide services there and everywhere else. That will mean tax hikes.
Not in favor of the TIF for 20 years; however i can see a 10 year Lerta. At least the county, school district and borough would receive some tax benefit yearly as the work progresses and units get rented. Also; there MUST be some affortable housing or some type of subsidized housing for seniors 55 or older. I believe this is warranted especially in Wilson.
First off, I agree that this looks like a front for a developer that wants to appear more legit than he is.
Second, on subsidy… The 10-year KOZ allowed the current owner to hold the property with minimal carrying costs, which a bad subsidy. And let’s not forget that. But a subsidy with more strings attached could move this property into a better and more productive use for the community. And get it out of the hands of the current loser.
Third, the academic theory here is still being worked through, I think, and so we can argue this, but from a supply perspective… adding new units at the top end of the rental range, does actually add more units and has the potential to free up some supply at the more affordable end of the spectrum. So there is an argument that this development does not automatically exacerbate the affordable housing issue that our community is dealing with. Could the project be all affordable housing? Or aspire to a better mix of incomes? Sure. But that project hasn’t come to the table.
The per unit cost in lieu of affordable housing inclusion is kind of a joke though… it costs probably somewhere closer to 200-300k to build a unit, so the 25k per unit fee is not really an offsetting win. Unless it’s per year for at least 10 or 15 years?
It’s worth noting that the community could work with a developer whereby the TIF would also fund community investments alongside providing some subsidy to the developer, instead of just pushing all the dollars over to this boiler room dude.
And lastly, given the ask for the TIF, and otherwise, the community could insist on a community benefits agreement from a developer, outside of and in addition to the payment in lieu of affordable units, which could fund other community investments over a defined time period.
Bernie O’Hare said: “I've done a little digging, and really, and can see a number of red flags.”
Isn’t it amazing what a LITTLE digging can do?
And while you’re too kind to mention it in your post, not only should NorCo turn down the TIF, but the borough and school district should rescind their prior approvals of their portions of the TIF.
The decision makers in those entities have shown how little they care about the way they handle taxpayer money, and any of them that still support this giveaway should be forced out of office.
Bernie, there is a dog bar planned. I'm certain you'll find many successful dog bars that were developed by this fine company. They're likely flourishing with a delightful abundance of precious pups. You feign affection for man's best friend. But you aren't willing to give millions of our money to a shady scammer? Shame on you. Lamont really loves dogs. He's willing to put our money where his big mouth is to prove it.
Also Bernie, I'm hearing rumors of another huge county tax break to develop Chapman Quarry as an inverse planetarium where visitors will be suspended from cables while looking down at the stars. The developer is a Nigerian prince with an 800 number and expertise in repairing Windows operating systems, and extending your Ford vehicle warranty. Lamont and the komishinures think he's a sound investment. Can you confirm? Please and thank you.
Anon 2:35 am said: “Also, the affordable housing crisis and most, if not all, of the issues we're experiencing in this country are a result of capitalism.”
You couldn’t be more wrong!
A free-market economy (what you call “capitalism”) is what allowed this country to leap ahead of the rest of the world economically. It is our greatest advantage over the rest of the world, not a problem.
The problem is what I call “crony capitalism” where government gets involved and tries to pick winners and losers, like they’re doing with this TIF.
The “affordable housing” problem is also the result of reckless monetary policy at the national level where TRILLIONS of dollars are being printed to cover government overspending, thus devaluing our dollars.
Housing costs are rising on all income levels, and the dream of home ownership is getting further and further away for many,
especially for young people who will eventually end up repaying our current overspending.
Hopefully that part of the problem is resolved with a change in the next national election. But the county needs to do its part in turning down the TIF.
Just like in Bethlehem you have to follow the donations to get the truth behind the votes.
The vandalism increases every year. There are virtually no windows left unbroken. This project is a symbol of what could be.
We should let that guy from Allentown Nat Hyman develop it.
Thanks for doing the homework that local government hasn’t, but now what? does River City need another boys band?
It’s a 155 million dollar RE-development project that will create 150 local construction jobs.
Outstanding piece of investigative journalism Bernie! Any member of the Wilson Area School Board or County Council voting for this would be foolish.
Great article, Bernie. Keep up the good work!
Bernie I agree with pretty much everything you cover here. I don't like tax deals like this, the taxing entity almost always loses out on these deals - and thus the taxpayer loses as well.
But the average rent in the Lehigh Valley is not far off this number. Evan Jones from the Morning Call did a good report on this about 9mos ago. Average rent in the Lehigh Valley is $1,729/mth.
https://www.mcall.com/2023/06/12/afford-rent-lehigh-valley/
Affordable housing is a significant issue here, this won't help.
Yes, it’s time we let the Cup fall off and roll down the hill to Palmer.
Thanks again Bernie for asking questions none of the local media did. Much appreciated.
"It’s a 155 million dollar RE-development project that will create 150 local construction jobs."
True, and they will be union jobs, as Robinson made clear to the delight of Paul Anthony and Charles Dertinger. But those jobs will disappear once the job is complete. They are temporary.
"not only should NorCo turn down the TIF, but the borough and school district should rescind their prior approvals of their portions of the TIF."
Armando tells us that the school district and borough have yet to decide whether to grant a TIF.
"Third, the academic theory here is still being worked through, I think, and so we can argue this, but from a supply perspective… adding new units at the top end of the rental range, does actually add more units and has the potential to free up some supply at the more affordable end of the spectrum. So there is an argument that this development does not automatically exacerbate the affordable housing issue that our community is dealing with. Could the project be all affordable housing? Or aspire to a better mix of incomes? Sure. But that project hasn’t come to the table.:
I've heard that argument multiple times, most recently during a Bethlehem City Council meeting. I believe Mayor Reynolds has made this argument. Logically, this makes sense. Practically, it has made no difference. The argument assumes that population remains constant as housing supply increases. But it doesn't. These increased rentals will draw people from outside this area, increasing the population so that there really is no effective increase in housing units. Eventually, we will be another NYC bedroom community.
That’s great news! The information you’ve presented should tank this giveaway at all levels!
9:31, I'll stand by what I wrote, at least for now about the average cost of a 1 BR. It does vary by neighborhood and the size of an apartment (1BR or 2 BR). According to rentcafe, the average rent for an apartment is about $1,600, but this includes all apartment sizes. My point related to the cost of 1 BR. https://www.rentcafe.com/average-rent-market-trends/us/pa/lehigh-valley/?role=renter
"Not in favor of the TIF for 20 years; however i can see a 10 year Lerta. At least the county, school district and borough would receive some tax benefit yearly as the work progresses and units get rented. Also; there MUST be some affortable housing or some type of subsidized housing for seniors 55 or older. I believe this is warranted especially in Wilson."
This would certainly be a better option for developing a blighted property and enabling the taxing authorities to reap some increased revenue as a result of the improvements. It is a hulking eyesore. I would still be opposed bc I dislike giving tax breaks to private equity forms that are not even from this area and have no experience in redevelopment.
Before we all blindly jump on the “affordable housing” bandwagon, shouldn’t we at least think it through?
From what I see, the places that want more affordable housing are the places that have the highest levels of poverty. That would seem to indicate that they already have enough affordable housing.
Wouldn’t those interested in “affordable housing” as the government defines it necessarily be on the lower end of the income scale?
So wouldn’t that mean that by trying to solve the “affordable housing” issue, many local governments are actually deepening their poverty problem?
Isn’t it also fair to ask if by building more affordable housing, we’re not really solving the problem for people already here but rather drawing lower income people from outside the Valley (like from NY and NJ)? If so, that’s a never-ending downward cycle.
I’m all for improving things for everyone, but I don’t see these questions ever being addressed.
I see a correlation between more affordable housing, housing density, and resident income levels that’s degrading our cities and making them unlivable. It’s not something that even falls along racial lines since I see minority families who are able moving out of the valley’s cities as well.
I think we all want people to have home and live decently. But I think it’s also fair to ask how much can any one municipality sustain. Certainly there has to be a limit, but nobody ever seems to say what it should be.
The Free Market Economy did not allow us to leap ahead of the world economically. The rest of the world being decimated by WW2 did. And government spending after the war established our position both at home and abroad.
Also, a Free-Market economy doesn't actually exist. It's all supported by the government. The government built and maintains the infrastructure every business relies on. The government bails the Free Market economy out every few years when it collapses. And the government regulates the economy so we aren't poisoned, killed, or driven into oblivion by the free market in order to increase profits. Do you remember the banking crisis that toppled the free market when every over-leveraged midsized bank collapsed following the run on the the Silicone Valley bank last year? No? That's because the government stopped it from happening.
Also, the government is run by capitalists. Joe Biden is a capitalist. He's from the state of Incorporation, Delaware. Donald Trump is a capitalist. Everyone in a position of power in this country is a capitalist. There is no space between the government and the market.
All construction jobs are temporary - including those jobs created by developers who use illegal labor.
Wilson Borough will have 400-800 new EIT and/or LST taxpayers as well.
"The government built and maintains the infrastructure every business relies on. The government bails the Free Market economy out every few years when it collapses."
Capitalism may be overrated, but you have it completely backwards, slugger. The government doesn't have any money. Zero. It's books are now $34T underwater. That's because it has no money and must borrow (commandeer?) from the huge private equity pile. Your mindset of a filthy rich Uncle Sam is naïve and silly. But it's typical in a world where economics and basic math aren't taught to kids who think wealth grows on government trees. Meanwhile, government picks winners by bestowing enormous money on big pharma for forced shots, the military industrial complex for the three wars we're now funding, and the environment cult for battling the coming ice age. Oh wait, that was changed to warming when it didn't get cold by 1982.
You are very inaccurate. $950/mo was the average perhaps 20 years ago. Much of the Lehigh Valley rents start at $2000 per month in a newer apartment building. Even the dilapidated properties in Easton or Allentown go for minimum $1500 per month.
You don't believe in climate change. Say no more, friend.
Skyline bought some nursing homes I believe. If the same it didn't go well
It was skyline healthcare and they were kicked out.
Great project. Great development team. It’ll be a home run for the Borough in both the short and long-term with increased revenue. It’ll help the County pay for Affordable Housing projects and it won’t be a burden on the School District.
Love the solar panels on the roof. Very environmentally friendly project.
Mr Reynolds did not like when a citizen, who is also a business owner in Bethlum, had called him out about affordable housing. His administration feels it is important and much needed. Unfortunately when you decide to have 100's of brand new apartments built in so called flats, your affordable housing programs go no where. Thank God Lehigh won the bid.
The developer, however, unproven has already remediated an environmental hazard. That alone is worth the tax incentive as the Borough never could have afforded to do that.
Where are you finding a one bedroom for 950 a month? Maybe a complete dump in Allentown but that’s about it.
I'm game to move there, will they take section 8?
"I'm game to move there, will they take section 8?"
In about fifteen years, when the new discount owners for apartments buy the place. Prime location for section 8 eventually. Wilson by 25th St. What a dump.
"Great project. Great development team. It’ll be a home run for the Borough in both the short and long-term with increased revenue. It’ll help the County pay for Affordable Housing projects and it won’t be a burden on the School District."
Just like all their other well known, successful projects? Your idiocy is why Wilson remains in steep decline. This project is a sham with blinking lights on it. Our local leaders have been terribly derelict in their duty to investigate. I don't want to believe that supporting leaders have received bribes for their inexplicable support of this shaky enterprise. I'd rather believe they are stupid vs corrupt. There isn't a third alternative.
Yeah, what are they thinking? Especially after Manhattan was swallowed up by the ocean.
Oh wait…
At 4:25 a.m., you need more sleep. You don’t know how Tax Increment Financing works. You don’t know who the people are actually working on this project, and your content with condemning Wilson to being burden with a decaying structure that is unproductive and produces very little in the way of tax revenue.
. "I'd rather believe they are stupid vs corrupt. There isn't a third alternative.
Bingo! Especially Warren and Keegan. Thy aren't too bright. That is why they just do what McClure tells them. They will be screaming about affordable housing all the while ignoring the fact that county employees cannot afford their rents. Empty head robots.
Ah-$1,900 a month plus electric,internet,water ,sewer , garbage, so you need to bring home $6,000 a month after taxes. Ah are they sure that someone that makes this or more wants to live next to subsidized tenants?
Lori Vargo Heffner is the problem. Nothing will get done before the ‘25 elections. That’s the deal she made with John Brown and she’s sticking to it. There will be no progress.
The problem isn't affordable housing. Rather decent wages. When I graduated H.S. I netted $93 a week. My apartment was $90 a month. So to live at the same standard today with a 1 bedroom at $1,500 a month I'd have to earn equivalent to $37.50 an hour. Keep in mind that was about the average pay for a H.S graduate in those days.
ken Kraft(?) at 11:10, your obsession with Ms. Hefner is weird. If not Mr. Kraft, whomever the McClure toady is constantly writing this nonsense, you obsession is still weird.
At 2:09 a.m., the only thing weird is that you’re not asleep. And, that you’re just fine with Lori Vargo Heffner having smeared the good character of Paul Anthony. I wonder, did you help her with that. Now, get some rest.
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