Callahan's Sweetheart Deal

At its January 18th meeting, Bethlehem City Council was asked to confirm Mayor John Callahan's reappointment of his brother-in-law, Dino Cantelmi, to the Bethlehem Parking Authority (BPA). But that item was pulled from the agenda at the last minute because City Council member David DiGiacinto had some concerns, and Hizzoner was absent. City Council is meeting again tonight. Callahan will be there. But Cantelmi's reappointment is still missing from the agenda. As a result of what I've learned from a Right-to-Know-Law request, it is very apparent that Callahan recently used the BPA for a sweetheart deal that benefits one of his pals - developer Lou Pektor - at the expense of everyone else. When BPA Executive Director Hector Nemes complained, he was squeezed out. Yesterday was his last day on the job.

In response to a detailed Right-to-Know request, the BPA has provided me with two boxes packed with enough paper to fill the South Mountain forest. Yesterday, I spent a few hours going through them, item by item. I'm only one-third of the way through, and will pick it up again early next week. This is what I've learned.

In 2009, the BPA began considering the purchase of the parking deck behind Main Street Commons. Nothing I've been able to find indicates there was any real need to purchase this deck, which is located only a half block from the BPA's North Street garage. But nearly every item of correspondence from this time period is copied to Mayor Callahan.

At the time, this parking deck was owned by Lou Pektor, and adjoined his Main Street Commons. Pektor secured a state grant of $500,000 to redevelop the former Orr's building, and another $500,000 for the parking deck. Of course, he was grateful. Between 2000 and 2007, Team Pektor invested $75,000 in politicians seeking state office. He also contributed locally to Mayor John Callahan who, like Pektor, is a former wrestler. At the Main Street Commons, Pektor had a padded room built below the Brew Works, where he and Callahan could wrestle with each other. Callahan would later open up his Congressional campaign headquarters in this building.

But as the economy faltered, this urban developer began to struggle himself. In late 2007, he had to give up a 75-acre parcel in Bushkill Township, prime development land. By 2009, Pektor had defaulted on a $1.5 million Sovereign Bank loan.

At this time, the push to buy that parking deck began in earnest, despite a BPA garage located just a stone's throw away. In July, the Dietrick Group, LLC, appraised the value at $1,590,000. But interestingly, this appraisal was based on what the property would be worth after it was renovated, not its "as is" value. An "as is" appraisal would come in November from Moyer Realty Advisors, LLC, a "a regional, full-service appraisal practice specializing in commercial and industrial real estate valuations." That firm appraised the parking deck at just $675,000.

Amazingly, before both appraisals were in, the BPA adopted resolutions in August authorizing an agreement of sale, as well as applications for a $1.7 million loan and $3.5 million RAC grant. The Board was prepared to pay the renovated price for an "as is" property.

Tthe Board went one step further, negotiating a 20-year lease with Pektor under which he'd have control over the 58 parking places on the lower level, as well as 19 surface spots, for a pittance. In essence, the BPA was willing to spend up to $5.2 million for just 56 spaces on the upper level, or $92,857 per parking space.

Review of the closing documents reveal that one notable signature is missing - Executive Director Hector Nemes. It's missing from most of the correspondence, too. He apparently refused to play along in what is obviously a sweetheart deal for Callahan pal Pektor, and is now paying the price for choosing loyalty to the public over loyalty to the Mayor.

On November 2, 2009, BPA's attorneys recorded a deed revealing that they had paid $1,600,000 million for a parking deck worth only $675,000. In addition, the BPA recorded two mortgages to KNBT, one for $1.7 million and the other for $1.55 million. And they also recorded a memorandum of the lease under which Pektor can continue to use over half of the parking deck he no longer owns.

Unfortunately, the sweetheart deal includes includes more that Callahan wrestling buddy Lou Pektor. Pennoni Associates, a major Callahan campaign contributor, was hired to do the concrete renovations at Main Street Commons. That engineering firm is also doing the renovations to Northampton County's parking deck. It's currently somewhere around $600,000 over budget on the $1.7 million bid for that job.

I'll be more sure about Pennoni when I go through the records again, but it appears to be over budget in Bethlehem, too. In November 2009, it submitted a proposal to do the concrete repairs for $517,900. But BPA has already been billed at least $1,108,500. There is also no indication so far that Pennoni was selected from a pool of engineers who were asked for proposals.

Why would the Board, a supposedly independent body, go along with a Nemes' ouster? That's because at least three of them are Callahan cronies.

What I do know is that, when Pennoni had its $7,250 Callahan fundraiser, the person who made the arrangements was BPA Chair Joseph B. Hoffmeier Jr. Another board member, City Council candidate Michael D. Recchiuti, was financed by Callahan in 2009. Callahan filled Recchiuti's coffers with $5,500.

Last, but certainly not least, is Callahan brother-in-law and BPA Vice Chair Dino Cantelmi. Four years ago, on Superbowl Sunday 2007 and just after 1 AM, he was tooling along in his female companion's late model Volvo, driving the wrong way on a one-way street and minding his own business. He slammed right into a Bethlehem police cruiser, severely damaging it. He flipped his Volvo, and sent an injured officer to the hospital.

Sure, Dino had been drinking, Sure, he blew a 0.07 on a notoriously inaccurate field field breathalyzer. But he was never administered field sobriety tests, taken to the DUI center, or ever interviewed by a drug recognition expert. He was instead released after being charged with some summary traffic offenses.

This story eluded the attention of The Express Times and Morning Call, the Lehigh Valley's two local daily newspapers, for nearly four years. Finding it hard to believe that both newspapers would miss a story like this, I suggested a cover-up.

This charge was vehemently denied by Callahan officials, who tried to minimize what had happened. But they sure dragged their feet answering a Right-to-Know request about the incident. It took an appeal to the State Office of Open Records to get the photos you see here.

Yeah, they're independent. And great at parking, too.