Commercial Developers: NIZ a "Destructive Monster"

South Whitehall Township Commissioners voted unanimously last night to join seven Northampton County communities in challenging the NIZ. Municipalities are concerned about the deprivation of EIT over the next 30 years. Instead of going into their coffers, that money will be used to fund a hockey arena and office buildings in downtown Allentown and along the riverfront. But there's another adverse consequence to the NIZ, and this one might be worse than Allentown's tax grab.

Two of the Lehigh Valley's most respected commercial developers, Don Frederick and Tom Roma, expressed their concerns to Commissioners last night. Here's what they have to say.

Don Frederick

Don Frederick (as in the Frederick Group. He's 82 years old, and tells me he's spent the last 52 of them peddling real estate).

"I am here as the managing partner for our family partnership, which owns a 90,000 square foot office building at 3500 Winchester Road.

"Our primary concern about the tax subsidized zone is the negative effect it will have on our building and, ultimately, South Whitehall Township and the Parkland School District. In a few months, we will be paying $120,000 in taxes. We're gonna' need rent to pay for that.

"The value of our property is based on the rental income we receive. Because there is currently a large oversupply of office space available, the tax subsidized zone will worsen the office market with its lower rent prices, thereby depressing the value of office buildings. [Frederick told me his tenants are already negotiating cheaper prices and threatening to head off to the NIZ].

"Obviously, we owners will have no choice but to seek lower assessments to reduce our real estate taxes.

"Therefore, I respectfully request, on behalf of my family and myself, that you seek guidance from your Solicitor, Att'y Joseph Zator, on filing a lawsuit that, at a minimum, would require tax subsidized properties to only lease space to tenants from a radius of 25 miles outside the tax subsidized zone."

The NIZ & J.B. Reilly

Tom Roma (as in Roma Corporate Center. He's older than dirt, too):

"In this total NIZ discussion, it has been mentioned that the framers of this law were out to do something evil.  I don't believe that at all. They were trying to do a very noble thing, and that is to increase and resurrect downtown areas of cities in the state. However, I think the law was very poorly written and ill-conceived. 

"It wasn't their intention to write a law that was going to siphon off the real estate values of the suburbs and take them into the city. But unfortunately, that is what is happening. 

"Dr. Frankenstein started off to build a human being from discarded parts. He was trying to do something noble for the world. But what he developed unknowingly was a destructive monster. 

"In my opinion, the way the NIZ law is written is exactly that. It is a destructive monster. 

"It's going to, among other things, siphon off wage tax money, which you already know. But also, it's going to have an effect on reducing commercial real estate values, not only in South Whitehall Township, but all the other townships around the city. The result of that is that the value of commercial real estate will be reduced. And as a result of that, the tax revenue, both for South Whitehall and for every other Township will be reduced, as will the County itself and a much larger amount for the school boards, which are going to come up on the short end of the stick.

"At a meeting I attended last week, several people mentioned that we should go into a negotiation mode. Let's talk to the state and the city and try to talk to them in a friendly tone. 

"My opinion? I think it's too late for that. I think that ship has sailed. I think the only approach we should take now is litigation. If the Township is suggesting that legal action be started one way or the other, I would strongly support that."