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Sunday, April 22, 2012

NIZ News Last Week

This is the first in a series of articles that will keep you informed of the fast-moving NIZ story. Allentown Mayor Ed Pawlowski calls it transformational for his financially struggling  City. But surrounding communities worry their own tax bases will suffer. And commercial developers question how they can compete against subsidized office rents being offered by NIZ developer J.B. Reilly.

What's the NIZ? Allentown's Neighborhood Improvement Zone (NIZ) is a 130-acre parcel, located both in the downtown and along the riverfront. It's the result of state legislation first adopted in 2009. Virtually all state taxes generated by businesses in that zone can be used to fund other improvements. In addition, the earned income taxes of people who work there can be used, regardless where they live.

That's how Allentown plans to fund its much anticipated Phantoms hockey arena. Other improvements, including a luxury hotel and office complexes, have also been planned.

Here's a quick summary of what has happened in the last week alone:

Monday, April 16:  Bethlehem Township Commissioners, who with Hanover Township Supervisors are spearheading a legal challenge to the NIZ, meet behind closed doors to discuss a settlement offered by Mayor Pawlowski. In a bad sign for Allentown, no official action is taken.

Tuesday, April 17: A group of business leaders calling itself the Lehigh Valley Partnership decides, in a private meeting, to endorse the NIZ.

Wednesday, April 18 :  The Lehigh Valley Economic Development Corporation (LVEDC), in an early morning meeting of its Executive Committee, votes 14-2 to support the NIZ in a meeting marked more by who was missing than by who was there. Northampton and Lehigh County Executives John Stoffa and Don Cunningham were absent. One of the two NO votes is cast by Richard Thulin, who is scheduled to chair
LVEDC next year. The other No vote comes from Bethlehem Mayor John Callahan.

In an afternoon meeting of the Northampton County Council finance committee, Council Prez John Cusick blasts the NIZ. "How does somebody who wants to develop office space in Northampton County compete with subsidized space in the City of Allentown?" he asks.

In the evening, South Whitehall Township becomes the first Lehigh County municipality to challenge the NIZ, joining seven Northampton County local governments. "Please do not view this action as a declaration of war against the City, or a proliferation of this City versus Suburb nonsense," remarks Township Manager Jon Hammer.

Thursday, April 19: Northampton County Council member Barb Thierry announces she is preparing a resolution to join other local governments in a legal challenge to the NIZ and calling on state legislators to repeal the controversial tax grab of EIT. Thierry will also call for legislative changes to prevent developers from poaching local businesses for Allentown.

Friday, April 20: Word leaks that NIZ developer J.B. Reilly is attempting to lure Bethlehem-based Cigars International to Allentown's NIZ. Calls to Cigar International are not returned.

Abe Atiyeh becomes the first local developer to file a legal challenge the NIZ, with a lawsuit filed in Commonwealth Court.

This week, Hanover Township Supervisors will discuss Allentown's offers. If they settle, Allentown will still have to deal with Atiyeh. Other developers may join that lawsuit. Pawlowski may regret calling that litigation "baseless" and "ridiculous" when he learns that it will prevent him from selling bonds.

CUNA, a day late and a dollar short, will wring its hands as always, and be politely ignored.


Anonymous said...

What's a CUNA? Is that Canadian profanity?

Bernie O'Hare said...

CUNA is Congregations United for Neighborhood Action, perhaps one of the most ineffective organizations I've ever seen. Now that bonds are about to be floated, they wake up. They were asleep at the switch as business after business was brushed away, just as they'be been asleep at te switch on every other problem plaguing Allentown.

But I'm sure their leaders are very comfortable and "walk the walk."

urban_LV said...

New office space will undoubtedly be built in the Lehigh Valley over the next few years. The state government voted to strengthen the Lehigh Valley area by using state funding to direct this growth into the urban core rather than greenfield development.

This is a positive development for ALL residents of the Lehigh Valley. I hope our leaders can recognize this opportunity to preserve farmland and strengthen our core city using state funds from outside the area.

Bernie O'Hare said...

Yeah, it's real smart growth to poach businesses from a brownfield in Bethlehem or its south side.

urban_LV said...

If we keep our previous government policy, new office buildings would be built in Upper Saucon Township or Upper Macungie Township. These buildings would still compete with Bethlehem for tenants.

The question isn't "Should we build new office buildings", it is "Where should we build new office buildings"

I hope everyone involved can keep the discussion civil, and not use language like "poached".

What about the LVIP organization? None of us would say that they "poached" businesses from Allentown or Bethlehem. We would say that they wanted to build high-quality spaces for the new and existing businesses of the Lehigh Valley.

Just as LVIP had the best intentions for the whole Lehigh Valley, the NIZ legislation also has admirable goals.

Bernie O'Hare said...

So did Dr. Frankensten, as Mr. Roma observed last week. It is a monster that has created an uneven laying field in which J.B. Reilly is actively poaching existing LV businesses from locations within the LV, even from Allentown itself. This is highly destructive to the tax bases of numerous municipalities, and will result in lower assessments and higher taxes unless it is corrected.

urban_LV said...

There shouldn't be competition between Allentown and Hanover Township, or Bethlehem Township, or any other part of our community. Most of us live in one municipality and work in another. Let's not let these arbitrary municipal boundaries divide the Lehigh Valley community.

We need to look at this from a regional perspective. The NIZ will bring new money into the Lehigh Valley region (state funding for new construction downtown, and hopefully a few new businesses from outside the area). The NIZ may shift around a small amount of EIT, or cause a few businesses to relocate a few miles away. Neither of these outcomes is bad for the Lehigh Valley region.

In addition to bringing in new money to our local economy, I think the NIZ will contribute to two goals that the vast majority of local residents wish for: (1) Help revitalize downtown Allentown and (2) discourage the suburban sprawl and preserve farmland.

Bernie O'Hare said...

These outcomes ARE bad and are the reason why there are lawsuits by townships and commercial developers. The diversion of EIT, particularly future EIT over 50 years, will have a devastating impact on local municipal budgets. The creation of 1.5 MM sq ft of commercial office space in an already saturated market will cause all the local commercial developers to seek assessment reductions.

In the end, there will be tax increases on ALL of us, including Allentonians.

This is perhaps the most absurdly fooolish idea to make tit thru the state legislature in recent years.

If, as you say, there will be no real impact, then cave on these issues. Agree not to use EIT. Agree not to poach businesses withn a 25-mile radius.

If you can't make that agreement, then you know that it will have an impact, and are just spinning.

Anonymous said...

"perhaps one of the most ineffective organizations I've ever seen."

Funny that this group managed to pull together a public meeting where the mayor will present. That alone is a huge accomplishment. Since they literally have NO power (no money, no people, no support from developers), this has to count for something.

Bernie O'Hare said...

The Mayor will come only bc he knows he is in a bad position right now, both legally and from a PR standpoint. So he'll come and talk about Jesus and the one or two ministers there will gush. As I've said, CUNA is perhaps the most ineffective organization I've seen in A-town. They have a meeting months after there's a hole in the ground. Wow!

Doc Rock said...

Urban Genius said,

"What about the LVIP organization? None of us would say that they 'poached' businesses from Allentown or Bethlehem. We would say that they wanted to build high-quality spaces for the new and existing businesses of the Lehigh Valley."

Read a little history, Urban Genius. LVIP was formed to diversify the LV economy at a time when a few, large employers dominated the landscape (since you are too young to remember, they were Beth Steel, Mack Trucks, Western Electric).

LVIP succeeded and, as a result, the Lehigh Valley became largely insulated from the massive layoffs of those now dead (or dying) companies.

LVIP was a complement, not a competitor.

Walt Dealtrey was a visionary.

Anonymous said...

What defines and "Urban Core" "Core Community"?

Anonymous said...

Outstanding post. Thank you for providing this. Bravo for your work on this story.

Anonymous said...

You mentioned Bushkill Twp's participation a week or so ago. Are they in?

Bernie O'Hare said...


urban_LV said...

Doc Rock -

Sorry for the misunderstanding. I intended to compliment LVIP for their vision.

That is an organization that set out to improve the economy of the Lehigh Valley, and didn't worry about which side of the municipal border they were on.

My point is that Hanover Township isn't its own self-contained community. The citizens probably work in many different municipalities, and may choose to visit shops or restaurants located in Bethlehem or elsewhere.

I look at this as an opportunity to bring new money into the Lehigh Valley (state funding for new construction downtown, and hopefully a few new businesses from outside the area), improve downtown Allentown, and preserve farmland.

Anonymous said...

This is all just a bunch of bull$hit start putting people to work. The third party bull$hit is just that bull. Under the city is a hole subterainian world that has been neglected by palitical parasites past and present. Build the new buildings and when the toilets are overflowing because of the present shit was not made to handle the shit go to the top not the bottom.