A recently-formed Allentown Neighborhood Improvement Zone Authority (ANIZDA) can use those funds, along with the EIT from other Allentown workers, regardless of residence, to pay the projected $10.9 million annual debt service for a $158 million downtown hockey arena.
Finnigan told Supervisors that Browne has assured him it's unlikely that any EIT will be needed. "If that's what they hope, then the legislation should have been enacted without that in there," said Finnigan, adding that he is astonished that a lending institution would hand out $35 million "on a hope" that a "hole in the ground" would be profitable.
During his meeting with Senator Browne, Finnigan was also told there would be projects within the NIZ for the Allentown Brew Works and Cosmopolitan Restaurant.
The Fegley family, which owns and operates the Brew Works, contributed $2,100 to Allentown Mayor Ed Pawlowski's campaign last year.
Bill Grube, co-owner of the Cosmopolitan and board member of ANIZDA, donated another $3,500. On his December 13, 2011 application for appointment to ANIZDA, Grube denied he would have any conflict of interest. Before his appointment on February 1, Grube told Allentown City Council, "I have no dog in this hunt other than to rebuild the City."
Finnigan finally told Supervisors that Senator Browne asked municipal managers to support and endorse the Allentown project.
Hanover's Supervisors instead condemned it.
John Diacogiannis, who chairs the board, stated he has no problem with helping support the revitalization of another community, but does have a problem with "benefiting individual entrepreneurs." Referring to the EIT tax grab as a "scheme," he took exception to the way Allentown "ran roughshod" over outlying communities. "I just think it was plain wrong," he complained.
"If the state wanted to commit their money to it, fine. But why'd they have to commit ours?" asked Supervisor Glenn Walbert, who wants to know how the annual $10.9 million in debt service will be realized. Noting that the annual EIT from outlying communities and Allentown would total around $1 million, Walbert stated that the 3% state income tax would only be about $3 million. "Where does the other 6 million come from?" he asked, noting that revenue from sales tax would be insufficient.
Finnigan replied that Allentown DCED Director Sara Hailstone told him the money would come from add-ons to hockey tickets and cover charges.
Worried that bonds will be sold before anyone has time to react, Walbert suggested that the tax collection committees might consider a NIZ challenge, but Finnigan answered that there are no resources. "Something has to be done soon in fairness to future bondholders," stated Walbert. "We owe it to ourselves to have Mr. Broughal look into it."
Agreeing with Walbert, Supervisor Steve Salvesen argued the EIT tax grab violates the state constitution. "I don't see how they can appropriate another municipality's money for a purpose outside that municipality," he reasoned. If they can do that, they can do real estate tax or anything else with impunity."
"Do we fight this?" Salvesen asked.
Walbert then made a motion, seconded by Salvesen, authorizing Solicitor Jim Broughal to research the Township's options, including litigation, and to hire outside counsel, if necessary. It passed unanimously.
Supervisors will meet again on Tuesday, March 13, 7 PM, at the Municipal Building located at 3630 Jacksonville Road.