Bethlehem City Council's Communication Problem

"What we've got here is a failure to communicate" is a refrain we all remember from Cool Hand Luke. It could easily describe what is happening as Bethlehem City Council considers controversial zoning changes at the 53-acre Martin Tower Development. Though City Council President Willie Reynolds claims he is really listening to concerns raised by Historic downtown and South side merchants, he and other Council members have certainly given them every reason to believe they are being ignored. Store owners have openly suggested that Reynolds and others on Council are getting their marching orders from Martin Tower owners and developers Lewis Ronca and Norton Herrick, who have yet to appear at a meeting. Reynolds and Bryan Callahan have even attempted to embarrass merchants into silence. They've responded with over 100 write-in votes for "Martin Tower" in last week's election.

Last week, City Council was supposed to have its final vote on zoning changes that would permit as much as 1.3 million sq ft of retail and a third downtown at Martin Tower. Reynolds vowed that Council would later change the law, but had to adopt it first do that the developers would be free to demolish a historic landmark. They had to pass the ordinance so they could change it.

This final vote never happened. Bethlehem Planning Chair Jim Fiorentino, zoning attorney Marc Kaplin and The Bethlehem Press were all quick to recognize the folly of this move. If that occurred, Martin Tower developers would be free to present a plan creating not one, but several publicly subsidized Promenades that would be the death knell for Bethlehem businesses already struggling to compete against restaurants and retail inside Allentown's publicly subsidized Neighborhood Improvement Zone (NIZ).

Martin Tower Part of CRIZ

You see, the Martin Tower development is part of Bethlehem's Community Revitalization Investment Zone (CRIZ), modeled after Allentown's NIZ. This gives a closed club of five developers, including Martin Tower, the right to use state sales and income taxes to subsidize new development, including hotels, destination retail and restaurants. They were anointed behind closed doors, free of public input or scrutiny, in a glaring demonstration that "what we've got here is a failure to communicate."

A developer outside this closed club has little reason to invest in Bethlehem.

According to the Keystone Research Center, a left of center think tank, this creates an uneven playing field in which state tax revenues are diverted to the few at the expense of the many. When those few are campaign contributors who fund large portions of the campaign warchests of City Council members and the Mayor, as is the case here, questions of crony capitalism and pay-to-play arise. This and other media sources have raised these questions, as well as members of the public. They have gone unanswered.

The Keystone Research Center also questions whether tax incentives like the NIZ and the CRIZ help create a state budget deficit. Hotel Bethlehem Managing Partner Bruce Haines has stated that, even if retail at Martin Tower is scaled back to 400,000 sq ft from the original 1.3 million, that will still cost the state $6 million per year in lost sales, income and payroll taxes.

This CRIZ designation makes little sense at Martin Tower, which is more of a sprawling suburb than a struggling downtown, Yet in the CRIZ application submitted to the state, the former Bethlehem Steel HQs was touted as "ideally situated" and "readily marketable" under its existing zoning for office and residential use, with a very limited neighborhood retail component. The iconic 23-story building is identified as the "cornerstone" of the Bethlehem CRIZ, "another example of Bethlehem's efforts to create its future from the vestiges of Bethlehem Steel's past."

Now the City wants to demolish the tower. This is in stark contrast to the approach it has taken to redeveloping the South side, where the old blast furnaces are lit up by multi-colored spotlights and the former steel company stock house has been converted into a Visitor Center.

Lehigh University Political Science professor Al Wurth questions whether Bethlehem has become "a 'steel' city that denies its steel heritage, and the work and dreams of its forbears, in favor of 'incentives' - sweet deals for the new owners who control our future and our past, though they never did or will live here."

Why not just take the CRIZ designation away from Martin Tower, and open the card game up to another developer who might actually bring a new business into Bethlehem?  Can't do it, says Department of Community and Economic Development (DCED) Director Alicia Karner. Under the state's interpretation of the CRIZ legislation, an interpretation that was surely fueled by the lobbyist hired by the closed club of CRIZ developers, any transfer of the CRIZ requires the agreement of the affected developer. The City would have to pay Ronca and Herrick to move the tax incentive to an area in the City where it might actually make sense.

Failure to communicate at "public" hearing 

Against this backdrop, where all the hallmarks of political favoritism are present, and merchants are concerned about their very survival, transparency and open communication between government officials and the public are extremely important. But the City has dropped the ball there, too.

This was evident at the very first "public" hearing conducted on this zoning proposal on October 6. Before a single member of the public could say a word, Planning Director Darlene Heller gave a power point presentation that lasted for two hours and 15 minutes. This was about twice the length of her presentation concerning a completely new zoning ordinance, adopted in 2012. She went on at great length discussing rear and side yard setbacks in what appeared to be an effort to lull over 100 people to sleep.

When she finally had finished, and before the public could say a word, Council members who has already publicly announced their support for these zoning changes used Heller and DCED Director Karner as props to justify the zoning changes. Bryan Callahan actually stated that "no one will be happy with this" so he therefore supports it.

When it was finally time for the public to speak, four who had signed on had already left. But 28 of them remained, and except for Bethlehem Democratic Committee Treasurer Clyde Thomas, all were opposed to the zoning changes.

Failure to Communicate Continues in Subsequent Meetings

This failure to communicate continued during City Council meetings on October 20 and again on November 4, where Council refused to engage in any dialogue with 48 speakers who addressed them during a portion of the meeting called "courtesy of the floor." This is no courtesy. It is a right under Pennsylvania's Sunshine Act. Speakers are limited to five minutes, and are answered with stony silence, even when mild attempts at humor are made. Council members have explained that they are silent because they have no desire to interfere with the public's statutory right to speak. But this lack of dialogue, which is rare in local meetings elsewhere in the Lehigh Valley, contributes to a growing perception that the public is nothing more than a third wheel on the government bicycle heading over a cliff. In an effort to be more inclusive, City Council is unwittingly closing the door on real discussion.

This lack of dialogue frustrated Marc Kaplin, a zoning attorney hired by the merchants to protect their interests. When Council refused to answer his questions, he reminded them that "it is also your duty to justify or respond or tell me I'm wrong."

Council Intimidation

Instead of meaningful dialogue, two Council members have used their positions to intimidate members of the public.Council President Willie Reynolds  has threatened to stop anyone who raises the question of political favoritism as a result of campaign contributions made to him or others by Martin Tower developers. The Appollo Grill's Rod Holt and Bethlehem Brew Works Jeff Fegley have ignored this threat.

But that pales in comparison to what Bryan Callahan has done. After various merchants have spoken and are unable to rebut him, Callahan has ticked off concessions that have been made to them, often erroneously.

At the end of the November 4 meeting, Callahan actually accused one critical merchant who won't be named here of paying all of his Bethlehem employees from an Allentown-based business to be able to take advantage of Allentown tax incentives.

In addition to being untrue, how employees are paid and taxed is confidential information protected by the Local Taxpayer Bill of Rights. Disclosure of that information is unlawful. According to Callahan, he obtained this information from the City's taxing authority, The Keystone Collections Group.He then used this confidential information at a public meeting to intimidate one of the merchants who has been critical of the Martin Tower rezoning..  

What's next?

This lack of communication continues as Council member Eric Evans has introduced a series of five amendments, introduced just prior to the November 4 meeting, designed to reduce the amount of destination retail and prevent a third downtown. Evans was the only Council member to oppose the rezoning of Martin Tower. He is concerned about merchants as well as West Bethlehem residents who have no desire to see a large residential community.

No copies of these zoning amendments were available for pubic inspection. Evans' own explanation of them was tortured and disjointed, prompting Hotel Bethlehem's Bruce Haines to suggest that the whole proposal be scrapped. "It is one thing to be blind-sided by Allentown, but to be  blind-sided by our own administration is beyond my wildest imagination," he argued.

Because these amendments must be reviewed by both the City and Lehigh Valley Planning Commission, Council is unable to vote on the ordinance as amended. Reynolds stated the matter would  be reviewed by the Planning Commission and return to Council for a final vote on December 15.

But the City Planning Commission has already canceled its November meeting, so it's unclear whether the final vote will occur this year.

(Blogger's Note: This story also appears in the November 11 2015 print edition of The Bethlehem Press.)