Lawyer Asks State to Crush CRIZ

Bethlehem's decision to rezone the 52-acre Martin Tower development has already resulted in a land use appeal. Distinguished land use and zoning attorney Marc Kaplin, who maintains a practice in Blue Bell, filed it on behalf of Hotel Bethlehem, Donegal Square, the Taylor Family Gas Station and residents Rocco and Electra D'Amato, Steven and Barbara Diamond, Clint and Sonia Walker, Deni Thurman-Eyer and Robert Romeril. But that's not all. Last week, he sent a letter to state officials, asking that the CRIZ designation for Martin Tower be withdrawn  because the City, in effect, pulled a bait and switch. It told state officials that the tower was the cornerstone of its attempt to make adapative re-use of steel buildings. But once it received the designation, it adoopted an ordinance authorizing the developer to demolish it.

Developer Lew Ronca has 52 CRIZ acres, with nothing left over to help the Boyd Theater, downtown development and even the new FED EX Ground facility.

Kaplan's letter, which is addressed to Governor Tom Wolf and other, is below.

In 2013, the Commonwealth of Pennsylvania awarded a CRIZ designation to the City of Bethlehem under the City Revitalization and Improvement Zone Act (“Act”).  The CRIZ designation allows specific properties within the City of Bethlehem (“CRIZ Properties”) to be redeveloped using state income and sales tax to fund the cost of development.  The cornerstone of the Commonwealth’s CRIZ designation for the CRIZ Properties was the preservation and adaptive re-use of the historic Martin Tower building on the 52 acre Martin Tower property.

On December 15, 2015, Bethlehem City Council adopted Bill No. 38-2015 as an Ordinance amending the Bethlehem Zoning Ordinance (“Zoning Amendment”).  The Zoning Amendment now allows for the demolition of the historic Martin Tower building. It also dramatically increased from 50,000 square feet to 380,000 square feet the amount of new retail/restaurant/entertainment square footage permitted on the property.  The Zoning Amendment effectively allows for the creation of a new destination retail “downtown” area on the outskirts of the City of Bethlehem which will detrimentally impact the continued revitalization of the existing historic Downtown area of Bethlehem (“Downtown”).

I represent some of the merchants and residents within the existing Downtown who have worked steadfastly over the past 16 years to restore and revitalize the existing Downtown.   If the Martin Towner property is permitted to be turned into a new “downtown” using taxpayer dollars, the merchants in the existing Downtown will not be able to effectively compete for retail and office tenants, and customers will be drawn out of the existing Downtown to the new “downtown”, which will lead to the blight of the existing Downtown area.  All of the significant past efforts to revitalize the existing Downtown will be for naught. 

My clients object to the use of their taxpayer dollars to subsidize the redevelopment of the Martin Tower property in a manner that does not comply with the original intent of the Commonwealth’s CRIZ award to the City of Bethlehem, nor the Act and guidelines promulgated thereunder.  The development of the Martin Tower property in the manner permitted by the new Zoning Amendment violates the CRIZ award made by the Commonwealth.  The City of Bethlehem was awarded the CRIZ based on an application (“CRIZ Application”) submitted by the Bethlehem Revitalization and Improvement Authority (“Authority”).  The CRIZ Application was based on eleven (11) specifically identified projects, including the Martin Tower property redevelopment being the feature property with the largest acreage in the Bethlehem proposal.  With regard to the Martin Tower property, the CRIZ Application represented that:

•           The vacant 52-acre Martin Tower campus sits as a landmark and gateway to historic Bethlehem.  The owner/developer intends to redevelop the 21-story tower as a mixed-use facility and develop the surrounding acreage with office, retail, commercial and residential uses resulting in one of the Lehigh Valley region’s premier commercial and residential destinations.  Martin Tower is another example of Bethlehem’s efforts to create its future from the vestiges of Bethlehem Steel’s past.

•           Located in close proximity to the region’s main transportation artery, Route 22, this project is ideally situated and will be readily marketable for the intended uses.  Representing a $175 million investment in the City, Martin Tower will provide an excellent opportunity to promote a live-work environment.  This “smart growth” approach to redevelopment is a cornerstone of Bethlehem’s CRIZ Plan and one that has helped the City earn the reputation as a community that executes on opportunities and generates positive results for itself and the region.

The CRIZ Application also represented that the intended uses of the Martin Tower property complied with current zoning and already had a Master Plan approved.  The Master Plan approval referred to was a Master Plan approved by Bethlehem City Council in 2007 which proposed the preservation of the Martin Tower building and retrofitting it with 266 condominium units, the construction of only 13,000 square feet of “neighborhood retail” shopping space south of Martin Tower, and the construction of 552 townhouses on vacant parking lots and otherwise unused land east of Martin Tower and west of Burnside Plantation.  As represented in the CRIZ Application, the development on the Martin Tower property would have brought many new residents to the downtown area and added to the retail and restaurant revival in the existing Downtown area.  A copy of the 2007 approved Master Plan for the Martin Tower building was attached to the CRIZ Application.

Development of the Martin Tower property with 380,000 square feet of new retail/restaurant/entertainment square footage instead of the primarily residential development represented in the CRIZ Application, represents a dramatic change to permit a “destination retail center” and constitutes a “bait and switch” which violates the basis of the CRIZ award, and also violates the purposes of the CRIZ Act and the guidelines promulgated thereunder.  The Pennsylvania Department of Revenue, Pennsylvania Department of Community and Economic Development and the Governor’s Office of Budget are tasked with administration of the CRIZ Program and have issued guidelines to administer the CRIZ Program (“CRIZ Guidelines”).  As stated in the CRIZ Guidelines, one of the primary purposes of the Act is “to provide opportunity to spur new growth in cities that have struggled to attract development, helping to revive downtowns and create jobs for the residents in the regions.”  Rather than help to revive the existing Downtown area within Bethlehem, the Zoning Amendment will decimate the existing Downtown and diminish the property values and quality of life of the residents and businesses in the Downtown area.

Section IV of the CRIZ Guidelines specifically states that:

E.  If the zone plan is amended or modified in a significant manner after the zone is approved and during the term of the zone, the contracting authority must inform DCED, the Office of the Budget and the Revenue Department in writing with a detailed explanation of the amendment or modification.  DCED, the Office of the Budget and the Revenue Department may ask for additional information.

Therefore, since the Zoning Amendment adopted by the City of Bethlehem now allows for the demolition of the Martin Tower building and significantly alters the development permitted on the Martin Tower Property as represented in the CRIZ Application, the City and/or the Authority is required to notify DCED, the Office of the Budget and the Revenue Department in writing of the amendment of its CRIZ plan and to obtain new CRIZ approval for such significant changes.

Since the development of the Martin Tower property in accordance with the City of Bethlehem’s new Zoning Amendment is not in accordance with the CRIZ Guidelines or the CRIZ Application, my clients respectfully request that the CRIZ award for the Martin Tower 52 acre parcel be revoked at this time and that the City of Bethlehem be permitted to designate other properties for CRIZ redevelopment that will not undercut its core Downtown revitalization and existing businesses.  Please acknowledge receipt of this correspondence and advise action to be taken in light of this new information provided herein.  

Very truly yours,

Marc B. Kaplin