In the meantime, Allentown State Hospital's 200-acre campus sat empty and dormant while state officials considered how they could top their initial blunder of closing it down. They came up with a scheme so incredibly stupid that you have to wonder whether they themselves should be committed.
Our betters in Harrisburg wanted to spend $15 million to tear down the buildings so the tract be sold to a wheeler-dealer from Doylestown for pocket change. After this scheme was exposed here in Blogistan, our state oligarchs decided to drop the Doylestown developer. But they went ahead and demolished the buildings anyway, with no developer waiting in the wings at all.
Browne's proposed new law gives the 195 acre State Hospital property to Reilly for $5.5 mil, or just over $28K an acre. The bill, if passed by the general assembly, sells the property to Reilly with no competitive bidding from other developers. Browne's proposal has already been endorsed by the General Services Office, State Representative Mike Schlossberg and mostr of our so-called leaders.
Browne's gift to Reilly is also the ultimate FU to state taxpayers.
Because the NIZ already allows land swaps, the taxpayers could end up paying for Reilly's new buildings. Such a swap should be prohibited on the former hospital grounds, as it would be an injustice for all taxpayers throughout Pennsylvania.
Other developers and the City of Allentown don't matter.
When asked, Hyman, one of those discarded developers, issued this response:
"I wanted to buy and redevelop the State Hospital site because I believe it is a once in a generation opportunity for Allentown. It is an opportunity to create a new town square for the east side and bolster the finances of the City through desperately needed real estate taxes. City Center is certainly the preeminent developer in Allentown and more than capable of doing a great job with this site. My issue however is with Pat Browne and Mike Schlossberg. Once again, they both are involved in back room dealings shrouded in secrecy and a lack of transparency. The voters have rightly dealt with Pat Browne and this directed sale is another example of his arrogance and his parting shot to the voters as he walks out the door. As far as Schlossberg, you may recall that when I offered $2.3m to buy the site with the buildings intact, he attacked me personally and said that the demolition was necessary to attract a much higher price for the site and a profit for the taxpayers. He claimed to know more about development than I do, despite all of the buildings that I have redeveloped in the City of Allentown. Well, he spent $15m in demolition costs and sold it for $5.5m. He lost the tax payers $10m. He must be held accountable for that.”
The deal seems in direct conflict to the General Service mission, of disposing property in the best interests of the public. With Browne's departure, Schlossberg apparently wants to position himself as the developer's best legislator.
In Allentown government, Mayor Matt Tuerk is actually on board with this absurdity. A man who supposedly had the inside track on economic development has been relegated to the third wheel of the Browne-Reilly bicycle. Councilperson Ce-Ce Gerlach expresses concern about gentrification. That is the least of Allentown's problems. State Rep wannabe Josh Siegel excuses this breach of fiduciary duty to the taxpayer with the hollow argument that at least the property will return to the tax rolls. But will it? Given the state's penchant for corporate handouts and the reality of the NIZ, that seems highly unlikely. State Rep Mike Schlossberg thinks you're either stupid or that you've forgotten his previous claim that demolishing the hospital grounds would make them more attractive.
As bloggers during the Pawlowski regime, we were amazed by the former mayor's his audacity. However, seeing Browne and Schlossberg in action, we realize what an amateur Pawlowski really was.
Bloggers' Note: This is a collaborative effort by bloggers Michael Molovinsky and Bernie O'Hare.
19 comments:
What do you expect from politicians?
The circle will close and no further doubt will remain when JBR hires Browne after his senate term ends.
As you noted, Republican voters have already taken care of Browne.
Do I expect democrat voters to do the same in November? Hell no!
They are only concerned about power, and could care less about results. They even re-elected Pawlowsk AFTER he was indicted.
I have a hard time deciding if democrats are uninformed, ignorant, unethical, or just lemmings that will mindlessly back their candidates no matter what. Maybe it’s a combination of all of those options.
No matter, Schlossburg’s will surely win re-election in November, and the few democrat voters who are informed about the issue will find some excuse for voting for him. They always do.
BernieOHare to 8:15, and you always manage to look at everything through partisan lens.
This is unbelievable! As usual the taxpayers lose. As far as 8:15, it is an attempt to make it partisan, BUT he has a point, they actually re-elected Pawloski while he was under indictment. You get the government you vote for. Schlossberg will be re-elected. Crazy!
@3:04 - he has always been employed by JBR, does his personal taxes as they are childhood friends. The 5.5 is a parachute.
Unless you have evidence that Browne does JB's taxes, you should not make that assertion. If what you say is so, Browne would be in violation of the State Ethics Act. His SFI indicates he does have reportable income as an att'y and as a CPA. If he is directly benefitting from a person who is the subject of a direct sale, he has a conflict. I doubt it. I believe Reilly's integrity is unimpeachable. While I think Browne is really screwing the taxpayer, he is not that stupid.
The development opportunities for this chunk of East Allentown are breathtaking in scope and potential.
NIZ stands for “Neighborhood Improvement District”. It doesn’t refer to center city Allentown, does it? Just “neighborhood” (in this third-class city per PA legislation). While I am not a real estate developer, at a certain point the downtown financing will be complete, at which time some or all of the acreage can be translated/transferred to the East Allentown site, a new “neighborhood” by anyone’s definition certainly in need of improvement.
People who know this plot of land either by driving along Central Avenue/River Road or by dropping off a child at the daycare center there recognize that a significant portion of it is undevelopable because of hills or other terrain features - probably far greater than half of the 200 or so acres. I expect that will be parkland.
Allentown State Hospital maintained a somewhat-self-sufficient farm operation during the 1940s, per the records held at LCCC’s Trexler Library in Schnecksville. (I found them while browsing, fascinating!) So those portions of center city that are thoroughly fleshed out today could be released from the NIZ and moved to East Allentown, as the great writers of this piece noted. They could designate 50 or so acres, keep the Arena area of the NIZ intact, and…move the cigarette stamping warehouses there.
Please don’t miss my favorite part of the practical effect of NIZ legislation on page 29 of the NIZ documentation on their Allentownniz dot com website. That page shows how to file cigarette stamping tax returns. I suspect that’s one of the single largest revenue streams for the NIZ. It’s one few people think about, focusing instead on payroll tax and hotel tax revenue being redirected to the NIZ. I note as the survivor of a lung cancer victim that much of the cigarette tax in this state goes to smoking remission and tobacco health projects. Unless the revenues go to the NIZ.
This is settled law. This purchase is going to go through, Becky B and the planning commission are going to be thrilled, and we’ll get Strata East-type four-story apartment buildings and stores that can’t seem to stay open just like in center city. LANTA will provide nice bus service. Bike paths galore. Oh, expect LVHN executives and their IT department to move from the arena building to East Allentown once the signature buildings go in.
Sigh.
Pawlawski may be gone bu the corruption lives on. The corruption in this country is now open and blatant. It is indeed a middle finger to regular folks.
Thanks for writing about this.
Bernie,
There are two bridges that link downtown Allentown with east side. Both are overwhelmingly difficult to cross. Traffic always heavy and aggressive.
Anonymous said...
"Bernie OHare to 8:15, and you always manage to look at everything through partisan lens."
You can call that "looking at everything through a partisan lens", but it's effectively a continuation of what is already included in your article (in Hyman's quote).
Hyman notes that "The voters have rightly dealt with Pat Browne...". Those would be Republican voters. Do I see any similar effort on the democrat side to deal with Schlossburg? Nope.
The district he represents was and is skewed heavily democrat. Schlossburg's never held a real job, obviously has terrible judgement and financial ability, and was even caught ghost voting. Prior to becoming a state representative, he was a reliable rubber-stamp for Pawlowski and a big part of creating the problems that the city continues to face.
If that makes me a partisan for calling democrat voters out for their failure to remove him, so be it.
If your purpose in writing this article is to actually spur change and hold our elected officials accountable, it's time to start calling things the way they are, even at the risk of being labeled as "partisan". If it's just to write something so you can appear to be critical, what's the point?
Someone must have the goods on Browne. This cannot stand and he alone is right in the middle of all this mindless greed and political power tripping. So glad he has been sent home for what it's worth now.
There are so many aspects to this transaction that are wrong, but perhaps the biggest is that both Pennsylvania and Allentown are once again putting their redevelopment hopes into a single developer.
While Hyman gushes that "City Center is certainly the preeminent developer in Allentown and more than capable of doing a great job with this site", I'd somewhat disagree.
City Center is competent at getting a project done, but so are other area developers. By allowing all the NIZ properties to be gobbled up by a select few developers, the NIZ has been dependent on the schedules of those few developers. The NIZ has also been hamstrung by the limited contacts of those few developers.
So instead of multiple developers having the opportunity to market the NIZ and use their contact lists to lure out-of-state businesses to the zone, we've watched as City Center has poached local businesses from other local landlords. And instead of multiple developers all being motivated to quickly move their projects to fruition, the projects move forward at the pace that City Center is willing and able to accomplish them. And instead of multiple developers each trying to outdo each other in terms of how their properties look, the downtown NIZ has gotten cookie-cutter apartment and commercial buildings that lack any real character and make the downtown boring. That's what's wrong with what happened with the NIZ.
In short, competition benefits the taxpayers.
Should the State Hospital project all go to not just a single developer but a single developer who already has most of the NIZ area as well, which projects will get priority? Will the projects move forward with a sense of urgency that benefits the taxpayers or at a pace that fits the developer's schedule and ability to fill the buildings?
I think we all know the answers to those questions, and once again it's the taxpayers who are getting the shaft. The state - with the city's blessing - is making the same mistakes over again.
Finally, thank you both for calling attention to this story. While I don't always agree with the points of view you or others commenting make, I think it's important to have the discussion.
So this is not higher order mathematics. Sell the land as is with buildings intact for $2.3m, or spend $15m to tear the building down and sell for $5.5m for a net loss of $9.5m. Ingenious!
Dry drunks are bitter and nasty. Evidence: Bernie and Pat Browne. Couldn't handle their liquor, dried out after ruining lives, living out the rest of their years as zealots and bitter scolds.
Very good, perceptive story here. I think we need more eyes looking at the development potential here.
A few years ago, I was angry when Sen. Browne tried to turn over the whole property to an individual in Doylestown who had no obvious qualifications or credentials for the project.
The state did have a public process of seeking bids this year. Only two bids were received, and they were rejected. The state then apparently started a negotiation process.
I would have preferred a more open and transparent process this time. However, I am glad that this important property is being turned over to a highly competent development organization. The City will still have control over the mixes of uses and densities through its zoning ordinance.
A comment was made about the Center City NIZ being transfered to the State Hospital. I don't think that is likely to happen because the annual tax revenues from the Center City NIZ properties are still needed to pay the bonds on the Center City projects. There have been some adjustments to the NIZ boundaries, but mainly to remove properties that were unlikely to generate much state tax revenue in the future.
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