Today's one-liner: “In a republican nation whose citizens are to be led by reason and persuasion and not by force, the art of reasoning becomes of first importance.” T Jefferson
Lehigh Valley Economic Development Corp. (LVEDC) CEO Don Cunningham has always been a glass half full kind of guy. That attitude served him as Bethlehem's Mayor, when overnight, Bethlehem Steel pulled the plug and shut down. In one fell swoop, the City lost 20% of its tax base, to say nothing of residents who were out of a job. Cunningham, very much a local version of FDR, always inspired optimism when it was needed most. It paid off, too. Today, Bethlehem might actually be in a better position economically than it ever was.
Where are we economically? - The Lehigh Valley has grown from a GDP of $27.4 billion in 2003 to $55.7 billion in 2023. This actually tops Alaska, Wyoming and Vermont. Believe it or not, $9 billion is from manufacturing. The second biggest sector ($8.7 billion) comes from finance, real estate and insurance. Health care and education account for $8.4 billion, followed by professional services ($6.9 billion), wholesale trade ($3.8 billion) and retail trade ($3.8 billion).
Last year, instead of a brain drain, NorCo actually led the state in the growth of jobs for adults under 40. This is in stark contrast to the rest of the northeast.
Median household income is $81,709, above the state's $76,081. "These are the numbers that are most relevant to us," observed Cunningham. The poverty rate is 10.5%, which is lower than the state rate of 11.8%.
Are there any recent NorCo projects? Yes. They include (1) Have Hydraulik in Bethlehem Tp, a (manufacturer which moved to Bethlehem Tp from China; (2) FLSmidth Cement, a cement equipment manufacturer which moved its Illinois and Arizona operations to Allen Tp, creating up to 60 new jobs; (3) Gfm Manufacturing (Pharmatec), which opened its first US facility at the former IQE building in Bethlehem, creating up to 100 new jobs; (4) D. Gillette Industrial, a defense contractor that opened up in Forks Tp and created 17 jobs; (5) Bazzini, America's oldest nut company, has expanded into NorCo; (6) COHERENT, an existing semiconductor manufacturer in Forks Tp, is expanding operations, which will create up to 320 new jobs; (7) Infinera, a semiconductor manufacturer in Upper Macungie and Bethlehem, is creating a new advanced test and packaging facility
What is the strategic plan? Cunningham said that, for the first time since he's been at LVEDC, there are actually "more people who want to be in the market than we have products and places and buildings for them."
He recognized the opposition to large footprint warehouses, but noted "that's also what houses the manufacturing economy." He suggested there needs to be a balance. Warehousing, however, is not among the types of economy that LVEDC is targeting.
In response to a question from Council member John Brown, Cunningham said that a big challenge for the Lehigh Valley is its fragmented governance. NorCo and Lehigh have a combined 59 local governments, not including the county governments themselves.
Its biggest strength is proximity to market, with about 1/3 of the nation's population within a 6-hour drive of the Lehigh Valley. Also, the plethora of colleges and technical schools has reduced a brain drin into a brain gain for new talent.
Bethlehem City Council is poised to vote on rezoning the former Bethlehem Technology Center, located on the city's south side, from industrial to central business district. This spot zoning will pave the way for The Emery, a six-story, 240-unit apartment building charging monthly rent that most of us could never afford. In a rare move, Lehigh Valley Economic Development Corp. CEO and President Don Cunningham has warned against this move.
Cunningham was Bethlehem when the steel company shut down. Over night people lost jobs and the city lost a quarter of its tax revenue. Cunningham brought people something they desperately needed - hope. Bethlehem would rebound, thanks to the moves he and his successor, John Callahan, made. They were fortunate to have Tony Hanna as Director of Community and Economic Development. But it all started with Cunningham. So when Cunningham speaks about Bethlehem, its City Council should listen. Here's a letter he sent to City Council about this proposal on April 18.
Dear City Councilmembers,
As you prepare to take input on the proposed rezoning of the former Bethlehem Technology Center property in South Bethlehem, I'm writing to raise several issues that don't appear to have gotten much attention yet.
The building under discussion was built as The Bethlehem Technology Center in 1993 as the first stake in the ground in Bethlehem's economic redevelopment from heavy industry to a new economy with an aim to grow a life sciences and technology sector.
The property was built with public money through a consortium of the City of Bethlehem, Northampton County, Ben Franklin Tech Partners at Lehigh University, and the non-profit developer Lehigh Valley Industrial Parks. (It was sold by Bethlehem Steel Corp.)
It was so successful that the same consortium built The Bethlehem Technology Center II (currently owned and occupied by OraSure Technologies) next door.
Both consortium-owned properties were sold to the building's dominant tenants in 2007.
The intention at the time of construction and at the time of sale was for the area to serve as a life sciences and technology hub for Bethlehem on former Bethlehem Steel land that could serve as a home to companies graduating from Ben Franklin Tech Partners or to house other tech and life sciences companies.
The Bethlehem Tech Center was built with unique and redundant infrastructure features such as electric supply, natural gas, life safety features, wet labs, and clean rooms.
There were covenants placed in the sales agreements from both 1993 and 2007 to limit the reuse of the properties for residential purposes, schools, daycares, and many other people-intensive uses. Those covenants need to be released by several entities for the property to ever be used for residential. (The 2007 covenant document is attached.)
The large grass areas outside of OraSure were purposely built to create a "tech campus" feeling that would connect Tech Center I and Tech Center II. Nearby companies have concerns about that area being used by residents and/or as a park.
The central question before you is one of timing. Is it time to walk away from technology or life sciences uses? Has adequate effort been made to continue this use and/or is it time to repurpose the property for residential? Here are a few points to consider.
IQE, the current owner of the building under discussion, decided to shut down its semiconductor operation in Bethlehem and move it to North Carolina. Lehigh University had the building under agreement for nearly a year but decided against buying it in the fall of 2022. IQE marketed the building within the Lehigh Valley during the fourth quarter of last year before settling on an agreement with Serfass this January.
The federal government, state government and the Lehigh Valley Economic Development Corp. - through its strategic plan - have targeted life science and technology development. There is a base of about 170 life science companies and about 6,600 employees in the Lehigh Valley.
LVEDC has embarked on a national marketing campaign to help grow this sector here. It is a growing sector in the United States. One of the biggest challenges to growth is the cost of building new space. And one of the biggest impediments to growing companies in this arena is the availability of space.
It will send an economic development message if the region's second-largest municipality moves this quickly to repurpose away from its life sciences-technology hub at a time when other states, regions, and the federal government are investing money and creating consortiums to build capacity.
There is clearly a demand for new housing in the Lehigh Valley. And I understand that the job of policymakers is to strike a balance regarding needs.
It's up to you to decide if now is the time for Bethlehem to do that. I just want you to do it with your eyes wide open.
New life science and technology developments, campuses, and innovation hubs will be built in our country, our state, and in the Lehigh Valley. The question under consideration is if Bethlehem will be involved.
Again, timing is the real issue. You will hear tonight that the property was marketed for life sciences and technology and there were no takers, therefore, there is no other option. Because of what I do for a living, I can offer that it often takes harder work -- longer than 90 days -- and a much-wider national net to find a specialized user for a building constructed for this purpose. Buildings in Bethlehem have been vacant for years or decades while much work was done to see if they could be reused, such as Bethlehem Steel's Martin Towers, the Bennett Toyota car lot on W. Broad St., and the numerous former Bethlehem Steel buildings on the ArtsQuest campus preserved for adaptive reuse.
I respect the difficulty of your job. I once was a City Councilman.
I know you all have the good of our city at heart. I want you to make your decision after a full examination.
While I cannot be at your public hearing tonight, I am open to questions and discussions at your pleasure.
As reported here yesterday, Lehigh Valley Economic Development Corporation (LVEDC) CEO Don Cunningham has decided to accept no compensation as a board member at plastic company Fuling Global. "While it’s perfectly legal for me to serve, I have learned that perception often becomes people’s reality, and I don’t want to cause any harm to LVEDC or Fuling." But that did nothing to dissuade Northampton County Council from adopting a resolution condemning what had happened.
Hayden Phillips, who sponsored the resolution, was aware of Cunningham's decision to accept no compensation. But he went on with it anyway. "The bell's rung, you can't unring a bell," he said. "I think we should still go through with this."
Bob Werner, who has clashed with Cunningham in the past, called Cunningham's letter a "walkback." "It's an 'I'm sorry' after I hit you." Saying he had no problem with LVEDC, Werner added, "I know Don," and questioned whether Cunningham really was waiving the $30,000 salary. "If any one of us up here did anything like this at all, we would be fried to death."
Executive John Brown defended Cunningham, stating it is a "common practice" among economic development professionals in the private sector, and affords a "learning experience." He indicated that Cunningham's willingness to forego a salary on the Fuling Board should cure any misperception. He asked Council to withdraw the resolution.
Glenn Geissinger agreed that sitting on a board was not a problem, but accepting money was. He believes Cunningham corrected that error. "I no longer have a problem with it since he's not being compensated," he said.
"At the very least, we should say what he did was wrong," said Council President John Cusick
Supporting the resolution were Phillips, Werner, Cusick, Peg Ferraro, Mat Benol and Matt Dietz. Voting against it were Geissinger, Ken Kraft and Seth Vaughn.
Don Cunningham is CEO at Lehigh Valley Economic Development Corp. According to the company's 2014 nonprofit tax return, Cunningham's salary was $138,000. In that year, $2.3 of its $4.4 million in revenue came in the form of government grants. These include hotel taxes from Lehigh and Northampton County. LVEDC also administers a host of other government grants, like a $3.4 million sustainability grant awarded in 2011. It is, for all practical purposes, a public agency. So is it proper for Cunningham to accept $30,000 from some Chinese plastics company that he helped lure to the Lehigh Valley?
Interestingly, this news did not come from Cunningham or LVEDC. He was perfectly content to keep us in the dark. We only know because of a required disclosure from the Chinese company.
It's sad that disclosures from private foreign companies provide more transparency than a publicly funded agency.
Cunningham and LVED' lawyer deny there's any conflict of interest
I disagree. I like Don and believe he has done an excellent job at LVEDC. But quite obviously, his role there gives him all kinds of inside information about the community that is invaluable in the private sector. He can clue them in on major infrastructure projects, grant opportunities and taxing trends. It's totally improper for him to use his inside knowledge to benefit a Chinese company. But that's what he is being tempted to do.
That's the way things happen in China. It's not supposed to be the way they happen here, except for Allentown. The LVEDC Board should stop this. Updated 11/23/16, 10:25 am: When I published this story, I included a link to The Morning Call story in which it first appeared. As another blogger who pays undue attention to who gets credit for what has observed, I did not break this story. I published this story because this is not a grey area of the law, as the article suggests. You either break the Ethics Act or you don't. What Cunningham did is completely legal. It's also completely wrong.
Whether Democrat or Republican, Northampton County Council has historically been a very harsh critic of the Lehigh Valley Economic Development Corporation (LVEDC). They have long complained that Northampton County is Lehigh's ugly stepsister, and is too often overlooked by LVEDC when it comes to economic development. LVEDC, which is funded with hotel tax dollars from both counties, has also been slammed over the years for its complete lack of transparency and secretiveness. Has Don Cunningham, Lehigh County's former Executive and Bethlehem's former Mayor, turned things around now that he is at the helm? His nuts and bolts report to Council, full of details on job creation and retention here in Northampton County, is perhaps LVEDC's most effective explanation ever to Northampton County.
Cunningham explained that LVEDC is the "regional marketing entity" funded by both counties and the largest employers within the Lehigh Valley. Much of what it does is designed to attract business to the Lehigh Valley without regard to where the business is going. The Valley has experienced significant growth, as evidenced by a $35.4 billion GDP. This is larger than Vermont and 94 countries. Site Selection Magazine, which relies on hard empirical data, identifies the Lehigh Valley as the top performing area for economic development in the northeastern United States.
The Lehigh Valley is experiencing international growth. Out of 19 major projects last year, nine were international. . Northampton County's include Inditex (Spain), a clothing distributor located in Forks Tp; Defense and Aerospace contractor MBD - Safran (France), operating in Lower Nazareth; Primark Stores (Ireland), a clothing distributor in Bethlehem; Electronics company Ricoh (Japan), established in Hanover Tp; and Norac, a French-based bakery coming to Forks Tp.
The food and beverage business is booming, claims Cunningham. "It started in the Macungies, but we've seen a significant movement of food processing into Northampton County. In fact, in the last 12-18 months, the pendulum of development in the Lehigh Valley has really swung towards Northampton County."
Cunningham said that, unlike 20-25 years ago, the local economy is much more diverse. "We no longer have all of our eggs in one basket." It is instead balanced over several sectors: Finance and real estate ($5.24B); Business services ($5.01B); Manufacturing ($4.95B); Education and health care ($4.84B); Retail ($2.2B); Transportation and warehousing ($1.61B); Information ($1.53B); and Arts and entertainment ($1.36B).
There are fewer jobs in manufacturing because of automation and technology, "but the reality is that the Lehigh Valley is the 60th largest market for manufacturing in the United States," even though the Lehigh valley is not the 60th largest population base in the country.
"We're swinging well above our weight class in manufacturing," he observed. He added that the typical manufacturer these days employs 20-75 people in 20,000-80,000 sq ft. The work is heavily automated, and is growing because of proximity to New York and Philadelphia, and lower cost of production.
"It's a misnomer than many people believe that manufacturing is somehow dead here. It's quite the opposite." Though the warehouse industry attracts headlines, manufacturing is three times larger.
"The old manufacturing was everyone go down to the Bethlehem Steel," said Seth Vaughn. Cunningham stressed that it is now important for people to attend vocational and technical schools. "We are nearly at full employment in the skilled occupations," he said. "These smaller manufacturers require a higher level of skill than when my father worked at Bethlehem Steel.... Today the shop floor is highly automated, highly technical."
Hayden Phillips remarked that many people confuse small manufacturers with warehouses because they see tractor trailers and loading docks.
Cunningham has heard Northampton County's complaints, and has also embarked on marketing very specific locations within the Lehigh Valley. He agrees that different regions within the Lehigh Valley have their own attractive assets. In Allentown, it would be the NIZ. Bethlehem has two vibrant downtowns and has its own share of tax incentives. Easton is a river community that with a growing artist and restaurant scene. The slate belt has a large inventory of available commercial properties with fast and easy access to both Routes 33 and 80.
Cunningham has had brochures and sub-websites made up for each of these regions as well as Youtube videos highlighting the strengths of each specific community.along with the region as a whole.
He then ticked off some of the areas within the County that are experiencing job growth. South Bethlehem leads the field. Cunningham was Mayor in Bethlehem when the Steel company ceased operations. "If you would have told me 18 years ago that 80% of that land would be spoken for and re-used, I would have said you were crazy.," he remarked. But a former brownfield site is booming with job creation.
Zulily is an international e-commerce site, and its East coast operations are in Northampton County, along with 1,200 jobs. He also mentioned Curtis-Wright, which moved its operations into Bethlehem from New Jersey. REEB Millwork is a Lehigh Valley company that was persuaded to stay here after it outgrew its site in Fountain Hill. Tyber Medical is a start-up. "We helped fund their entry into the market in Northampton County," noted Cunningham.
In addition to the development in South Bethlehem, Cunningham pointed to expansions by C and S Wholesale Grocers (500 new jobs) and the retention of Guardian Life Insurance in Hanover Township (1,000 jobs retained)
LVEDC is also working on the redevelopment of brownfields like the Simon Silk Mill (Easton), Easton Public Market and GKEDC Industrial Park in Wind Gap.
Cunningham also highlighted the Fed Ex hub, which will be able to process 70,000 packages per hour and serve as a magnet for other retailers in the Lehigh Valley, seeking a means to quicker delivery.
Three hundred of the 800-acre Chrin site, located in the northern portion of Palmer Township, has been purchased. That is warehouse space, but the remaining 500 acres will go to manufacturing, office, hotels and other commercial uses.
Will an inland port in South Bethlehem lead to an explosion of warehouses? Cunningham noted that an inland port designation at the Norfolk-Southern terminal has yet to be decided. Something coming off a ship in Newark must first go by rail to an inland port near Carlisle, after which it is trucked back to the Lehigh Valley. Having an inland port designation in South Bethlehem would take those trucks off the road and would create more efficiency for local business.
Cunningham notes that several communities, including Binghamton in New York,are vying for an inland port designation. He added that e-commerce, which is growing 20% each year, will smile on the community that gets this designation.
Unfortunately, the details of this story have to wait until Monday. For now, I want you to know that Lehigh Valley Economic Development Director Don Cunningham hit a grand slam with a Northampton County Council that has historically been highly critical of LVEDC and its efforts at attracting business in Northampton County. It's a "good news" story, too.
For now, let me remind you of the common view that the only development going on right now are warehouses. Guess what? We're completely wrong. Manufacturing is alive and well, and represents a much greater percentage of business in the Lehigh Valley that big boxes. It's just no longer like the manufacturing we used to see in the days of the Bethlehem Steel. I'll report to you in detail on Monday.
Photo taken by former LV Ramblings intern Peg Ferraro
After being caught fraternizing with a bottom-feeding blogger on Friday afternoon, LVEDC CEO Don Cunningham has been summarily terminated.
"We have standards, damn it!" explained Board member L. Charles Marcon. "We could put up with the Springsteen concerts, but this is too much."
In another emergency meeting, the National Museum of Industrial History, known as the NMIH and not to be confused with the NIMH (National Institute of Mental Health) has hired Cunningham at a salary of $5,000,000 per year.
"Let's see what Morganelli does now!" said Board spokesperson L. Charles Marcon.
Some idiots will actually believe this, but I couldn't resist.
Peg Ferraro actually did take that picture. But I fired her as my intern because I'm much more handsome than I appear in that picture. They say the camera adds ten pounds. "You must have eaten ten cameras," Cunningham told me.
I was sleeping soundly Friday morning when suddenly, the bottom-feeding blogger beacon began to shine from South Side Bethlehem. Governor Corbett was coming to town. Cunningham, Peg and a host of other big shots were there.
I hopped into my $500 Blogger-Mobile and made it. I was the only person there who hadn't shaved. ... Or showered.
The Governor's press person allowed me to remain even though I had no credentials except for the "Award Winning Broadcast Journalist" card I had a friend make up for me a few months ago. A state trooper with the Guv' was giving me the "I'll take you down to Chinatown" glare, and i don't blame him. But Corbett and the Sands CEO were cool as hell.
Don Cunningham's LVEDC to roll out economic development strategy
He's been a news reporter, City Council member, Mayor, County Executive and even a member of former Governor Ed Rendell's cabinet. These days, Don Cunningham is President and CEO of the Lehigh Valley Economic Development Corporation (LEDC). He dropped in on Northampton County Council's economic development committee on March 6 to update members on a recent report card delivered by Garner Economics, LLC, the same firm hired by major corporations to do site selection. It's a $135,000 report card, too, paid for through a HUD grant. Though the lengthy report can be read at LVEDC's website, Cunningham summed it up in one sentence. "Economic development is a game of competition," he explained, noting that the Lehigh Valley is at play against other areas in the state, 49 other states and the world.
Recruiting big business into the area will create headlines, but Cunningham cautioned that another very important aspect of economic development is keeping what you already have. He stated that 75-80% of job expansion comes from business that is already here.
"We undersell ourselves," Cunningham told Council. "We tend to be more critical of ourselves than the outside world is."
The Lehigh Valley is the 68th largest metropolitan region in the United States, generating $33 billion every year in GDP. It includes 15,000 companies. "That is a significant region," observed Cunningham. "We do not have to define ourselves merely by, 'Oh, we're close to Philadelphia, we're close to new York.' We are the Lehigh Valley."
According to Cunningham, the economic development strategy in any area has to play to its own strengths. Chief of these would be the area's infrastucture and access to markets. "We got good bones," Cunningham said of our road and rail systems.
Another "huge factor", said Cunningham is a low crime rate. "You never want to have any level of crime, but when you compare it per capita against other regions, we have a very low crime rate, even in our cities."
One of our negatives is the relative high cost of labor, compared to non-union parts of the country. "That's obviously not a negative if you're the person earning the money and trying to live a middle class lifestyle," Cunningham observed. In addition, the cost of electricity, taxes and air pollution are considered areas of weakness.
Target industries that would be good fits for this area include high performance manufacturing (e.g. Victaulic), high value business services (e.g. D&B), life sciences research (e.g. B. Braun), and food and beverage processing (e.g. Samuel Adams).
To achieve these goals, Garner has made a number of recommendations, and Cunningham told Council that LVEDC would roll out its own action plan in May. But he added that the area's economic development growth is already winning, referring to a recent "Site Selection" story listing the Lehigh Valley as the second fastest business market in areas of under 1 million people. Finishing second to Omaha, the Lehigh Valley had forty-six $1-million projects involving 50 or more employees. Omaha had forty-eight.
Garner had recommendations of its own, including a 1% sales tax and municipal consolidations of 63 municipal governments fragmenting the Lehigh Valley. Cunningham cautioned these are not recommendations of LVEDC. Council member Bob Werner complained, not only about the 1% sales tax, but said it would go back to LVEDC.
But Cunningham told Werner, "The study does not recommend anywhere that the money go to LVEDC. Wherever that came from is a fallacy. It doesn't say that." In addition, Cunningham said it is unlikely that a sales tax would happen and that decision would be made on a state level.
In response to Council President Peg Ferraro, Cunningham stated there is no large vacancy rate in office buildings, despite the building going on inside Allentown's Neighborhood Improvement Zone. But he stated the New Jersey migration into "bargain basement farmland" is over.
Werner continued his criticism of Cunningham and LVEDC. He complained that a similar report was done in 2010, to which Cunningham responded that these studies only have a shelf life of about three years. "That's how fast markets are changing, that's how fast you need to react," answered the CEO.
Werner then asked, "The bottom line is, what does this do for Northampton County?" He complained about the move of Bimbo Bakery from Northampton to Lehigh County.
"While you are living in the world of 'Are we getting as much as Lehigh County?', I will tell you that the outside world doesn't play that game," answered Cunningham. "You're competing with the world."
Cunningham went on to say there are 11 large, real prospects in Northampton County. "Let's celebrate that this region is on the United States map, and not get back to this parochial whining about where did this go, where did that go?" he argued. "The way we're going to win, is to win as a region. Northampton County, if it does its job, will get its fair share."
Cunningham also pointed out that while Northampton County lost 200 jobs to Lehigh with Bimbo Bakery, it picked up over 200 manufacturing jobs with the location of "Fresh Pets" to Hanover Township in Northampton County.
Cunningham told Werner he is trying to get votes while Cunningham is developing a regional strategy to get jobs.
Last week I told you that three heavyweights at Lehigh Valley Economic Development Corp. have been let go. Pete Reinke, VP of Business Development; Jean Mateff, VP of Administration and Investor Relations; and Bob Bilheimer, Director of Business Expansion, have all been shown the door. As I suspected, Northampton County Council were less than enthusiastic at the news. They were especially upset at the termination of Reinke.
Council President John Cusick: "Say what you want about Pete, at least he came here. He always answered our calls."
Scott Parsons: "Pete was our contact person? Who is our contact person? Do we have one?"
Ken Kraft: "We should demand that Don Cunningham [he's the boss] come here and tell us what is going on."
Bob Werner had no pithy comments, but did have a very depressing observation as a result of all his bed-time reading. According to the Fourth Economy Index, Lehigh County is rated #7 among communities "ideally positioned to attract modern investment and managed economic growth." Despite being practically identical, both geographically and demographically, Northampton County is rated 167.
Something is obviously wrong.
Cunningham has been President and CEO of LVEDC for over a year, but has made no appearance at Northampton County Council. But in a statement to this blog last May, he pledged to "use all of my ability to work with everyone, whether they supported my selection or not, whether they are in the urban core of Allentown or the slate belt of Northampton County to find a way to get it done."
Norco Exec John Stoffa voted against Don Cunningham. So did Norco Council member Peg Ferraro. So far as I know, these were the only two who voted against Cunningham as Lehigh Valley Economic Development Corporation(LVEDC)'s new head honcho. According to Stoffa, LVEDC needs a certified economic development professional. It's not a retirement home for politicians.
When retired politician Phil Mitman decided to step down as CEO, LVEDC Executive Committee Chair Don Bernhard pledged that Mitman's successor would be someone with "serious economic development credentials." He'd want to see a Certified Economic Developer certificate, experience in economic development and loyalty to the Lehigh Valley. "That is exactly what we are doing," Bernard told The Morning Call.
But Bernhard is a blowhard.
When push came to shove, insider politics won. Cunningham, whom I like, might turn out to be the best CEO that LVEDC has ever had. Lord knows, they could use some real leadership. But his selection is contrary to what was pledged.
I probably would have caved and voted for Don myself. He is that charismatic. But I see these three problems.
First, it is well known that Cunningham though Allentown's controversial NIZ was a bad idea. I had heard that from his closest stafers. But Cunningham was mysteriously absent on the day that LVEDC decided to give this funding scheme their endorsement. Then Allentown Mayor Ed Pawlowski, a Cunningham foe, gives him a ringing letter of endorsement. Then, after being selected as LVEDC's new top dog, Cunningham makes a statement supporting the NIZ. So it certainly appears that Cunningham sacrificed his principles to advance his own interests.
Second, he has no real private sector experience. How effective will he be in drawing private sector jobs to the Valley without massive doses of state incentives? State subsidies will harder and harder to come by in future Corbett budgets. So an inexperienced Cunningham will have to sell the Lehigh Valley largely on merit, not the bucks he can throw at a prospective employer. That's a tall task.
Finally, he is dealing with an unwieldy, stagnant and political board. It needs "at-large" members who are not political appointees, term limits for all and a thorough and competitive vetting process.
Updated 2 AM: Cunningham will be Alan Jennings' guest today on Lehigh Valley Discourse, 6 PM, WDIY (88.1 FM). (You can livestream it). Jennings is a NIZ Board member, and I wonder whether they'll break out the pom poms.
Updated 10:15 AM: Don Cunningham's Response: "There is much I could react to in this post. But, I’ve lived long enough to understand that deeds not words answers questions and respect is earned and not given.
"I only want to reassure the readers of these Ramblings that I am not heading off to the retirement home. To the contrary, I will bring a high-level of energy and engagement to make LVEDC a better and faster engine to market the Lehigh Valley and to work with everyone, public and private, to create jobs and opportunity and to grow our economic base. Our mission will be clear and focused. And we will be open and engaged. In the end, it’s about results. It’s not about how many meetings you do, how many conferences you attend or how many certificates are on your wall. I will use all of my ability to work with everyone, whether they supported my selection or not, whether they are in the urban core of Allentown or the slate belt of Northampton County to find a way to get it done. The premise upon which LVEDC was created is a good one. The Lehigh Valley is stronger in marketing itself and creating jobs and opportunity as a region than we are as component parts."
You may have read about it by now and for that I apologize. I will be resigning my position as Lehigh County Executive on July 8 to become the next president and chief executive officer of the Lehigh Valley Economic Development Corp., a regional, public-private partnership charged with marketing and helping to create jobs and grow the economy in the Lehigh Valley.
For the last 17 years, I’ve served in public office as a city councilman, a mayor, a state cabinet secretary and now the elected executive of Lehigh County. I’m a lucky guy. The voters and Gov. Ed Rendell gave me a chance to serve the people of my hometown of Bethlehem, Lehigh County and the Commonwealth of Pennsylvania. I never felt like I was going to work because I was doing what I loved.
Nothing has given me more satisfaction in those positions than my work in economic development, whether it was helping with the economic renaissance of Bethlehem following the loss of Bethlehem Steel, helping to locate Ocean Spray and Boston Beer in our county during an economic recession, or helping to bring 300 PennDOT workers to Hamilton St. to help revitalize Downtown Allentown when I was a cabinet secretary.
As we get older, we tend to figure out what motivates us and satisfies us and what we are good at doing. I love the Lehigh Valley. I love living here and helping to make our region better. I want us to always be the best region, with the most job opportunity and the best quality of life not only in Pennsylvania but the East Coast.
One of the challenges with the public sector work I always seem to pick is that the clock is ticking from the day you start. And, while I’m not at the final buzzer in my current position, I have entered the fourth quarter. My term as Lehigh County Executive ends next year. With two kids in college and another one heading there in two years, I don’t have the luxury to wait until the final day. Therefore, I will resign my position effective this July 8. I will start at LVEDC the next day.
I have loved my position with the county. The executive team we assembled is second to none. We are colleagues and friends. And, the work force and quality of operations in Lehigh County are as good as any I’ve seen. I will always remember my days here and I will miss working directly with the employees of the county.
My work, however, will remain here in the Lehigh Valley, where I was born and want to remain. I look forward to working with both of our counties, all 62 of our municipalities, our other regional organizations and our businesses to market our region and to grow the Lehigh Valley. My mission will be simple. Through partnerships at every level and in every sector, public and private, market our region, create jobs and opportunity and expand the economic base of the Lehigh Valley. I have dozens of ideas on how to do that even better. It’s with a mix of nostalgia and excitement that I close one chapter and open the next. The good news is that the story remains the same and together we have many more chapters to write.
Lehigh Valley Economic Development Corporation (LVEDC), the area's publicly-funded and beleagured economic development agency, has been operating without a CEO. Former Easton Mayor Phil Mitman stepped down earlier this year, and a "selection committee" embarked on a nationwide search for someone with economic development credentials, as opposed to a politician. Informed sources tell me that the CEO-creators have decided they like politicians after all. By an 8-1 vote, they have recommended Lehigh County Exec Don Cunningham as LVEDC's new CEO.
Since the selection committee includes all the LV heavyweights, Cunningham's appointment as LVEDC's new CEO is all but a sure thing.
Although it's no secret that Cunningham and Allentown Mayor Edwin Pawlowski have feuded in the past, it's interesting to note that Pawlowski provided the choosers with a glowing letter of recommendation for Cunningham.
Is this Cunningham's reward for remaining silent on the NIZ? Call me smug or misguided, but it sure looks that way.
If Cunningham accepts the job, and all indications are that he will, he won't be running for Bethlehem Mayor. That's a relief to Bob Donchez who had to consider Cunningham his most formidable rival.
Taking the job also means Cunningham will be stepping down as Lehigh County Executive, perhaps as early as next month. Under Lehigh County's Home Rule Charter, the Republican-controlled Board of Commissioners get to choose the new Exec, although he or she must be a Democrat.
Who's it gonna' be?
I hear Dennis Pearson is available.
Who voted against Cunningham?
How does Don feel about "Summer Hours"?
Stay tuned.
Updated 9 AM: Contrary to what some of my readers might think, I like Don and think he'll be an excellent CEO at LVEDC. I hope I haven't just jinxed him.
In the 2013 Bethlehem Mayoral race, many think that Council member Bob Donchez will square off against his friend, Lehigh County Exec Don Cunningham. As a popular two-term Mayor, Cunningham held the City together throughout the turbulent years that followed the demise of Bethlehem Steel. But Donchez, a former teacher and son of a police detective, has consistently been high vote getter in the last few races.
The word I am getting is that both Bethlehem Mayor John Callahan and Lehigh County Executive Don Cunningham have reservations about Allentown's 130-acre Neighborhood Improvement Zone.
Callahan, I'm told, raised a number of issues at a recent Executive Committee meeting of LVEDC about the lack of a "level playing field" for the rest of the LV and the major disruption that the NIZ could cause in the office "ecosystem."
Both are reportedly frustrated at the inability to get straight answers about the NIZ and feel this is a real impediment to marketing the Lehigh Valley.
So much for the NIZ promoting regionalism.
Prospective office tenants have reportedly been offered leases in the NIZ for as little as $5 a foot, triple-net. And still balked!
But this will eventually take a toll on other Lehigh Valley communities, as offices relocate for tax-subsidized rentals in Allentown. They'll take their EIT with them, too.
In the next few days, I'll attempt to get public confirmation of these private concerns.
Lehigh County Executive Don Cunningham said he felt like he was at the plate in the bottom of the ninth with two outs and eight runs behind. Like most who find themselves in that situation, Cunningham struck out in his attempt to dissuade Commissioners from overriding his veto of an Ordinance that starts the reassessment process. They voted against him, 8-1. Tom Creighton was the sole Commissioner who was willing to delay reassessment another year.
Cunningham certainly struck out with Commissioners and the Lehigh Valley Association of Realtors, but with Allentown homeowners, he may have hit a home run. That ball has not landed.
Before Commissioners voted, they gave the Exec his swings. Ironically, it is Cunnigham who started the reassessment process himself. But in January, when he received the actual data, he put on the brakes for two reasons.
First, Cunningham noted, as we all know, that the real estate market is sluggish, especially with higher priced homes. Prices there have dropped in recent years. So for those people, reassessment is probably a good thing because values will be reduced. But for people with lower priced homes, like those in Allentown and the boroughs, it's probably a bad time to reassess, especially since there is no way to incrementally increase assessments for people who have a hardship. "You will get your bill, and you will have to pay it," he explained.
Second, Cunningham is concerned about the impact of reassessment on nine different school districts and twenty-five municipalities in the County. Some of those school districts, like Northern Lehigh and Northwestern, have little in the way of commercial and industrial property. That will ultimately mean higher taxes for residential owners. "The individual's tax bill is all that matters to him," Cunningham observed, and it will be an unpleasant surprise for some.
Cunningham pleaded with Commissioners to wait just one year.
The Lehigh Valley Association of Realtors, appraiser Ray Geiger (read his op-ed) and two tea party members urged Commissioners to override Cunningham. But another group of people are in no rush. They're members of a special interest group called homeowners.
Rosemarie Dorward, who lives on 16th Street in Allentown, complained that ordinary people who have lived and worked in Allentown their entire lives "are being penalized. We don't get any tax breaks. ... Do we want more homes for sale in Allentown? You can't get people to buy now because of the school district." She urged Commissioners to listen to Cunningham and wait. "We don't need to tackle this right now. We have other major problems in this City and this economy."
Jeff Boore, who lives on 21st Street in the Queen City, asked, "Do you think we have more money? I have to tell you that personally, I'm at the limit. Where do you think this money's gonna' come from? You drive the value of my home up? That's a question. Does anybody have an answer?"
After an uncomfortable silence, Commissioner Vic Mazziotti agreed there's a lot of confusion about reassessment. He told Boore there will be no additional revenue to the County. While values may go up, "the tax rate will go down proportionately to generate the same amount of revenue. On the average home, the taxes will actually go down, and the reason for that is that there's been a shift in value to commercial and industrial property." Mazziotti added that reassessment is "strictly for fairness."
In contrast to Cunningham, Mazziotti argued that higher priced homes are actually under-assessed, while lower-priced homes are over-assessed.
Mazziotti's explanation brought Richard Sayre, who lives on N. 16th Street, to the podium. "It's he said, she said. What's the right way? ... We need answers. How can you pass something if you don't have all the answers of how it's going to affect everyone?"
In a brief discussion among Commissioners, cut short after Commissioner Percy Dougherty called for the vote, Tom Creighton was the sole Commissioner who thought the case had been made for waiting a year. Creighton noted that in each of Pennsylvania's 67 counties, assessment is done a little differently, In Blair County, Creighton observed, assessments are quite simple - $1 per square foot. That County has used that model for the last 50 years. "I feel we should delay in case the rules change," he concluded.
Dougherty, after pointing out that reassessment should be statewide and not county-by-county, inconsistently argued the County should nevertheless move ahead.
Scott Ott, noting the state is unlikely to make any changes any time soon, stated, "We can't pin our future on hopes."
In contrast to Mazziotti, who argued that reassessment is tax neutral, Commissioner David Jones delivered a brief sermon noting that the County must reassess to combat a "continuous decline in tax revenue."
After voting to over-ride Cunningham, Commissioners began making promises they would work with taxpayers who are adversely impacted, as they filed from the room.
"All your input is valuable," Chairman Brad Osborne told homeowners who left unhappy.
Since reassessment are universally unpopular, it is likely that Commissioners will be seeing many more unhappy homeowners in the months to come. But instead of blaming Cunningham, they'll be pointing angry fingers at Commissioners for moving ahead despite the recommendation of the County Executive.
I guess they showed him.
That's why I think Cunningham may have hit a home run last night, despite striking out.
The Express Times tells us that, in a unanimous vote on Wednesday night, Lehigh County Commissioners ignored Executive Don Cunningham's advice and decided to forge ahead with its first County-wide reassessment since 1991. Cunningham favored waiting a year.
Was it the right call?
Vice Chairman Scott Ott thinks so, and so does every single Commissioner, both Republican and Democrat. In a news release, Ott points out that there were over 700 assessment appeals in 2010. And although he does not say this, municipal bodies almost always end up on the short end of a property tax challenge. What Ott does say is that, since 2007, Lehigh County municipalities may have lost as much as $50 million in revenue, forcing them to raise taxes.
"The reality is that reassessment is already happening," claims Ott, "but only for the few who have the knowledge and resources to challenge their assessments, mostly businesses."
So far, the County has spent $305,000 for the reassessment process.
But Executive Don Cunningham, like John Stoffa in Northampton County, thinks the County should wait a year or so until the market settles down. In a telephone conversation late yesterday, he told me he will veto the Ordinance. "I'm greatly concerned about it and its impact on a lot of regular folks," he worries, noting that assessments could change dramatically for older homes.
"We have entire streets in Allentown valued at $50,000-60,000, that are now selling for $10-15,000. What value do we assign? $50,000? $15,000? This is a nightmare time to affix a value."
I have long advocated the need for reassessment. So did Executive John Stoffa. But in 2009, as a result of the slumping economy, he changed his mind. At that time, his Fiscal Affairs Director, Vic Mazziotti, stated that the real estate market is so volatile that it would be difficult to find comparable home prices. But Vic was always bothered by those incessant assessment appeals, which do favor those with the means to mount a challenge. As a recently elected Commissioner, he believes the best time to reassess is now.
Despite the unanimous vote that includes members of his own party, Cunningham wonders whether there are political motives behind this sudden urgency.
"They want to show they're in charge. But this is not the right issue on which to stake out that ground," he noted.
Ironically, despite their differing views, both Cunningham and Ott are concerned most about homeowners with limited means.
Lehigh County Executive Donald T. Cunningham, Jr., yesterday presented a proclamation to IronPigs officials, encouraging public support as the Triple-A minor league baseball team enters its first-ever championship series.
On Thursday, anyone not wearing a pig nose will be shot on sight.
At high noon in Coca Cola Park yesterday, with the Iron Pigs preparing to play Scranton later that day in their quest for a wildcard berth, LC Exec Don Cunningham was at the plate.
Last year, his budget enacted a 16% tax hike in the middle of a recession, causing many Lehigh County Republicans to flee to Canada and become lumberjacks.
Strike One.
Early this year, those same Republicans returned after learning Canadians smoke weed and have socialized medicine. They got back just in time to reject Chairman Dean Browning at the polls. Ironically, they rid the Board of Commissioners of a financial wizard who was instrumental in helping Cunningham keep that 16% tax hike from becoming a 36% tax hike. They hated the fact that a Republican would work with a Democrat. Especially one who smiles.
Strike Two.
What Cunningham did, when he finally had a chance to speak about what the hell has been going on, was hit the ball out of the park.
Now it's no surprise that Cunningham is a gifted speaker. Even his political foes will grudgingly admit that. But what really impressed me about the Exec's speech yesterday was not his delivery or easy style. Not even the small tax cut, which will save homeowners an average of $30 next year. I was impressed most by his defense of the embattled public employee, his response to the criticism he took last year for finishing with a $5.4 million surplus and his comments about divided government, which I'd call bipartisanship.
Defense of the Public Employee
All of us, me included, have a tendency to generalize when it comes to public sector workers, and point to their generous wage and benefit packages. But yesterday, Cunningham called that a myth. "For those who say all government workers have overly-generous taxpayer-funded wages and benefits, send them to Lehigh County," he said, laying out the facts in Lehigh County.
* Next year's workforce will be as small as it has been since 1990.
* Generous pensions? The average County retiree gets less than $900 per month.
* County workers kick in 5% of their pay for their pension.
* All employees, both union and nonunion, pay for around 20% of their health care costs, and are actually paying $2.1 million more than they did in 2006.
Surpluses lead to tax cuts
We've all seen what happens when local government finishes a year in the red. Three years of $8.5 million in red ink pretty much destroyed Bethlehem Mayor John Callahan's Congressional aspirations, to say nothing of the suspicion with which he is now regarded by members of City Council and the public. Cunningham finished 2010 with a $5.4 million surplus, which should have been cause for joy. It's called "beating the budget," something Cunningham has done every year since being elected as County Exec. But in the crazy world of Joe Hilliard Republicans, finishing the year with a surplus is a bad thing, too. Who knew?
Commissioner candidate Scott Ott and Joe Hilliard, who was then King of the Tea Party, published news releases and sent emails insisting this surplus was proof positive that Cunningham, as well as Chairman Dean Browning, had failed to "fight for taxpayers."
Dean Browning explained this was nonsense, using all kinds of numbers that went right over everyone's head. He's more accountant than politician.
Cunningham yesterday explained it in terms we can all understand.
"In 2010, our managers held the line on spending and beat our budget by $5 million. By some, we were criticized for this. That could be rectified quite easily - and I suppose i could look like a genius for getting the budget exactly right - by spending every last nickel in a line item. I won't do that. I learned early in politics that there are very few good deeds that go unpunished."
Beating the budget in 2010 is what has enabled Cunningham to propose his modest tax cut.
"Saving that money in 2010 allowed us not to spend the $4.3 million in Tax Relief Fund money that was budgeted as part of this year's budget. Therefore, in 2012, we propose to eliminate the Tax Relief Fund and give the full remaining $4.37 million back to the taxpayers in the form of a one-time credit."
BiPartisanship Works
Read Don's speech, which is below, and forget for a moment that he wrote it or that he's the Exec. Now imagine LV Congressman Charlie Dent is County Executive and that is his speech. I frankly believe that, except for some differences in style, the message would be petty much the same.
Cunningham hints at that himself, noting that there has been divided government in Lehigh County since he's been in office. Like me, like Dent, like most of us, Cunningham thinks people can be from different parties and still work together. And he singled out two Commissioners who have always been willing to reach out across the aisle.
"Commissioner Browning, a Republican, and Commissioner [Bill] Hansell, a Democrat, have epitomized the thoughtfulness, toughness and knowledge of County government and public finance that have made Lehigh County great. They have both put their public service above their politics and delivered results by putting hard work, a commitment to their ideals and cooperation above grandstanding - and Dean paid a dear price for it this year. We all owe both of them a debt of gratitude. I will miss them both."
People like Browning get it and understand the need to work together. Many of the items in Cunningham's 2012 budget, especially the employee contributions, are the result of his steady advocacy since his early days as a candidate.
Tom Muller
But Browning is an anomaly. Not one Commissioner candidate, Democrat or Republican, responded to a request from Director of Administration Tom Muller, dated June 1, asking for specific suggestions and recommendations.
And jokers like Joe Hilliard, who conned the local tea party into giving him money for an audit of Lehigh County that is now nearly two years overdue, has resigned without keeping his promise.
Cunningham said it better than I could, and his speech is below.
According to The Morning Call, it's a no-tax increase budget. Cunningham cobbled it together with NO help from ANY of the Commissioner candidates, even though each of them received a letter asking for suggestions.
Who: Lehigh County Executive Don Cunningham
What: Lehigh County 2012 Budget Address
When: 12:00 PM on Wednesday, August 31
Where: Coca-Cola Park
Club Level
1050 IronPigs Way
Allentown, PA 18109
A Sunday Express Times editorial claims it's time for LVEDC CEO Phil Mitman to say good-bye, not so much for the tweet heard 'round the world (and first reported on this blog), but his lousy attempts at damage control.
"In a clumsy damage-control effort, Mitman was at a loss to say whether Williams was fired for misrepresenting the organization’s 'TGIF' policy — or for leaking the truth. Either way, it created an 'oops' moment for a private tax-supported group with a record of shielding its business from the public."
As it happens, Mitman's contract is set to expire next year. Around that time, two people will be looking for a job. One of them is Bethlehem Mayor John Callahan. The other is Lehigh County Executive Don Cunningham.
