Coleman Measure For Increased NIZ Transparency Passes State Senate

Good luck with that!

That's what I thought when I first heard that State Senator Jarrett Coleman was seeking more transparency with  Allentown's Neighborhood Improvement Zone (NIZ).  After all, his predecessor (Pat Browne) authored legislative changes in 2021 that basically prevents the public from seeing revenue sources created as a result of the NIZ. Moreover, Coleman is a freshman senator with no real ties to anyone, except perhaps for the people who voted him into office. But he did it. On Wednesday, he persuaded the state senate to adopt a fiscal code that included language to make Allentown's NIZ more open to public eyes. 

The NIZ is the mother of all tax breaks. It was buried in a Fiscal Code Bill penned by former State Senator Browne 14 years ago. Most legislators who voted for it had no idea it was even there. It creates a special tax district in Allentown, the only one of its kind in the state. It enables developers to use state and local taxes generated in the zone to finance debt service on projects financed within the special tax district. Because developers can use state and local taxes to finance buildings, they can charge rents below the going market rate. This incentive attracts businesses that might otherwise shun Allentown. But instead of attracting nonlocal businesses, many of the tenants inside the NIZ are formerly from other parts of the Lehigh Valley.

In his remarks to the State Senate, Coleman stated: 

“Over $500 million has been invested in Allentown’s Neighborhood Improvement Zone (NIZ) over the last decade. To date it has not been possible to conduct objective analysis to determine the success of the program in meeting its legislative intent.

"In June of 2021, the fiscal code was changed to stop the public from learning how tax dollars are moving through the NIZ. Taxpayers were also denied the ability to understand the individual sources and amounts of revenue that were being generated from taxpayer dollars. Accessing this information is vital to understanding whether the NIZ functions as advertised and sold to the public. Has it been an engine of economic development or real-estate development, and at what cost? These two things don’t always line up. If we’re going to answer that question, then we need access to specific financial details.

"The original fiscal notes, or calculations of cost to the Commonwealth, indicated that there wouldn’t be any negative impact to tax revenues. That conclusion assumed that activity in the NIZ was new activity, and not shifting from other municipalities. There are questions about whether that is what happened. Hundreds of millions of dollars in tax revenue have been attributed to the NIZ. Questions surrounding the implementation of the NIZ law and its impact on the overall financial health of the Commonwealth can only be answered if we have access to this information.

" Taxpayers have a right to know if their money is being spent wisely. Today, the changes we are making to the fiscal code will ensure that the public has access to information around how tax dollars are being spent. These changes are vital for transparency and to ensure that we all have access to the information needed to evaluate the effectiveness of the program.”

Senator Nick Miller, who also represents Allentown, spoke against Coleman's proposal on the Senate floor, claiming it "adversely affects the City of Allentown and the Neighborhood Improvement Zone.

"This program has been phenomenol in the city and our neighborhoods.This legislation would kill at least $300 million in projected projects in the NIZ. Those are family sustaining jobs that our going to be killed by this leagislation.

"Thisprogram is also audited annually by the state,and those reports are made public. ... Why just this program?."

Perhaps because it's the only one of its kind in the state, and it might be discouraging economic development outside of Allentown."

According to Allentown's website, more than $1 billion is real estate development has already been completed. With that kind of money, much of it from government tax breaks, the potential for mischief and waste is obvious. Moreover, the NIZ might be helping Allentown at the expense of other municipalities and businesses who also have family sustaining jobs. How could anyone rationally oppose a little more of a spotlight on the finances? "Sunshine is the best disinfectant." 

The Fiscal Code adopted by the Senate on Wednesday is an essential part of s state budget. The House has yet to act. Instead of working on a budget, they are in recess until mid-September. 

Who's the NIZ Arson Bug?

September 25, 2016. A fire breaks out in center city Allentown at 20 S Hall Street. It is ruled an arson. Same thing for a 2014 fire at 27 S 8th St and a 2015 blaze at S 8th Street, near Walnut.

What do these arsons have in common?

All are smack dab in the middle of NIZ projects. All the buildings held some sort of historical significance that would make it tough, even for Allentown's lax planners, to approve a demolition. But thanks to these arsons, all will get a raze and repair order slapped on then and can be automatically get torn down.

Public safety, you know.

I'm accusing no one, but these strangely coincidental fires demand a thorough investigation.

Bethlehem Tp Follows NorCo, Hanover Tp, To Condemn NIZ Hotel Tax Grab

Bruce Haines

Hotel Bethlehem Managing Partner Bruce Haines, a regular at City Council meetings, was with the visiting team on August 1 at Bethlehem Township's Board of Commissioners. Before a lively crowd of about 35 people, he was there to discuss a topic most only notice during their annual vacations - hotel taxes. He left a happy man because the Board voted to adopt a resolution condemning recent changes in the hotel tax collected inside Allentown's Neighborhood Improvement Zone (NIZ) that have a negative impact on hotels everywhere else.

Bethlehem Township's vote follows a similar resolution by Northampton County Council on July 21 as well as Hanover Township's Board of Supervisors on July 26. According to Hanover Township Manager Jay Finnigan, other Lehigh Valley municipalities are scheduled to vote on this matter in coming weeks.

Hanover and Bethlehem Townships are the two local municipalities that first filed legal challenges to the NIZ law, based on its diversion of earned income taxes. Sixteen townships and boroughs, along with a school district, eventually joined them. State legislators ultimately amended the NIZ law to remove the controversial language that authorized an EIT tax grab.

Now it's a diversion of local hotel taxes collected inside the NIZ.

Northampton and Lehigh County will collect about $4.5 million this year from a 4% hotel room rental tax imposed on the Lehigh Valley's 57 hotels. A healthy chunk of this money funds Discover Lehigh Valley, the area's tourism agency, and Lehigh Valley Economic Development Corporation (LVEDC), whose focus is on getting and keeping jobs. Lehigh County uses some of its hotel taxes to pay for the Iron Pigs. Northampton County hosts an annual round of hotel tax grants for everything, from the Blue Valley Farm Show to the State Theatre.

There will be less money to go around this year, thanks to a last-minute change to Allentown's controversial Neighborhood Improvement Zone (NIZ). Buried in the Fiscal Code by Senator Pat Browne as part of the state budget, it's yet another handout to developers in what is already the most heavily subsidized tax zone in the state. Hotel taxes collected inside the NIZ will be diverted to build new or upgrade existing hotels.  This means less money for the tourism bureau and the job creation that LVEDC CEO Don Cunningham has engineered.

"Hotels don't need subsidies to be built," Haines told Commissioners."If the demand is there, and the developer puts 20% down, he can get financing from the normal markets without ever having to be subsidized by the state, the City, or the County or anybody else."

He said the diversion of hotel taxes inside the NIZ is "unfair competition" to developers who did it the "old fashioned way" and used their own money. he observed that hotels outside of the NIZ will now fund a tourism and economic development engines, but hotels inside the NIZ making no contribution will reap the benefit.

"I know highway robbery when I see it, and this certainly qualifies," observed resident Craig Storrs, Jr.

By a 4-1 vote, Commissioners approved the resolution condemning the diversion of hotel taxes, and Haines stated he would ask Bethlehem City Council to express it approval, too.

The sole No vote, Michael Hudak, denied that he was opposed because of his membership in a trade union. "You know me," he said after the meeting "I vote what I think is right." He added that the only real change would have to come from the state legislature.

Updated 11 am:  Hellertown Borough also adopted a resolution at their ugust 1, 2016 meeting, condemning the hotel tax grab.

NorCo Council Poised to Condemn NIZ Hotel Tax Grab

Hotel taxes from Historic Hotel Bethlehem
will subsidize its competitors 

Last Wednesday, at about 3 pm, a state revenue package that included a lengthy Fiscal Code that no one had read was introduced in the state legislature. It went through the state house (you can see the votes here), state senate (you can see the votes here), and despite Ken Kraft's denials, was in fact signed by Governor Wolf. This all went down in about four hours. Buried on page 195 is a provision that diverts NIZ hotel taxes away from Discover Lehigh Valley, the Lehigh Valley Economic Development Corporation (LVEDC) and Lehigh County. Instead of promoting tourism and economic development,the money will go into the pockets of hotel developers. According to The Morning Call, it's about $300,000.

This impacts Northampton County because the services provided by Discover LV and LVEDC benefit both counties. Less money for them hampers their ability to provide service to the Lehigh Valley, including Northampton County.

"Nobody knew about this," noted NorCo Council Prez John Cusick at yesterday's Finance Committee. "Nobody here certainly knew about it. LVEDC and DiscoverLV woke up to find out they were going to be short $300,000."

Cusick had problems with the way this legislation was adopted and the diminution of services that will necessarily follow from DiscoverLV and LVEDC.

Ken Kraft is a union business agent who has represented trade union workers inside the NIZ, where he helped negotiate a Project Labor Agreement for the arena and may very well be conflicted. He attempted to downplay the obvious diversion. Kraft indicated Northampton County will be paying about $20,000 more per year to Discover LV and LVEDC. "It's really insignificant in the whole pot."

Council members who have no financial interest in building or renovating hotels inside the NIZ had a much different view than Kraft.

Matt Dietz noted that hotels outside of the NIZ will be paying into the hotel tax program while hoteliers inside the NIZ will be doubly benefiting by being able to divert hotel taxes for construction while still receiving services from DiscoverLV and LVEDC.

"It didn't seem to be done on the up and up," added the Colonel, Hayden Phillips.

"It just doesn't sound right," agreed Peg Ferraro. "All these other hotels are contributing hotel tax, but this group of hotels get to keep the taxes. ...It's just a very flawed thing ... like Obamacare. Once you pass it , you can read what's in it."

"That's a really poor analogy," complained Kraft.

Tonight, Council will introduce a resolution condemning the uneven playing field created by requiring hotels to pay a tax that benefits other hotels that compete against them. If adopted, it will call on the legislature to repeal the diversion of hotel taxes.

NIZ Waterfront Developer Getting $1 MM From State

You'd think that if the state is allowing you to use almost all state tax revenue to fund future development, that would be enough, right? Wrong. The Waterfront Development Co, one of the NIZ developers in Allentown, has sought and is getting another million from the Commonwealth Financing Authority for "Riverside Road and Trail." The money was approved July 1

In a poverty-stricken city like Allentown, these handouts to the rich are obscene.

Ce-Ce Gerlach, Sell-Out

I first grew suspicious of political activist and Allentown School Board member Ce-Ce Gerlach last Fall. Allentown students, even middle school students, were being encouraged to cut classes by the Queen City's very own pied piper, Michael Frassetto. I asked her, as someone whom I had been told was a leader, to speak out. She never did. Nor did she bother to respond to several messages from me

She failed my basic test. She is neither accountable nor transparent.

But she's been very useful for NIZ advocates like J.B. Reilly. On television shows concerning the NIZ, she has often been propped up as an anti-NIZ voice, mostly because her arguments are easily defused. She's been a useful idiot. More informed NIZ opponents like Dr. Steve Thode or Michael Molovinsky are usually passed over.

She now has her reward. On her Facebook page, there's this: "I have been accepted into Desales University to earn my degree in Management & Leadership. Thank you City Center (never thought I'd say that...lol) and Trexler Trust for this opportunity."

Lots of people are oohing and ahhing, many of them the very same people who have spoken out against Fed Ed.

But like him, she is also a prostitute. Crony capitalists J.B. Reilly and the Trexler Trust will pay her college bill at DeSales. She will claim to be a voice of the people, so long as those people are Democrats. But she is now officially a sell-out, a servant of the urban growth regime

Gee, I wonder how anxious she will be now to pursue an appeal in the Allentown School District challenge to the NIZ.

While they crony capitalists play her, she will play the crowd and likely will present herself next year as a candidate for Allentown City Council

Has NIZ Fizzed?

Finally, some good news from Downtown Allentown and perhaps the truth, too. According to the latest Morning Call report by multiple reporters (to let you know they're really, really important) developer J. B. Reilly has shelved City Center Five, at least for now.

"For us to build Five City Center Innovation Tower we need a large anchor tenant," City Center CEO J.B. Reilly said Tuesday. "We don't have a large anchor tenant committed."

Here's what J. B. Reilly meant:

"There are just no major office users left in the Lehigh Valley for us to poach and move to Downtown Allentown. We also can't find another major user like National Penn Bank to steal from another Pennsylvania location and relocate them to Allentown using the NIZ subsidy to do it. They just aren't there. We are disappointed and we are hoping that my good friend Pat Browne will come up with a solution to our problem, I know he can do it."

Senator Browne commented that perhaps the NIZ wasn't enough to help a now struggling City Center and Allentown. "We may need to provide Allentown with more subsidies to help them attract the kinds of businesses that don't appear to be interested in Allentown any longer." One option would be to allow Redevelopment Capital Assistance dollars to now be used in the NIZ, said Browne. "We can't let, City Center, I mean, Allentown, down. They are, too big to fail."

This is oh so-so do-so-pa.

(Note: My "quotes" are parody.)

Traub Unanimously Re-Appointed to NIZ Board

Sy Traub, who chairs the Board that administers Allentown's controversial Neighborhood Improvement Zone (NIZ), was unanimously re-appointed by City Council last night at a poorly attended meeting. The only person to speak against Traub was Allentown Tenant Association's Kenneth Heffentrager, who complained that Traub is unwilling to listen t the public. His concerns were brushed aside with little discussion.

Traub himself was not present.

Council also appointed two other persons to the NIZ Board.

John I Williams, President of Muhlenberg College, and Tiffany Polek, Principal at Mosser Elementary, were also appointed.

In her application, Polek stated she would be "an advocate for our families and our residents. My education background would hopefully add value to the Board."

Williams stated he'd be there "to foster economic development."

Allentown: A Pa. Version of Detriot

The difference between a guy like Steve Thide and myself is that he knows what he is talking about and I don't. It's Dr. Stephen Thode, incidentally, and he is an Associate professor of Finance at Lehigh University, as well its Director of the Murray Goodman Center for Real Estate Studies. He has an extensive knowledge of real estate trends. For a time, Bethlehem was lucky to have him as a member of its Planning Commission.

From the onset, he has been a vocal opponent of Allentown's Neighborhood Improvement Zone (NIZ). Although Morning Call columnist Bill White didn't go quite so far as Alan Jennings did in singing the praises of that Potemkin Village, he did make the mistake of claiming that Allentown is "much better off" than it was before Edwin Pawlowski was elected Mayor.

In an op-ed published by The Morning Call, Dr. Thode explains why both Bill and Alan have it wrong. Calling the NIZ "Pennsylvania's version of Detriot," Dr. Thode notes that the City not only poached businesses from outlying communities, but did so from within the City itself.

"In fact, the NIZ is the most distasteful example of crony capitalism of which I am aware: Wealthy businesspersons make sizable campaign donations to politicians; in turn, those politicians pass legislation to divert taxpayer funds to some of those donors; those donors then use some of those taxpayer funds to make more campaign donations to ensure that the cycle repeats itself. Endlessly.

"Does that make the people of Allentown "much better off?" I suggest you ask them."

Updated 4:40 pm: I spelled Detroit wrong, but Detriot does the trick as well.

The Real State of the Shitty in Allentown

There were actually two State of the Shitty addresses delivered this weekend. The first was delivered by Fed Ed. The second came in the form of a rambling Morning Call op-ed. That was delivered by Alan Jennings, who is essentially the propaganda minister for the urban growth regime that's really in control in Allentown. I'll tell you about them and close with a more realistic view of the Queen City.

Fed Ed's State of the Shitty (WFMZ-TV69 Video - Part One and Part Two)

Allentown's Constitution, its Home Rule Charter, requires the Mayor to report every January, to both the City Council and the public, on "the financial and general condition of the City." Over the years, this mandate has been perverted into a gala event. This year, like last year, those who wished to hear Fed Ed's pearls of wisdom would have to pay for the privilege  It was thirty bucks a pop for a chicken lunch in the fifth floor ballroom at the $250 per night Renaissance Hotel.

I counted somewhere around 80 people at this event. But the actual paid attendance was just 56, far less than the 296 people who paid last year. The only elected official I saw was Lehigh County Exec Tom Muller. Not one member of City Council attended. Even people who work for the City made excuses not to be there, including the police chief (he was checking his sock drawer) and one other deputy chief (root canal). Local pols like Mike "Darth Voter" Schlossberg  and Pete Schweyer were busy getting pointers on ghost voting.  Jenn Mann was no doubt trying to score Superbowl tickets. Crony capitalists J.B. Reilly, Tony Iannelli, Lee Butz, union bosses and Bob Bennett were nowhere to be found. Alan Jennings, who controls the Lehigh Valley poverty industry, was also absent. But he was no doubt excused, as you'll see below.

His Goner's audience consisted mostly of rotarians, preachers and a few vultures like me, who were thinking it would be just like the FBI to come in and arrest him in the middle of his speech.

I saw no FBI agents, but noticed that a few of the waiters were speaking into flower arrangements. Downstairs, in the hotel lobby, Allentown good government activists Robert Trotner, Lou Shupe and a few others mounted a protest of some sort.

According to an unscientific poll on this blog, 94 percent of 150 participants believe that Fed Ed is going down, sooner or later. Sources tell me his lawyers are meeting with the feds this very week.

This was my first time inside a Neighborhood Improvement Zone (NIZ) building. Even from the fifth floor, there is a commanding view of the sea of decay surrounding this tiny, but $1 billion, oasis of splendor. A Potemkin Village with a sub-par minor league hockey team acting as its draw.

Fed Ed is actually the first person I saw when I finally found the fifth floor. I asked him when he is going to resign, but he walked right by me and into a nearby can, pretending not to hear. Next I bumped into a nervous Christine Bauder, who put together this event. I assured her that I'd be good. I don't like to disrupt speeches.

When I made it inside the ballroom, the first person to greet me was none other than Lisa "Lady MacBeth" Pawlowski. She has solved Allentown's homeless problem, by the way. Less than a year ago, she was misinforming people that I "get paid every time someone opens his blog. So every click is a win for him. Controversy means more money for him. So folks, if you support your mayor, don't ever read Bernie's blog. Make a statement by cutting into his income."

That's actually complete nonsense. I make no money blogging. Not everyone is as money hungry as she or her husband have been.

Lady McBeth never mentioned her insult, but was quick to introduce me to her daughter. She dragged both of their children to this State of the Shitty, which by itself has to be some form of child abuse. One friend tells me this was her way of taking a dig at me, and that her implied message was, "Look what you're doing to our children!"

If this is so, it failed. For the sake of their children, Fed Ed needs to resign.

Fed Ed, as most news accounts have already told you, failed to address the biggest problem facing Allentown - him. An investigation into political corruption has paralyzed the City. He avoided all mention of the elephant in the room, choosing instead to talk about the "cool factor." He joked a bit about the snow, but failed to address why he failed to call a snow emergency. This made it difficult for plow trucks to get through along snow emergency routes. While taking the media to task for not writing enough about the money saved by the water lease, he never explained how many trucks and personnel were shifted into the Lehigh County Authority and were hence unavailable to deal with the storm.

He bragged about a 30% drop in crime since becoming Mayor, although he failed to recognize that many people have simply stopped reporting.. He never addressing the crime going on at City Hall, in which three officials have been charged, along with an entrepreneur. He talked about purchasing additional cameras to reduce crime, but never discussed why he sweeping his offices for electronic bugs and purchased burner phones. Those seem more like the actions of a drug lord or Mafia don than the Mayor of Pennsylvania's third largest city.

But he is counting trees. This year, Fed Ed plans to nail down eactly how many trees there are in Allentown. So there you have it.

Embattled as he is, His Goner is playing the religion card heavily. The Moody Bible Institute grad made sure that lots of preachers came, and made sure to thank them. Among those he single out for applause was the Lehigh Conference of Church's Jack Felch, who "streeted"  about 30 homeless men into 31" of snow last week.

The audience applauded, save for one person.

Me. I booed.

He finished his speech with a slick upbeat video portraying Allentown (and no doubt Fed Ed) as a "comeback kid" made possible by the Neighborhood Improvement Zone (NIZ).

Alan Jennings' State of the Shitty.

Alan Jennings is Executive Director of CACLV, which effectively puts him in control of the poverty industry created by LBJ's War on Poverty. His organization has established many worthwhile programs, from Head Start to the Second Harvest Food Bank. Jennings likes to think of himself as the spokesperson for those who have no voice. But what he has really become is a shill for the wealthy. He is the Propaganda Minister of the urban growth regime.

Like a priest in the old Catholic Church before Martin Luther came along, Jennings sells plenary indulgences to the wealthy in exchange for a few table scraps tossed his way. These days, they're called tax credits. In a Morning Call op-ed, Jennings delivers his State of the Shitty.

Blessing the NIZ, Jennings goes on to say, "We can never overstate the heroic work being done by our mayor and his administration, state Sen. Pat Browne, J.B. Reilly of City Center Investment Corp., Sy Traub and the board of directors of the Allentown Neighborhood Improvement Zone Development Authority and many others."

Heroic?

It takes no courage (much less, heroism) to spend someone else's money. When we start believing that those who spend the public's monies are "heroes," we are dead as a productive society.

I once portrayed Jennings in a pimp costume since he's been called the poverty pimp. But the reality is that he is more like a prostitute who sells himself out to the wealthy and praises them and their agendas in exchange for a few dollars here and there. He is a night-time walker dropped off on Hamilton while Fed Ed and J.B. Reilly circle the block until their trap is full.

Jennings continues to bless the NIZ, while taking an unnecessary shot at those who live in the suburbs in what increasingly appears to be a War on the Suburbs as opposed to a War on Poverty.

"Just about everyone has benefited: The tax base is on the mend, blight is being eliminated, jobs are being created. Fears about the whole effort being a disaster for the poached suburbs have not materialized. And, yes, people have gotten rich. You see, that's what happens when a market is robust. The best community development program is a viable market and, while we need our neighbors in the suburbs to stop cowering in their cul de sacs and come downtown to further strengthen its viability, we are on the right track."

To be clear, the whole effort has been a disaster, but not just for the poached suburbs. It's been a disaster in Bethlehem and in Allentown itself because the NIZ provides tax breaks for local businesses who move there. Jennings' offices are in South Bethlehem. If he looked out his window, he'd see the enormous difficulties the Benners and Perrucci are having in developing 900 new beds. Or the fact that, other than the Social Still, not a single CRIZ project has had shovel meet dirt. But facts are stubborn things.

Jennings wants a little affordable housing in exchange for his cheerleading. Do the math, Alan. Let's suppose 10,000 housing units in Allentown need serious rehab. Let's say, modestly, the cost of the average rehab is $25,000. That's $250 million! Where will that come from, Alan? From JB? Joe Topper? The Butzes? Mark Jaindl? Yeah, right. Oh, and where do the current tenants go after the rehab and the higher, unaffordable rent kicks in? Macungie? Emmaus?

The one thing that neither Jennings or Fed Ed bothers to address is Allentown's failing schools.

The Real State of the Shitty

Gentrification in Allentown is doomed to fail for the same reason it failed in the '70s, when two bona-fide historic districts were in in full on development mode - Old Allentown and Old Fairgrounds. The problem was and remains the Allentown School District (ASD). Once the brave pioneers - who weren't gay or lesbian couples - had kids, they realized those kids had to be educated in the ASD or a struggling Allentown Diocese school system, which was consolidating and closing schools. So they sold their restored historic houses, moved out of their restored historic apartments and left the once promising neighborhoods to the growing influx of transient "new residents" who were poorer, less educated and didn't care about the ASD or taking care of their property for that matter.

Many of the larger single family houses were converted to more multi-family housing - blame the City Zoning Hearing Board for that and the City administration for not stopping it - and the inexorable cycle of neighborhood decline got seriously worse. Meanwhile, back on Hamilton Street, the City focus continued to be on the downtown. "Forget the neighborhoods surrounding the Downtown," the experts scream. "If we don't save or improve Hamilton Street, the town is lost," they yell.

The opposite was and is true.

Allentown ignored its neighborhoods and the school district problems get so large that they became almost impossible to solve. So the City created KOZ property after KOZ property, investing massive amounts of State (RACP and DCED money) and Federal funds in one failed plan after another until Pat Browne and J. B. Reilly came up with the mother of all subsidies, the NIZ! Again, the focus was on Hamilton Street, not the neighborhoods and of course, here we go again.

For a few old-timers, it's "deja vu all over again." Only worse.

Shula's Shuttered

It's oh so So Do So Pa. Shula's shuttered, according to The Morning Call. I hear that Crust, located at the PPL Center, might bite the dust as well. J.B. Reilly claims the NIZ is "definitely working."

It is for him.

What's your take on this latest development in the Land of NIZ?

How the Urban Growth Regime Has Failed the Lehigh Valley

In discussions on this blog yesterday, understandable attempts were made to place all the blame for the Allentown pay-to-play scandal on Democrats. It is, after all, a one-party town lacking some of the checks and balances that would otherwise exist. But this argument assumes that Democrats actually govern in Allentown. They don't, and haven't for some time.

I've written before that democracy is oh so passé in Allentown. It's been replaced by what some of us call an urban growth regime in which crony capitalists (mostly Republican) call the shots through their pay-to-play puppets in local government (mostly Democrat). Fed Ed might run for Governor or the U.S. Senate, but NIZ Kings J.B. Reilly and Joe Topper are the de facto government. Efforts to extend that reach Valley wide, through an unelected group of aristocrats calling themselves The Lehigh Valley Partnership, have been less successful.

You won't find a website for this gang, once known as the Big Eight. They took it down as soon as people like me became suspicious They prefer the shadows. Before Reilly, they undoubtedly were the most powerful special interest group in the Lehigh Valley.

Formed as a nonprofit in 1985, The Lehigh Valley Partnership has had a hand in nearly all of local government's major spending plans and decision for the past three decades.

According to its last IRS report, filed in 2010, its members included L Charles Marcon, L Anderson Daub, jan Heller, Bert Daday, Robert Black, Joseph Brake, Greg Butz, Michael Caruso, Robert DeSalvio, Jeffrey Feather, Steve Follett and Dr. Alice Gast. Not listed in this report are the publishers of both dailies, which have traditionally been considered ex officio members. Its purpose is "to provide resources to the community, in partnership with the public sector, for initiatives which improve the quality of life and economic prospects of the Lehigh Valley area." Sounds pretty good, eh?

This "public-private partnership," of course, is complete nonsense. A public official's fidelity belongs to the public, not to enriching Abe Atiyeh by purchasing land from him at nearly three times its value. And someone like J.B Reilly has absolutely no duty to make life better for anyone in Allentown other than himself. The whole notion of government and business working together for the greater good is a myth.

But most of the resources provided to the community come from their "partners" in the public sector. The more these resources are spent, the richer this group gets. That seems to be their real goal.

Though the Lehigh Valley Partnership hosted a County Executive debate in 2013, there is no online record of its tax returns since 2010. It's possible that JB Reilly has assumed complete control, or that the group has set up another nonprofit.

Behind closed doors, the Lehigh Valley Partnership has been a driving force behind the following:

(1) Revitalizing Allentown. - Long before Fed Ed arrived on the scene, the Lehigh Valley Partnership decided that the key to a healthy Lehigh Valley is a healthy Allentown. It funded a Brookings Institution "Back to Prosperity" Study to tell it exactly what it wanted to hear, which was then accepted as Gospel by the media and mouthpieces like Alan Jennings, who has always sung well for his CACLV Supper. This would become the philosophical basis for the NIZ, gentrification and other city tax incentives.

(1) The $29 million in economic development incentives, i.e. corporate welfare, in Northampton County's controversial $111 million 2001 megabond.

(2) The 2000 Hotel Tax, including a formula that requires that a good chunk of the dough help fund The Lehigh Valley Economic Development Corporation.

(3) The Open Space Referenda in Northampton and Lehigh County, feel good legislation that would create small islands of green amidst seas of sprawl, without any meaningful attempt at land use regulation.

(4) Widening Route 22. Former Lehigh Valley Planning Commission Exec Director Mike Kaiser was an ex officio member of the LVP, and they wanted that highway widened ... now.

(6) Attempts to Control MSM. Publishers at both local papers were members of the LVP board.

Traditionally, the Lehigh Valley Partnership has been the puppeteer pulling the strings at CACLV (Alan Jennings), LVEDC (Don Cunningham), NMIH (Donches), RenewLV (Joyce Marin), Greater LV Chamber of Commerce (Tony Iannelli) and LVPC (Bradley). Much of its work and ideas have been good. But these people are unelected and their allegiance is to themselves or their stockholders.

This urban growth regime, accompanied by the death of democracy in Allentown, created the perfect atmosphere for people like Fed Ed and Miked Fleck to hold their hand out and demand a taste. It created a perfect climate for the NIZ.

It is ludicrous to believe anyone in government came up with the idea. It was born in the mind of JB Reilly (possibly with the aid of Joe Topper, Lee Butz and Mark Jaindl). JB co-opted Pat Browne, Fed Ed and state government to get the NIZ legislation passed. He was thinking long-term. Government was focused on the short-term (the next election, union construction jobs, favorable publicity) to the detriment of the long-term consequences of the NIZ. Aided and abetted by the Morning Call and shills like Alan Jennings, JB maneuvered government into an "us versus them" campaign, characterizing the "suburbs" and the developers there as the rapists of Allentown. The NIZ was simply payback for the raping and plundering done by those evil suburban developers. This was ridiculously easy for JB to do. Even more ridiculous since most of his previous development activity was not in Allentown, but in those evil suburbs.

So, the "co-opting" has been virtually a one-way street. JB, Topper, the Butzes, and Mark Jaindl will reap hundreds of millions of taxpayer dollars - all done quite legally - while Democratic politicians and a few hapless developers will go to jail. Most of Allentown will continue to suffer in poverty. In the meantime, those rapists - not just in the suburbs, but also in Bethlehem and Easton - will suffer substantial losses of business (and those cities and municipalities lose tax revenues as a result).

So what is The Urban Growth Regime's next trick? The CRIZ. But that was, unlike the NIZ, a government-inspired idea and hence doomed to failure.

The federal investigation into Allentown pay-to-play certainly dealing with a symptom. But the disease is the death of democracy, made possible by people who buy politicians and elections without really breaking any laws at all. That's what needs to change. And that, my friends, is a bi-partisan failure.

South Park's Flats at SoDoSoPa

Kenny can't sell them fast enough! Maybe The Morning Call will cover it.

South Park Has a NIZ and CRIZ, Too!

South Park has managed to take every bad economic development idea from Allentown and Bethlehem to create the City part of town.

How Does State Budget Impasse Impact Allentown's NIZ?

What impact does the state budget impasse have on Allentown's NIZ? A reader asked this question yesterday. As near as I can determine, the answer is none. So while a local daycare in Easton and other nonprofits are being denied state funds, the NIZ is doing fine. Since its inception, the state subsidy to NIZ developer City Center Investment Corp. is $54.4 million.

In 2014, the state collected $55.5 million from businesses inside the NIZ. Another $2.3 million in local taxes were collected. This sum was then distributed to ANIZDA (NIZ Board), where Sy Traub. The ANIZDA web page contains no financials except for those interested in buying bonds. But persons knowledgeable about the NIZ inform me that the state and local tax subsidies are distributed once a year, around June. This would have taken place before the state budget impasse.

NIZ Squad Arrests Man Singing Outside Shula's

Sarah Varjassy, a bartender at Bethlehem's Bayou, shot the video you see above, of Allentown police, accompanied by either Mormons or the Men in Black, arresting a man who was singing outside Shula's on Friday. On the bright side, he was not tased.

He's collateral damage in FedEd's war on Allentown's poor and homeless.

The Men in Black are actually security guards for the Strata Condos above Shula's. The fellow who was hauled away apparently walks by there everyday, singing. He is regarded as harmless and is the kind of phenomenon who makes urban life interesting.

But the MIZ (Millionaire Improvement Zone) was never intended to create a vibrant downtown. It is just another artificial Promenade.

It is certainly possible police had a reason to arrest this man, but nothing he was doing in that video is a justification for what happened, or the force used.

Varjassy's video surfaced at Lehigh Valley With Love. Blogger Michael Molovinsky comments, "mr. reilly's business interests must be protected at all costs. perhaps the art's walk should be renamed, taser alley."

Scott, the restaurant manager at Shula's, denied that he made a call to complain. But he added, "It's not right that he does what he does. The police asked him to leave and he resisted," Scott claims, though the video seems to tell a different tale. He added that this man interferes with the "dining experience."

I could imagine patrons looking out Shula's window with their mouths full of dead cows and blurting, "Ugh, poor people!"

"I think the police do a very good job down here," Scott concluded.

August 16, 2015

Updated 10:40 am: - The crooner who appears to have been assaulted by Allentown police is James Ochse. In February 2014, he was arrested by Allentown police after a disturbance inside their 10th Street station in which re reportedly yelled obscenities and then ran off. Officers followed him and pushed him into a snpow bank, where a struggle ensued and he allegedly bit an officer's finger. His attorney filed a motion to preserve the video of that incident, but Ochse ultimately entered a guilty plea to resisting arrest. Other charges were dropped. Judge Kelly Banach imposed a sentence of six months probation.

In 2013, he was charged with trespass after breaking into his ex-wife's house while she was away and sleeping in the house. He spent some time in jail after that incident.

So he has a history, but that's no justification for a police assault.

Updated 5:10 pm.: - A second video shot by restaurant patron Louisa Rans Soos shows pretty much the same thing as Varjassy's video. This one is a bit closer and you can see that the officer is not wearing gloves, as I originally thought, and that his sunglasses are perched. According to Soos, "Beautiful night and a nice serenade until the cops show up at minute 2:15. The guards said he touched the officer but I don't see that on my video and neither did the other 15 or so witnesses. Was it really necessary to throw him to the ground especially since he was walking away?! Some heard his head hit the pavement. 3 cop cars, 1 police van, and a bike cop later, he was taken away. Apparently a grumpy elder called the cops because he didn't like the noise of his singing. Seriously?

A Pennrose By Any Other Name

Before he was being paid by Miked Fleck to shill for Fed Ed, Daryl Nerl was already doing basically the same thing for The Morning Call. In a breathless 2005 account about Pawlowski's obscene campaign finances, Nerl makes it seem like a good thing. Get the very first sentence of his story. "Boosted by an unlikely amalgam of developers he helped bring to Allentown, labor unions and historically heavy-hitting GOP contributors, Democrat Ed Pawlowski has raised 50 percent more money for his mayoral campaign than Republican William L. Heydt." Those developers were already here. For all we know, they brought Pawlowski in from Chicago. He was not here to save Allentown's minority population, but to exterminate them. But in that account, the seeds were already in place. Marcel Groen. Butz. And Penrose. This is about the Pennrose connection. Over the years, Pennrose and its Race Street PAC have been Pawlowski's biggest contributors.

Contributions started in 2005 and have continued from both the Race Street PAC and Pennrose principals Mark Dambly and Richard Barnhart. Pennrose received KOZ benefits for the former Trojan Powder Company and Allentown National Bank Building renovations on Center Square - across from the Arena - in 2004 converting the buildings to subsidized elderly housing. Pennrose also was named developer for the Hope VI HUD funding Hanvover Acres and Riverview Terrace conversion to mixed use housing by the Allentown Housing Authority. That's a $75 million project. The Mayor controls appointments to the Allentown Housing Authority and was a member of the Board himself while DCED director. Alan Jennings, Julio Guridy and Sara Hailstone are members now. Pennrose was also named to redevelop Cumberland Gardens, but that deal was rejected by Lehigh County Commissioners because of the ridiculous $225,000 per unit expense.

Between the two projects, Pennrose was involved with over $90 million in projects for Allentown. They also were named developers by Easton for their Hope VI project. Pennrose is also co-developing Strata Flats with City Center in the NIZ.

Fed Ed's Norris, McLaughlin Connection

Matt Sorrentino

The Norris, McLauglin law firm has a starring role in the summer drama that increasingly appears to be a federal investigation into pay-to-play. Not only are partners identified on the FBI subpoena list, but they have been involved in the Pawlowski story for the past several years.This firm was once known as Tallman, Hudders and Sorrentino, a prominent local firm. The firm recently re-located from South Whitehall to take advantage of the low rents made possible at the disingenuously named Neighborhood Improvement Zone (NIZ).

Managing partner Matt Sorrentno is Lehigh County's Solicitor. He also represents Lehigh Valley Health Network, which just happens to be renting space inside the NIZ and even had two security kiosks installed for the short walk from a parking lot to their fitness center. And for good reason! Patrons might run into Rich Fegeley!

Richard Somach

Richard Somach represents Pawlowski contributor Rob Bennett and Bennett Auto Dealerships. Bennett built a new dealership at the former Exide Battery Plant on Lehigh Street, thanks in large part to $4.5 million in federal brownfield remediation grants.. Though the original construction was done by J. G. Petrucci, the last several additions to the site were done by North Star (J.B. Reilly) and Jim Gentile. Bennett sold their East Allentown - West Bethlehem location to the Banko family. Banko never used it, instead moving to a facility in South Whitehall. Somach is anAssistant County Solicitor, Lehigh County Assessment Board Solicitor and is a collections attorney for Nat Penn Bank, among others,

Fed Ed and his family are rumored to use Rich Somach's Florida Keys second home for vacations.

Scott Allinson

In addition to all of the reported connections of Scott Allinson to Mike Fleck, Allinson also represented Ruckus Brewing in their Neuweiler deal. That was a lot of smoke and mirrors, and may involve Rosen money as speculated by Michael Molovinsky. Contractor Sean Boyle has supposedly been hired by Ruckus to be their Construction Manager. Allinson is a Fleck lawyer, Ruckus lawyer, Reilly friend and lawyer, Fainor friend and lawyer, Lehigh County IDA lawyer and NorCo Gaming Authority Solicitor. A self-proclaimed rainmaker, his profile claims that he helps businesses "achieve their day-to-day, as well as long-term, business objectives."

He calls himself an economic development lawyer.

Ollie Foucek

I'd be remiss if I neglected to mention Oldrich "Ollie" Foucek III, City Planning Commission member and chair, ANIZDA Board member, LV Chamber of Commerce Solicitor and major Fed Ed contributor. He recently was among those to approve plans for a wholesaler along the Allentown NIZ waterfront despite the fact that there were no ... plans. Obviously, this guy is a walking, talking conflict of interest. Being on the Planning Commission and NIZ Board is bad enough, but to be part of a firm that is financially benefiting from both is obscene.

Foucek would likely say Fouck you a year ago. Don't think he'll be saying that now.

Of lesser note are John Lushis, who is involved in the IDA at both Lehigh and Northampton County; and Ted Zeller, who I'll bet has done all the PLCB work for City Center, Arena and NIZ restaurants.

Butz: We Finished Arena On Time, On Budget

Earlier this month, I told you that three mechanics' liens have been filed in connection with the $160 million PPL arena project. Alvin H Butz got dragged into it, I was surprised to learn this company, large as it is, was not required to post a performance bond, something that any municipal attorney should require. That omission, along with the lack of bidding or any transparency throughout the entire Neighborhood Improvement Zone, are major concerns. But Butz did not get to be where it is today by doing slipshod work. I was contacted by someone from that firm, who asked to present their said of the case. I am only too happy to do so.

Here are the facts:

We served as Construction Manager, not General Contractor. Our contract was with ANIZDA, but we worked under the direction of Hammes Corp., a Madison, Wisconsin firm that served as Development Manager.

Because a Construction Manager is hired before the drawings are complete, there is no way to “bid” the project, but we were selected, by Hammes, after the most rigorous process we’ve ever encountered. We competed with five of the largest CM’s in the world, and the process took months. We were eventually selected on the basis of the quality of the individuals on our proposed management team, our demonstration of understanding of the project, the methods we proposed to employ, and the competiveness of our fee. We were the only local firm capable of undertaking a project of that magnitude.

A performance bond was considered, but Hammes recommended waiving it because of our financial strength, our reliability and the cost savings its waiver would generate. A bond would have cost the project about $1.5 million.

The absence of a performance bond has no bearing on the payment of our subcontracts or on any exposure to the taxpayer. Our contract requires that we hold ANIZDA harmless from claims of subcontractors.

Every subcontract was competitively bid and open to all qualified firms.

The liens have been filed by subcontractors of subcontractors. They involve disputes between themselves, and we’ve withheld money to make sure that any offended party gets the money it’s due.

We have no opportunity to pocket money that should have gone to subcontractors. All the checks we’ve received are made jointly to us and each individual subcontractor and supplier. Furthermore, we would never hold back money that’s due. Our reputation has been built partly on our exceptional treatment of our vendors.

The project schedule proved to be exceptionally difficult. The underground piles turned out to be much more extensive and time-consuming than anticipated. We suffered with hundreds of scope changes, many of them requiring extra time. Just as we were about to put the roof on, we were hit with one of the worst winters in history. It snowed almost every other day. Meeting the completion date became increasingly challenging, and many thought meeting it was impossible. We decided to work overtime to meet the schedule, and the cost of doing so resulted in enormous costs that we could never have anticipated.

Despite the incredible challenges, we finished the project on time; and in this day of huge cost overruns on sports arenas, the final cost to ANIZDA was within 3% of the original estimate.

Schlossberg Has 141,498 Reasons To Be Sick

The spin game has begun. NIZ Czar J.B. Reilly and his minions are in full mode damage control at The Morning Call. Reilly dismisses a federal investigation as a "distraction" while his childhood chum, State Senator Pat Browne, harrumphs that it's been unhelpful to the City. NIZ Board Chair Sy Traub disingenuously claims that his board is an independent body, despite the fact that every board member is confirmed by King Edwin's bobble heads on City Council and its own Executive Director just happens to run the City's DCED department. But the most ridiculous of the NIZ defenders is State Rep. Mike Schlossberg, who claims he's been "sick for a week" and that "[n]o matter who is investigated or thrown into jail, ... there are still incentives to businesses to be here."

That's kinda' been the problem all along, Mike.

When $54 million in state tax dollars suddenly gets poured into developers' pockets with no accountability or transparency, it is inevitable that someone is going to get greedy. Schlossberg has been pretty greedy himself. He has 141,498.54 reasons to want federal investigators to go away. $141,498.54 have been poured into his campaign coffers between 2012 and 2014.* Many of his campaign contributors are on the FBI subpoena list.  With these donations, he has poured $33,549 into Fleck's political consulting firms. He also has spent close to $19,000 on what appears to be his favorite charity - himself.

He's raised a lot of money for someone who has never had an opponent.

Schlossberg is a member of the country's second highest paying legislature, after California. He ran unopposed last year, primarily because democracy is dead in Allentown. It's been replaced by crony capitalists who include King Edwin Pawlowski, Pat Browne, Pete Schweyer, Jennifer Mann, nearly all of City Council and any businessman who wants to succeed. Servants of the urban growth regime, their Dark Lord is J.B. Reilly.

Schlossberg is currently being paid $85,338.65/year to represent one of the most impoverished districts in the state. But that's not enough. He also ranks #36 for expenses, according to a 2014 Morning Call report. Theye include $9,782.00 in per diems and $8,027.43 for mileage. That $18,000 above and beyond his $85.338.65 salary.

That $18,000 is about $1,000 more than the per capita income of an Allentown resident.

Schlossberg's Contributors and FBI Subpoena List

Schlossberg's contributors include an alphabet soup of unions, most of whom were likely coaxed into donating by his well-paid political consultant, Michael Fleck. Because nominally he's a Democrat and is willing to say bad things about Republicans, that was probably an easy sell.

Below is a list of some of his other major contributors. Those on the FBI subpoena list are marked in red.

Lil Butz - $250
Lee Butz - $250
Greg Butz - $1250
Jeff Barker - $100
Jim Hickey - $350 
Ramzi Haddad - $1,000 
PPL for Good Gov't - $3,750
Robert Bennett - $5,000 (Exide)
J.B. Reilly - $2,250
Joe Topper - $2,250
Citizens for Urban Renewal (Reilly and Topper) - $2,500
Michele Portnoff - $2,000
Charles Marcon - $3,000
Matt McTish - $3,000 
J.G. Petrucci - $500
Sean Boyle - $2350 
Scott Alinson - $750 
Jenn Mann - $2,500
Thulin (Arcadia) - $500
Air Products $1,000
Mark Jaindl - $1,000
RETTEW PAC - $1,000
Pa. Consulting Engineers - $900

Schlossberg Spent $33,549 on the Guy He Blames For NIZ Mess

Late last week, during a remission in one of his periods of being sick, Schlossberg did his best to insinuate on WFMZ-TV69 there's really only one bad guy in this matter - Mike Fleck.

"Certainly, that would be the implication," he knowingly told a reporter.

Since Schlossberg's finance reports indicate that he poured $33,549 into three of Fleck's political consulting firms, is he a bad gay, too.

Certainly, that would be the implication.

When you sleep with a skunk, the skunk doesn't go away smelling like you.

Why is Schlossberg Paying Lawyers? 

Though he had no opponent and there were no challenges to his nomination petition, Schlossberg's report indicates a $4,907.50 payment to Attorney Tim Brennan on 5/7/12.He obviously was paying for Brennan's legal services for someone else, but does not identify this person or explain this in any other way. The same is true of "in-kind" legal services received from Attorney Scott Alinson, who spends most of his time trying to make deals for developers.

Alinson's legal advice apparently failed to cover identifying the real object of the $4,907.50 payment to Brennan.

Schlossberg draws $1,182 room bill at Waldorf

One thing Schlossberg's report makes very clear is that his favorite charity is himself. He's so incredibly cheap that he even charged a $5.50 lunch at Jack Callahan's to his campaign. But he also made sure that his campaign picked up his $1,182 bill for a 2012 stay at the Waldorff Astoria, where he also paid $400 for one frickin' dinner. He also spent $257.58 to rent a tux.

In 2013 and 2014, he got away from explaining how he is spending that money by simply calling it "reimbursement." He did slip up at times. For example, he bought a $1,000 laptop, which probably actually is a legitimate expense.  But for the most part, he's been very cryptic about the $19,000 he has spent on himself. So it's no surprise that he has no qualms about the lack of transparency on ANIZDA and in Allentown.

Should Investigations Stop Because It Might Jeopardize NIZ?

NIZ cheerleaders have argued that that they do is separate and apart and completely independent of what King Edwin does, despite the fact that their names are littered all over the FBI subpoena list. If that is so, then how can the investigation hurt them?

But if there is criminal activity, I would think that innocent supporters of the NIZ would want a complete investigation and see the bad weeds pulled. The argument that criminal activity should be permitted because business is booming is the same argument that was used to encourage child labor and numerous other terrible ways to make money.

Fortunately, the feds don't give a shit what Sy Traub or Mike Schlossberg thinks.

___________________
* Schlossberg does not have to report his 2015 contributions until the end of the year.