Archive for category NIZ

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

Bruce HainesHotel 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 to…

NorCo Council Poised to Condemn NIZ Hotel Tax Grab

Hotel taxes from Historic Hotel Bethlehemwill 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 st…

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 m…

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…

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 le…

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 It’s been replaced by what some of us call an urban growth regime in which crony capitalists (mostly Republican) call the shots through their pay-to-play puppets in local government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 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 …

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…

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…

Fed Ed’s Norris, McLaughlin Connection

Matt SorrentinoThe Norris, McLauglin law firm appears to have 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 be…

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 …

Too Many Pawlowski Rumors

Throughout the day today, I heard lots of rumors that I have no way to verify unless I get an invisibility cloak. So after a week of nonstop Pawlowski, Fleck and NIZ stories, I’m catching my breath. … Until Monday.

Three Liens Filed Over NIZ Arena

Allentown’s hockey arena, known as the PPL center, has cost taxpayers at least $160 million. But believe it or not, none of the construction work was publicly bid. So it should come as no great surprise that Alvin H Butz, whose top employees have poure…