Archive for category NIZ

How Does State Budget Impasse Impact Allentown’s NIZ?

Posted by Lehigh Valley Ramblings.

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

Posted by Lehigh Valley Ramblings.

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.

A Pennrose By Any Other Name

Posted by Lehigh Valley Ramblings.

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

Posted by Lehigh Valley Ramblings.

Matt Sorrentino

The 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 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 just happens to be Lehigh County’s Solicitor. He also represents Lehigh Valley Health Network, which also 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 and some deals, Allinson also represented Ruckus Brewing in their Neuweiler deal. That deal was a lot of smoke and mirrors, and may involve Rosen money as speculated. 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 this 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

Posted by Lehigh Valley Ramblings.

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

Posted by Lehigh Valley Ramblings.

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.

Too Many Pawlowski Rumors

Posted by Lehigh Valley Ramblings.

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

Posted by Lehigh Valley Ramblings.

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 poured tens of thousands of dollars into Allentown Mayor Edwin Pawlowski and his puppets over the years, was selected as general contractor. No performance bond was required either, notwithstanding state regulations that require them on projects build with state tax dollars. Now the taxpayers are dealing with three mechanics’ liens filed by subcontractors.

AmQuip Crane Rental, I.B. Dickinson and Kenseal Construction have all filed liens over invoices that were sent out as the project was finished. It appears that the Dickinson claim has been resolved, but the others are in litigation.

It is common for general contractors to delay payment as a project is completed. They less they pay out, the more they can pocket. But because no performance bond was required, Butz could theoretically walk away and leave taxpayers holding the bag.

This is just another indication of the complete lack of oversight that has gone on with the NIZ. The City’s webpage does not even bother to identify its secretive board, which never posts its meeting minutes.

Initial board members included Seymour Traub, Gregory N. Dudkin, Alan Jennings, Pedro Torres, Bill Grube, Diane Scott, Nelson Diaz, Jennifer Mann. Snyder resigned, and I am unsure whether Mann’s service on ANIZDA ended with her term as a state representative.


Posted by Lehigh Valley Ramblings.

(The sight of me on NBC-10 must have driven Pawlowski nutz.)

Last Tuesday night, a Bethlehem lawyer hosted a fundraiser for Allentown Mayor Edwin Pawlowski’s U.S. Senate campaign. His ever present campaign manager, Mike Fleck, could be heard complaining about the smallish contributions made by some donors. But at that time, he was already in the grip of the feds. He may have even been wearing a wire. On Thursday, Pawlowski’s world came crashing down. Fleck let his entire staff go, hoping to avoid exchanging H Street Strategies for Cellblock H. His cell phone was disconnected. And King Edwin was visited by agents at City Hall while others were outside his house. A week ago, Pawlowski had aspirations to be a U.S. Senator. Now, with that campaign suspended, the question most people are asking is who will succeed him Will Magisterial District Judge Michael D’Amore be coaxed out of retirement? Will Sam Bennett replace Pawlowski? Despite his “Happy Monday. It’s gonna be an awesome week!”announcement on Facebook, Pawlowski is fighting for his political life. His own hubris and lack of transparency appear to have done him in.

The sudden appearance at the FBI at City Hall and outside his home appears to have caught Pawlowski by surprise. But for weeks, there have been rumblings. I decided not to write about it because I had no idea whether it was state or federal. It might be both.

If Pawlowski is forced to resign, which increasingly seems likely, I fon’t consider him the main culprit in this matter. That distinction belongs to the NIZ.

Allentown’s inappropriately named Neighborhood Improvement Zone (NIZ), which I think should be re-named the Millionaire Improvement Zone, is about 127 noncontiguous acres in Allentown, and Allentown only, in which developers J.B. Reilly and Joe Topper can use state tax dollars to pay off construction loans for development. It’s a TIF on steroids. Despite Reilly’s hollow denials, it is also being used to poach businesses from other parts of the Lehigh Valley.

According to The Morning Call’s Matt Assad, Reilly’s City Center has raked in at least $54 million since 2012. Though it’s our money that’s being handed out, ANIZDA Board Chair Sy Traub refuses to allow the public to see how the money is really being spent. So there is virtually no public accountability for the large sum of corporate welfare that Reilly has spent.

They never even made him take a urine test.

With that kind of unaccountable money floating around, a Mayor who wants to be Governor and then U.S. Senator, is it any wonder that the feds are looking at all the no-bid contracts awarded? It’s inevitable that, with that kind of money, someone is going to skirt the law.

Somewhere along the way, the ideal of open and honest government has disappeared in favor of exclusive parties for the “Miracle that is Allentown.”

Most of the contractors doing no-bid work inside the NIZ just happen to be Pawlowski campaign contributors. Neither he nor Mike Fleck has ever been shy about asking for money. Both have been known to strong-arm contributors.

Somewhere along the line, it appears likely that someone crossed the line. If that is so, it is very possible that a few heads will be rolling. It’s too soon to say whether it is Fleck, Pawlowski, contractors or some combination.

But with Fleck gone and Pawlowski on his way out, there still are two problems.

First, Reilly needs to show us the money! 

There needs to be much more accountability in how these public dollars are being spent than the paternalistic ANIZDA board and J.B.Reilly have been willing to provide. Without public scrutiny, this will just happen again with different players. There’s simply too much money.

No additional tax revenue should be distributed unless the unelected ANIZDA Board insists that the public receives a very transparent accounting of just where the dollars are being spent, and why.

Second, Allentown could use a little more democracy.

For too long, with the notable exception of Jeanette Eichenwald, Allentown’s City Council has been nothing more than Pawlowski’s rubber stamp. It is his money that elected most of them, and they do his bidding. Unfortunately, if Pawlowski resigns, they pick his successor.

Democracy in Allentown has been replaced by an urban growth regime, in which politicians like Pawlowski and businessmen like Reilly make all the real decisions  It’s become a one-party town in which there is very little incentive for Allentown’s working poor to go to the polls. They are more concerned about feeding their families.

Dedicated people like Michael Donovan, Kim Velez, Rich Fegley and Lou Hershman have been vilified and shoved aside in favor of a person like Cynthia Mota, who has been bought and paid for by pawlowski. That dynamic has to change.