A rendering of the $20 million development project at Third and New streets in Bethlehem.

Two of the Lehigh Valley’s biggest companies are coming together at a $20 million development project that officials believe will serve as a catalyst for additional development in South Bethlehem and ultimately benefit the entire region.

St. Luke’s University Health Network and Lehigh University will be the anchor tenants at Greenway Park’s new building at 3rd and New streets, which will serve as a gateway into the city from Route 378, provide additional foot traffic for South Bethlehem businesses, and bring hundreds of workers into the city.

“I believe this project, along with others, are the beginning of a true renaissance in South Bethlehem,” Bethlehem Mayor Robert Donchez said to a crowd of more than 100 on Wednesday. “The partnership between the city of Bethlehem, Lehigh University, and St. Luke’s could not be stronger. This is a major commitment by both institutions to the future vitality of the South Side.”

The first of many new development projects planned for South Side Bethlehem, the six-story building will host a mixed-used floor of clinical, teaching, and administrative space for St. Luke’s, as well as 140 employees from Lehigh University’s Office of Advancement.

A rendering of the planned building and an adjacent 626-space parking garage.

The groundbreaking for the 125,000 square-foot building is expected to begin in the spring of 2016, with construction scheduled to be completed by the spring of the following year. Additionally, a new 626-space parking garage will be built adjacent to the site, Donchez said.

The project falls within Bethlehem’s City Revitalization and Improvement Zone (CRIZ), an economic development tool that allows state and local non-property taxes to be diverted to help finance development within the non-contiguous 130-acre zone.

Wednesday’s news conference marked a long-awaited announcement by Greenway Park, a subsidiary of ION Development Group owned and managed by attorneys Dennis, Garrett, and Brandon Benner. ION Development focuses on the redevelopment of urban cores into sustainable neighborhoods.

“This building represents the culmination of hard work by many people and is representative of a true public-private partnership,” Dennis Benner said. “We are particularly pleased that we have the good fortune to develop in concert with our alma mater, for our alma mater. We are equally please that this development continues a business relationship with our good friends at St. Luke’s.”

Richard Anderson, President and CEO of St. Luke’s University Health Network, called the project an example of two organizations partnering to do “something extraordinary” for the region as a whole.

“This building project strengthens St. Luke’s University Health Network’s long-standing commitment to our neighbors and the Bethlehem South Side, and it also continues a long tradition of St. Luke’s and Lehigh University working together as part of our ongoing relationship,” Anderson said.

John Simon, president of Lehigh University, added: “We are happy to join St. Luke’s as an anchor tenant in this building, and our presence will enable Lehigh to further demonstrate a strong commitment to serving as a positive community partner.”

The first floor of the Third and New streets building will be retail, while floors 2 to 6 will be office. The building is located only a few minutes from Interstate 78, Route 378, and Route 22.