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A Game Changer for Allentown and Entire Region

By LVEDC Staff on July 7, 2014

EDITOR’S NOTE: This feature which was written by LVEDC President and CEO Don Cunningham appeared in the special “Two City Center” supplement that was tucked inside the July 7, 2014 print issue of Lehigh Valley Business.

It’s possible that when future histories are written it will be clear that no single piece of state legislation has done more to revitalize a Pennsylvania city than the Neighborhood Improvement Zone in Allentown.
Two City Center
Passed back in 2009, with the first phase of its results appearing this fall, the innovative NIZ, as it’s commonly called, has done what decades of redevelopment efforts, local and state incentive programs and a lot of hard work could not do.

Allentown is the state’s third largest city with a proud and grand history as a center of commerce, retail and diverse culture. The movement of money, retail and developers to suburban communities beginning in the ‘80s left its downtown core on life support, anchored only by government buildings and PPL.

The NIZ has changed that with the simple premise of leaving state taxes collected in a 130-acre area of the downtown and the Lehigh Riverfront in Allentown to finance an arena and the development of professional offices, residential units and commercial space.

It’s amazing what money will do. It leveled the playing field with the suburbs and made it attractive for Lehigh Valley developers like J.B. Reilly, Lee Butz, and Ryan Dunn and Andy Twiggar among others to take risk and invest in the City. That investment to date has generated $1 billion in new development.

The early returns are impressive as the arena, including a full service Renaissance Hotel, prepares to open this fall and Reilly’s City Center development corporation and Butz, Inc. already have added new downtown office buildings. National Penn Bank, Air Products, Lehigh Valley Hospital and Health Network, along with other prominent professional office users, have been attracted downtown, as have high-end restaurants.

For Allentown, the NIZ is a game changer but it is no less important for the entire Lehigh Valley. Regions are judged by the strength and vitality of their core central cities. A region cannot flourish if its largest city is not a desirable and productive place.

While there was much hand wringing and concern among regional developers, office building owners and suburban municipalities at the outset of the NIZ legislation, it has become clear that our regional market is large enough and strong enough to absorb the NIZ. The proverbial apple cart will not be overturned.

That said, however, there is a strong regional argument to be made that overturning the apple cart a bit to bring life, prosperity and commerce back to our central cities is good for us all. Let’s be frank. The NIZ legislation is really a piece of city revitalization legislation, and as good of one as we are likely to find.

We primarily have State Sen. Pat Browne to thank for that. Both a lawyer and certified public accountant, Browne masterfully created a program that is a market-based incentive to drive development into the urban core without a government outlay or handout. He simply let the taxes generated in the area stay there and be used to finance projects. It was a brilliant approach to kick-staring development and revitalizing part of a downtown.

Governments have incentivized and subsidized development almost since the founding of America, whether it was the construction of canals, railroads, highways, or rapid transit. There are also water and sewer lines and gifts of property. Development has followed the money and American governments at all levels, local state and national, have directed it in one direction or another with its spending and building.

There is nothing to be gained in leaving the great cities of yesterday to rot while we leave them behind and continue to build in the concentric circles beyond the decay. The Lehigh Valley’s economy and social fabric is stronger today because of those who understood this. The rebirth of Allentown has begun and it should be something we all celebrate.

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