Construction continues at the the site of the former Boyd Theatre. In the background, the National Kitchen & Bath Association has relocated to One Bethlehem Plaza. (Photo/Glenn Koehler)

Editor’s Note: This is the third story in a four-part series exploring economic development in Lehigh Valley’s downtowns. Previous stories featured downtowns in Easton and the region’s boroughs.

Just outside Bethlehem’s historic district, the one poised to become a UNESCO World Heritage site, construction fencing shields the expansive redevelopment site where the Boyd Theatre once stood.

Across the Lehigh River on the South Side, contractors work behind a boarded-up shopwindow to rehabilitate the once beloved Goodman furniture store in the business district skirting the SteelStacks arts and entertainment campus.

Developers broke ground last fall on projects that will transform those key downtown properties into mixed-use buildings that include residences that are in high demand in the growing Lehigh Valley.

The $50 million, six-story project at the Boyd site, 26-44 W. Broad St., will house 195 apartments, commercial space, and amenities including a private, outdoor theater for residents. The $9 million redevelopment of the Goodman store and adjacent lot, 30-32 E. Third St., will feature first-floor retail, commercial space, and a dozen apartments.

Construction at the former Boyd Theatre site. (Photo/Glenn Koehler)

The pair of projects – part of $700 million of development now planned or under construction in Bethlehem – underscores how desirable real estate has become in this city where just two decades ago its largest landowner, Bethlehem Steel Corp., declared bankruptcy and dissolved.

“Bethlehem has long recast its industrial heritage into a vibrant destination flourishing in both community and economic development with wonderful neighborhoods, downtowns and a range of high-quality employers,” said Cunningham, who was mayor when Steel declared bankruptcy and is now President and CEO of the Lehigh Valley Economic Development Corp. (LVEDC). “The redevelopment of the Goodman and Boyd properties is the latest chapter in the ongoing renaissance taking place in Bethlehem and across the Lehigh Valley.”

High-profile Bethlehem projects – like the redevelopment of the Martin Tower site that once housed Bethlehem Steel’s corporate headquarters and hotel expansion at the Wind Creek Casino Resort – often dominate the headlines. But approximately $300 million of the projects in the city’s pipeline are located in Bethlehem’s two distinct downtowns, including over 900 of the 1,300 residential units planned. Other downtown developments in the works include a new parking garage, improvements to the Greenway rails-to-trails park and a new community arts center where the Banana Factory arts center now stands.

“There is no denying that Bethlehem’s downtowns are vibrant and attractive to residents, visitors, and investors alike,” Mayor J. William Reynolds said. “People want to live here, work here, and enjoy the rich and diverse culture, history, and modern urbanism we offer. Bethlehem excels at providing a quality of place that invites people in and provides spaces for inclusive growth and prosperity, and the volume of high-quality development in our North and South Side downtowns is a direct reflection of that.”

The eastern Pennsylvania city of 75,000 is among America’s most desirable locations. Livability.com ranked Bethlehem among the top 100 places to live in America, and Realtor.com, which tracks housing demand, ranked Bethlehem’s 18018 ZIP code among the nation’s hottest in 2021 and its 18017 ZIP code in 2022. The Hallmark Channel livestreamed historic Main Street in December to spotlight Bethlehem’s holiday charm.

Bethlehem, known as the Christmas City, comes by its reputation honestly. Named after the biblical town on Christmas Eve 1741 by its Moravian founders, Bethlehem has become a must-see for tourists. Buildings from original settlement survive, comprising the core of a National Historic District that’s now on the U.S. Tentative List to become a World Heritage site alongside icons like the Statue of Liberty and Pyramids of Giza.

Bethlehem has transformed its former steel land into an entertainment district anchored, in part, by the ArtsQuest Center at SteelStacks. (Photo/Glenn Koehler)

Bethlehem is also known for its industrial past: Bethlehem Steel transformed its hometown as it rose to become the world’s No. 2 steelmaker in the 20th century. The former steel land has since been redeveloped into industrial parks, technology incubators and an entertainment district anchored by the ArtsQuest Center at SteelStacks and the Wind Creek Casino, among Pennsylvania’s most profitable casinos. The district includes shopping, concert venues, public plazas, a museum and an elevated trail inspired by New York City’s High Line.

Those two histories have shaped two thriving downtowns with distinct personalities: one built on the historic charm of Main Street where the Historic Hotel Bethlehem and the Moravian Bookshop, founded in 1745, still thrive and the other distinguished by art and grit near the former Steel plant.

Both benefit from locations near universities — Moravian on the North Side and Lehigh on the South. The universities have undertaken significant projects in recent years as they draw young talent into the city’s urban core.

Festivals, including Musikfest, Christkindlmarkt and Celtic Classic, have introduced more visitors to the two downtowns flush with restaurants, pubs, shops and other diversions. From poutine and whiskey to skateboards and art galleries, Bethlehem’s downtowns have a bit of everything.

At a busy corner of E. Third Street, an early 20th century storefront with brick walls and a tin ceiling offers the unique backdrop that draws loyal clientele to Lara Bly Designs, a fashion studio and boutique.

“This is high-end women’s clothing – a strip mall would not be right for me. This a destination for my customers. We don’t get as much foot traffic, but I would presume that’s going to change a lot,” owner Lara Bly said. “Within a block each way, there are four apartment buildings going up.”

Peron Development’s mixed-use project will feature the Bethlehem Food Co-Op grocery store. (Photo/Glenn Koehler)

Among those developing mixed-use apartment projects is Peron, which has completed more than 200 in Bethlehem. Peron has three more mixed-use projects planned or under construction on the South Side and one on the north side will feature the Bethlehem Food Co-op grocery store.

John Callahan, Peron’s director of development, said there is a shortage on housing, particularly rentals for households with a median income of $100,000 plus. Those tenants have the financial wherewithal to own a home but made the lifestyle choice to rent downtown, he said.

“A big driver of the demand for this type of housing is job creation. They go hand-in-hand. lt’s hard to bring jobs here if there’s no higher end talent, and we can’t build projects if no one wants to live in them,” said Callahan, who had been Bethlehem’s mayor from 2004 to 2013. “So much of the talent — people who companies want – are living in the environment we’re creating.”

Dubbed ‘Gateway at the Greenway’, this six-story building is attracting new tenants like Zeptepi Creative, a marketing agency, and Venture X, a co-working space. (Photo/Glenn Koehler)

From technology and food incubators to professional firms, Bethlehem’ s real estate market includes distinctive, quality spaces in vibrant locations. The LVEDC recently moved into the former Bethlehem Club, a stately building that was once a social club for Bethlehem Steel executives. The National Kitchen & Bath Association moved its headquarters from New Jersey into an 11-story office building around the corner from Historic Main Street.

Bethlehem’s energy attracted Ryan Walsh, founder of Zeptepi Creative, to a marquee intersection on the South Side. His company, which provides photo, video, graphics for marketing campaigns, moved into Venture X, high-end co-working space in a six-story building. Dubbed Gateway at the Greenway, the modern structure also has rooftop restaurant ZEST and attached parking garage that abuts the Greenway.

“It’s a place where you can develop bigger ideas and find people from different perspectives and walks of life and bounce ideas off them,” Walsh said. “When you’re in a space like that, it helps you develop a certain mindset and allows you to think bigger. It brings that energy to you, and it’s invigorating.”