The state has awarded a $2 million loan to assist with the redevelopment of the Allentown Metal Works site.

Efforts to revive the former Allentown Metal Works site was given a boost this week when the state announced it was awarding a $2 million loan to will assist with the redevelopment of the vacant city property.

Pennsylvania Governor Tom Wolf announced the loan will be awarded to the Allentown Commercial and Industrial Development Authority (ACIDA), which will work in partnership with the Allentown Economic Development Corporation (AEDC) to continue to prepare the site for industrial use.

“This is terrific news for the Allentown Metal Works project,” said Scott Unger, executive director of both ACIDA and AEDC. “With this funding from the commonwealth, significant progress can be made towards getting this site to a development-ready state for an interested manufacturer or developer.”

Allentown Metal Works, which has been vacant since January 2011, is comprised of seven buildings totaling over 260,000 square feet on 19 acres of land.

The Lehigh Valley Economic Development Corporation’s (LVEDC) redevelopment program, Lehigh Valley Land Recycling Initiative (LVLRI), has previously been involved with that site, assisting with phase 1 and phase 2 environmental assessments.

The new $2 million funding was awarded through the state’s Business in Our Sites Loan Program, which empowers communities to attract growing and expanding businesses by helping them build an inventory of ready sites, according to AEDC.

The loan funds can be used for all site development activities that are required to make a site shovel ready. The state considers this a “patient” loan, meaning no repayment is required until the property is sold or leased, or for five years from the date of closing.

Eligible sites must be a previously utilized or undeveloped property that is planned and zoned for development. Unger said. Additionally, there must be a substantial likelihood that use of the site, following development, is not for primary residential or recreational purposes.

“The beauty of this loan program is that it falls right in line with the mission of AEDC,” Unger said. “Our goal is to turn factories back into factories so that business can grow or relocate to Allentown, thereby creating living-wage jobs.”

The $2 million loan was part of a package of more than $152 million in business development and infrastructure project investments Wolf announced this month for across Pennsylvania.

The funds will be used to finance the total demolition of four ancillary buildings at the Allentown Metal Works site, which will improve site access, circulation, and marketability for the three larger manufacturing building on the site, according to AEDC.

Additionally, the funds will finance the renovation of either Building A or Building G. These renovations will reflect those of a modern manufacturing facility.

“The Allentown Metal Works site is a fantastic project that will allow the city to be part of the evolution of the manufacturing industry,” said state Rep. Peter Schweyer, who provided a letter of support for the loan application. “I am glad to see that the commonwealth agrees and has awarded the funding for this project to move forward.”

The city also last year received a $400,000 grant from the U.S. Environmental Protection Agency to conduct the second phase of remediation at the site. Planned work from that phase includes asbestos abatement, the filing of open sumps and pits, and the encapsulation of lead-based paint on steel beams, according to AEDC.

Unger said manufacturers seeking to locate their businesses in Allentown usually try to identify sites that can be occupied within one or two quarters. The environmental cleanup and early-stage redevelopment AEDC is planning will bring the site closer to that, making it more attractive for development.