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05/07/2012

Region's Choice: Reap the Benefits or Bear the Burden?

Mayor_Ed_Pawlowski

By Ed Pawlowski, Mayor of Allentown

"A rising tide lifts all boats." This was spoken by John F. Kennedy in a 1963 speech at the dedication of a dam in Heber Springs, Arkansas.  He explained that the Greers Ferry project, and others like it, were investments not only in Arkansas, but in the nation's future.   After the dam was built and the lake filled, tourism boomed, businesses opened, and Greers Ferry Lake became one of Arkansas' leading destinations creating a broad economic impact in that region for decades to follow.

I tell this story because as was the case in 1963, I feel that we in the Lehigh Valley are at a similar turning point in the development of our region. 

Allentown's Neighborhood Improvement Zone (NIZ), provides a tremendous opportunity for the entire Lehigh Valley.  Some see this legislation in a positive light, others in a negative.  Some Lehigh Valley municipalities are concerned about the effects of this new program. While we are trying to attend to those concerns quickly and fairly, I don't want us to lose sight of the big picture.  The Commonwealth of Pennsylvania has given the Lehigh Valley a chance to reinvigorate our largest urban core.  As a region, we can either reap the benefits of this opportunity to renew Allentown or we can bear the burden of squandering it.

Will everyone reap the benefits?  My answer is yes, because Allentown's success is critical to the entire region. It is estimated that over 55,000 people work in the city every day and more than ONE BILLION dollars of annual earned income is generated by individuals who work in Allentown and live elsewhere. Allentown is an economic driver for our regional economy. If Allentown prospers, the entire region prospers, if it declines, the region will decline and our economy will stagnate.   

Allentown officials have presented a plan ensuring that our surrounding municipalities and school districts will not lose their current Earned Income Tax (EIT) from their residents working within the NIZ area. The City's latest proposal not only addresses concerns about current tax income but also shares the city's success with the surrounding municipalities and school districts. The City will develop a Baseline Payment Fund to assure that every taxing body in the region receives its current EIT payments for the life of the NIZ. 

In addition, to make sure the surrounding municipalities share in the upside of future development projects within the zone, all NIZ developers of commercial office projects will be charged $1 per square foot for occupied office space created in the zone. This fee will be assessed on a yearly basis to create a Regional Development Fund. That fund will share revenue with municipalities and school districts annually (much like the casino-revenue-sharing arrangement in Northampton County) and will be distributed according to the percentage of each municipality's residents working within the NIZ area. The creation of this fund will also help address the concern that there would be an unusual movement of office tenants from neighboring communities. It will apply to all of the municipalities, regardless of their position in or outside of any lawsuit.

Finally, let us remember the main intent of the Neighborhood Improvement Zone is to generate new economic development and increase regional employment opportunities.  It is estimated that the arena project alone will create more than 1750 construction jobs and 240 permanent jobs upon completion. Kevin Lott, a construction worker from Hellertown representing 470 Lehigh Valley carpenters, told the Salisbury Township Board of Commissioners last week: "It's been three years that have been very, very difficult. We really need this work...I have guys losing their homes. It destroys families." The NIZ offers a tremendous opportunity to help reverse this trend.  If we as a region can collaborate and strike a mutually beneficial agreement, we can get down to the business of offering thousands of desperately needed construction jobs to the Valley's unemployed workers.

Beyond job creation, there are other economic benefits to the Valley if this project succeeds: new commerce, increased tourism, and the ability to attract educated workers as well as new companies to the area.  An 8,500 seat multi-purpose arena will improve the quality of life in the region by increasing our options for leisure activities, our pride in the Lehigh Valley and, ultimately all of our property values.

Will the city's offer of collaboration to share in the benefits of the NIZ be accepted or will the redevelopment of Allentown be delayed indefinitely and the benefits of the NIZ wasted?  No one wins if no one is talking. If Allentown declines, many of the downtown jobs held by non-City residents will cease to exist.

If this region is to succeed, we must come together, pursue our common interests, and invoke the necessary changes that will benefit us now and for generations to come.

The Valley's tide has come in, let us not cling to the shore and miss our opportunity to rise to greater heights as a region.