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Americus Hotel owner wants to be in Allentown's NIZ

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Aug 02 2012 09:13:25 PM CDT
Updated On: Aug 03 2012 05:24:28 AM CDT
ANIZDA
ALLENTOWN, Pa. -

The owner of the landmark Americus Hotel wants it to be included in Allentown’s Neighborhood Improvement Zone.

Albert Abdouche says NIZ financing would help him complete renovation of the hotel at Sixth and Hamilton streets about the same time the new minor league hockey arena is finished at Center Square, just one block away.

But he’s had no luck convincing city officials, including Mayor Ed Pawlowski, to expand the NIZ boundaries, which literally surround his 13-story building.

Late Thursday afternoon, Abdouche appealed to the Allentown Neighborhood Improvement Zone Development Authority. He was told ANIZDA does not have the authority to change the boundaries and he will have to go to the state.

Abdouche said the Americus, now empty, will have 100 hotel rooms and 48 suite apartments, plus offices, retail space on the street level, a nightclub and a sports bar.

Allentown resident John Ingram addressed the ANIZDA board on behalf of Abdouche. Ingram is president of Ingram Real Estate Group, a former member of the city’s planning commission and a candidate being considered for appointment as county executive.

Ingram said he has no financial interest in the Americus property and was not being paid to speak to the authority by Abdouche, but is intimately familiar with the property and has appraised it in the past.

Ingram said the Americus only covers a half acre, meaning it would not greatly expand the city’s 130-acre NIZ boundaries. (NIZ is actually several zones in center city and along the Lehigh River’s west bank.)

“He’s just looking for a way to work with whoever he has to work with this to get this done in a positive and cooperative way,” Ingram told the board. “I find it hard to believe that something can’t be done about it.”

Ingram called the Americus one of the most important historical properties in the city. After the meeting, Abdouche said the hotel was built in 1918.

Ingram said Abdouche already has made tremendous progress on the property and is “steadily working on it, using his own cash flow,” but added Abdouche can move much faster to secure financing if the hotel can become part of the NIZ.  “It would be a shame if it could not be included because he could do wonders with the property.”

Abdouche briefly stood and asked ANIZDA for help to get the Americus into the NIZ, also saying its cash flow would make it possible to open the building faster.
“How can I be in NIZ?” he asked. “Who should I talk to? Nobody can give me this answer.”

“We all agree that the Americus is a very important property in the city,” said Sara Hailstone, Allentown’s director of economic and community development.

She said when the NIZ map was being developed, Abdouche had a choice of being in the NIZ or in the KOZ-- Keystone Opportunity Zone -- and Abdouche chose KOZ.

ANIZDA chairman Seymour Traub told Abdouche: “It sounds like you were given the opportunity at the beginning to make a choice. You made a choice. It turns out that choice may be one that is not to your best advantage at this point.”

Abdouche said when he was offered that choice, no one – including the mayor – could explain NIZ to him. “So how can I accept something that I don’t know?” He said he did not learn about the advantages of NIZ until four or five months later.

Hailstone said only the state has the ability to modify Allentown’s NIZ map.

Atty. Marc Feller, ANIZDA’s special counsel, said he already went to the state Department of Community & Economic Development (DCED) to ask for permission to modify the boundary.

“They are sort of the gatekeepers of NIZ projects and financing,” explained Feller. “We were told very clearly by DCED that once debt has been issued by an authority that is going to be NIZ-based financing, the zone can no longer be changed. It was just a flat-out no. At the time, ACIDA (Allentown Commercial and Industrial Authority) had already borrowed $35 million for the initial real estate acquisitions. We were told we could not amend the boundaries of the zone.”

Feller said Abdouche would first have to go to DCED because “they’re interpreting the law and they’re telling us ‘you may not change the zone once debt has been issued’.”

Abdouche insisted he asked city officials to be in the NIZ many times before any money was borrowed but “they turned me down. They said they cannot help me. This was before they got the loan, not after.”

“It sounds like our board does not have the power do anything,”said Traub. “It’s up to the state.” He added if DCED can amend the NIZ boundary, “I’m sure we would be more than happy to have the Americus redeveloped in the zone.”

Scott Unger, executive director of the Allentown Economic Development Corporation, indicated there also was limited time to de-certify KOZ properties so they could be in the NIZ. He said Abdouche asked to be in NIZ after that deadline had passed.

“We’re still committed to trying to help Albert with the Americus,” said Hailstone. “NIZ is a wonderful opportunity, but it’s not the only opportunity for development in the city.” She will give Abdouche information about a contact at DCED.

Joseph Clark, owner of Crocodile Rock Café at 520 W. Hamilton St., presented ANIZDA with a similar problem. He said his rock-and-roll nightclub is in the NIZ, but he wants to purchase an adjacent property not in the NIZ to create a hotel and increase Crocodile Rock’s capacity from 1,500 to 4,000 people.

Traub expects that plan will “run afoul of the same issue that Mr. Abdouche has, that the NIZ cannot be expanded once it’s been established.” He recommended Clark work with Hailstone.