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Bethlehem Township says "no" to NIZ settlement offer

By John Craven, Reporter, JCraven@wfmz.com
Published On: May 21 2012 07:18:14 PM CDT
Updated On: May 22 2012 10:31:40 AM CDT

Bethlehem Township says no to NIZ

ALLENTOWN, Pa. -

Any hopes of a quick resolution to the lawsuit holding up Allentown's $220 million hockey arena were dashed Monday night. Not only did Bethlehem Twp. commissioners unanimously reject the city's latest settlement, but they refused to consider any agreement that doesn't involve state lawmakers getting involved.

The vote makes it increasingly clear the issue will not be settled in the Lehigh Valley, but in Harrisburg. It also means, for the forseeable future, Allentown's giant hole in the ground will remain just that.

"We support the arena," said Bethlehem Twp. commission chair Paul Weiss. "I think we support Allentown being revitalized."

But commissioners insist that suburban tax dollars shouldn't help pay for it.
At issue is the nearly 130-acre Neighborhood Improvement Zone that funds the arena construction. It funnels almost all taxes collected around the arena site back into the project. Bethlehem Twp. and nearly a dozen other municipalities have sued, claiming the NIZ is unconstitutional. A private developer and two additional townships have also filed separate lawsuits.

Allentown Mayor Ed Pawlowski has offered to send tax money back to the suburbs, and even let them share in development fees. But commissioners said, because they believe the law that created the NIZ is unconstitutional, they don't believe any settlement with Allentown will withstand legal scrutiny.

Monday night, commissioners said they won't consider any deal that doesn't send the issue back to Harrisburg to get the arena law rewritten. Specifically, commissioners want any reference to suburban income tax money removed. They also want the zone's size reduced, so it only covers Center City Allentown and not the city's riverfront.

So far, Pawlowski and the NIZ bill's authors have resisted calls to send it back to Harrisburg.

"From Day One, Allentown has not budged on their stance," said commissioner Mike Hudak. "They've reworded their proposals, they've moved paragraphs around, but the fundamental crux of their argument has not changed from Day One."

Letting state lawmakers alter the bill is a risky move for Allentown, but one that appears increasingly likely after Monday night's vote. The earliest that could happen would be next month, when lawmakers return to Harrisburg to pass the state budget.

Following the vote, Pawlowski issued a statement saying, "We are disappointed that Bethlehem Twp. has not accepted our settlement offer, which fully protects 100% of their existing earned income tax (EIT) and also provides for a mechanism to share in future growth."

Pawlowski said the city remains at the bargaining table.

"We continue to be committed to doing whatever possible to resolve this litigation and welcome continued negotiation," he said. "This project is too important for Allentown and the entire Lehigh Valley region to allow protracted litigation in the court system to delay it."

Meantime, union workers, who stand to miss out on 1,700 jobs if the arena stalls, begged commissioners to reconsider.

"This lawsuit is a job killer," said Francis Loghney with the United Brotherhood of Carpenters. "It really is."

Bruce Allen, a carpenter, added: "I've been out of work for three years, and we need to do something to get some jobs going."

Bethelehem Twp. initiated the lawsuit along with Hanover Twp., Northampton Co. Tuesday night, Hanover supervisors will also discuss the city's latest offer.