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New TIF plan proposed for Bethlehem's Martin Tower

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Apr 17 2013 06:19:42 AM CDT
Updated On: Apr 17 2013 10:34:38 AM CDT
Martin Tower

Martin Tower

BETHLEHEM, Pa. -

Don’t erase the landmark Martin Tower building from Bethlehem’s skyline just yet.

“The demise of the tower is slightly exaggerated at this point,” Duane Wagner, who represents one of the building’s owners, told the Lehigh County Industrial Development Authority Tuesday afternoon. “We don’t have any plans at this time to demolish the tower.”

Wagner went to the authority meeting in Bethlehem to ask it to initiate a new
tax increment financing –TIF – plan for the Martin Tower property. The authority attempted to get TIF financing for Martin Tower a few years back but the Bethlehem Area School Board rejected the proposal.

The 21-story former Bethlehem Steel office building stands on 53 acres at 1170 Eighth Ave. Completed in 1972, it is the tallest building in the Lehigh Valley. It also has been vacant for several years. Wagner presented the authority with a plan to improve the tower and add apartments and townhouses on the property.

He said the owners worked diligently to get the property listed on the National Register of Historic Places “in order to preserve it and take advantage of the tax credit incentives that are available to developers for adaptive and historic reuse. So we don’t have any intention of demolishing it.”

The four authority board members at the meeting when Wagner completed his brief presentation informally agreed to revive a TIF initiative for Martin Tower.

“I do support us going through the process again,” said authority chairwoman Cindy Feinberg.

“I say we should take another look,” agreed board member Joanne Kuchera.

Tax increment financing allows a portion of property taxes that would go to a municipality, school district and county to instead be diverted to help pay a project’s development costs for up to 20 years. The advantage for local taxing bodies is redevelopment of a property generates much more tax revenue than they receive if it is not redeveloped.

“The TIF is really the linchpin for the redevelopment of this property to commence,” said Wagner. He asked the authority to reiterate its support for the project and to talk to the taxing bodies. “We’d like to get in front of them as soon as possible and request your support to do that.”

Martin Tower is on the eastern edge of Lehigh County. But Feinberg, who is Lehigh County’s director of community and economic development, said the property is one of the most important redevelopment areas in the county. “It’s been on our redevelopment plan for years.” She said it’s a good time to revive the TIF because both commercial and residential development “are picking up everywhere.”

After the meeting, Feinberg said Wagner works with Lewis Ronca, one of the owners of Martin Tower property. She identified the other owner as Norton Herrick.

A few years ago, the authority designated TIF committee members for the Martin Tower project but never made presentations to Bethlehem City Council or to Lehigh County.

“It never got that far,” said Atty. John Lushis, the authority’s solicitor. “We never presented the TIF plan to anyone but the school board. And the school board – we really got bogged down in a lot of politics.”

“The school district decided they didn’t want to do it, so it didn’t go anywhere,” confirmed Feinberg.

“If your decision is to work on this one, we start from scratch again,” Feinberg told her board. That would involve going back to the taxing bodies to participate, then putting together a new TIF committee to help develop a new TIF plan.

Lushis said he will put his legal hat on to look at the previous TIF plan that was developed for the Martin Tower property. “Do we have to go back to square one or can we work from that TIF plan, make an adjustment and just present it?” he pondered.

Lushis said the solicitor of the Bethlehem Area School Board repeatedly has advised him that board may be more receptive now because it has a major problem with Nitschmann Middle School, “which needs to be torn down and rebuilt, to the tune of $40 million to $45 million. The school district doesn’t know where it’s going to get the money to do that, other than by increasing taxes.”

If the value of a property such as Martin Tower increases through redevelopment, local taxing bodies can collect far more tax revenue, even if a designated percentage of that increased revenue goes to help the developer fund the project for up to 20 years.

Wagner said TIF proceeds will be used to make infrastructure improvements, including site excavation, water and sewer lines, paving, sidewalks and street lights.

He said a new TIF would include only the redevelopment of Martin Tower and the apartments, which were included in the previously proposed TIF, but not the townhouses.

Wagner showed the board a new concept plan for the property that has three major components: redevelopment of the tower at the west end of the property; adding three-story, garden-style apartments on the northern side of the property -- 240 units in 10 buildings – and adding up to 183 townhouses on the southern side.

He said the prior plan had the apartments on the southern side of the property and townhouses on the northern side.

The current plan labels the townhouse section as “interchangeable development” between residential and commercial. Wagner explained that’s because of “a continuing increased demand” for commercial development in the 8th Avenue corridor.

“We can easily decrease the number of townhomes” so commercial uses – such as an office building -- can “grow” into that section of the property, he explained. He added more commercial uses will enhance the speed at which the property gets redeveloped, rather than waiting years for townhouses to be sold.

Wagner said the city requires Martin Tower itself must remain standing on the property for mixed-use development to occur there. He did not mention who would occupy that building or describe how it would be modified.

Kuchera said the authority had been told it would be cost prohibitive to knock down the building “because of the asbestos situation” and asked Wagner: “Is that still the case?”

He replied the only thing that would make them considering knocking it down will be if it remains vacant for “three, four, five, six more years. It may hit a point there is nothing else you can do because of structural degradation. Right now the building is functional. It is able to be re-used. The asbestos is still there. There is still significant demolition that has to occur within the structure itself.”

He said the site contains obsolete mechanical equipment, including a building with 24-inch asbestos pipes used cool the tower. “All new infrastructure has to go in.”