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County commissioners act to help transform old Allentown industrial site via KOZ

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Aug 14 2013 09:05:56 PM CDT
Updated On: Aug 15 2013 12:32:27 PM CDT

KOZ approved for former metal works

ALLENTOWN, Pa. -

A large industrial site along Little Lehigh Creek in Allentown has cleared the final local hurdle to becoming a state-designated Keystone Opportunity Zone --or KOZ.

Lehigh County commissioners voted 7-2 Wednesday night to support the KOZ designation for the former Allentown Metal Works, which covers more than 17 acres at 606 S. 10th St.

While state approval still is needed, the commissioners’ vote improves the odds that in a few years the old factory site will be transformed to provide new good-paying manufacturing jobs for Allentown residents.

The KOZ designation for the property already has been approved by both the city and Allentown School District.

KOZ properties that are redeveloped do not have to pay any local or state taxes for 10 years. That gives developers a major financial incentive to invest in properties that otherwise might remain vacant and deteriorating.

Less than a year ago, the same board of county commissioners rejected a KOZ for the same property by a vote of 6-2.

But then the site was privately owned by a New York company that owed more than $280,000 in back taxes on it. In April, it was purchased for $500,000 by the Allentown Commercial and Industrial Development Authority, which took the property off the tax rolls. That means the county, city and school district now receive no real estate tax revenue from the site.

This time only Commissioners Scott Ott and Michael Schware voted against the KOZ.

City officials hope the KOZ designation will make the site more attractive to buyers willing to establish new industries on the property.

The existing complex of buildings may be torn down and replaced with new structures for future industrial and manufacturing use.

The factory, which has a rail siding, is zoned for heavy industrial use. It most recently was the home of Allentown Metal Works.

In 1905, Traylor Engineering & Manufacturing Co. purchased an abandoned foundry on the site, according to the Lehigh County Historical Society. For decades, Traylor manufactured mining, milling, smelting and cement manufacturing machinery.

The factory underwent large expansions during both world wars. In the 1970s, it was purchased by General American Transportation Corp., then became part of the Fuller Company of Catasauqua.

After more than 100 years of heavy industrial use, some environmental hazards will have to be identified and cleaned up on the property.

Commissioner Percy Dougherty called it one of the best development sites in the county, because “it will not eat up green fields and agricultural land. We should be giving priority to redevelopment of properties in our urban areas.”

Dougherty said when the county commissioners rejected a KOZ for the site last September, several potential developers went away. “This is a property that needs a KOZ to be developed.”

Schware argued that a KOZ should not be approved until someone presents a specific plan for that property. And Ott pointed out that, across the state, not all KOZ sites become success stories.

Action delayed on second KOZ

The commissioners also were scheduled to vote on designating a second KOZ site in Allentown Wednesday: the former Adelaide Mills building, which stands along Linden Street between Race Street and Jordan Creek.

But state officials requested wording changes in the proposed ordinance approving that designation, which required an amendment, which delayed a vote.

Commissioners will vote on that KOZ during their next meeting on Aug. 28.

The massive U-shaped Adelaide structure, once the home of Phoenix Clothes, is directly across Race from the Allentown Bus Terminal. A developer plans to turn it into apartments.

Jordan Creek Trail funding

Also at their Aug. 28 meeting, commissioners will debate whether to give South Whitehall Township $260,000 to help pay for development of its section of the Jordan Creek Greenway Trail.

Approval is not assured, based on comments made by some commissioners at their general services committee meeting Wednesday.

Jordan Creek Greenway is being developed between Allentown and the Trexler Nature Preserve in Lowhill and North Whitehall townships. County officials estimated it will be a nearly 13-mile-long trail.

Someday it may extend all the way to Leaser Lake and the Appalachian Trail, which runs along the top of the Blue Mountain at the north end of the county.

In 2011, the county allocated $1 million to help with the development of that trail, explained Glenn Solt, the county’s general services director.

He said South Whitehall’s section of the trail will cost a total of $675,000, including the $260,000 it is requesting from the county.

Solt said that would leave more than enough money in the county trail fund to create minor parts of the trail that are the county’s responsibility.

Right now that county trail fund totals $845,810. Solt said three allocations already have been made from that $1 million fund, including two to Wildlands Conservancy, with the approval of county commissioners.

Solt said he doesn’t know who else will request some of that money, adding: “It kind of becomes first-come, first-served.”

Schware said it would be helpful to see how much of the trail has been completed and for the county to determine “where our money is best spent.” He said that could be in South Whitehall “or somewhere else.”

Solt said the trail will go under Route 309, but must pass over Cedar Crest Boulevard.
Commissioner Lisa Scheller suggested that part of the project might become a financial bottleneck where the county’s remaining fund money will be needed.

Said Ott: “We don’t want to get a couple of years down the road here and find out we’ve begun to build a pathway and we’re not able to complete it.”

Law firm hired to fight employee lawsuit

Commissioners voted to pay $390 an hour to a Philadelphia law firm.

It is being hired to defend the county in a lawsuit brought on behalf of employees, who claim it has violated the Fair Labor Standards Act in the county juvenile detention home.

County Solicitor Matthew Sorrentino explained the issue involves one shift handing off work to the next shift. He said the suit seeks employee compensation for that 10 or 15 minutes of hand-off work done either before or after a shift.

Because the employees already are working full-time, they are seeking overtime for that extra time worked, explained the solicitor. He said the 40 employees involved are not covered by any collective bargaining agreement.

He said the suit is being brought by one employee, identified only as Sacknoff, on behalf of all 40 of them.

Sorrentino said the suit, which has just been filed against the county, is best handled by a specialist in that field of law.

He said the Duane Morris LLP law firm has the greatest amount of experience with such cases and has been very successful. Sorrentino said $390 an hour is significantly below that firm’s actual hourly rates.

The solicitor said he does not think the legal costs will exceed $100,000.

Considering the amount of money that may be spent, Ott pressed for details and questioned “the legitimacy of defending ourselves.”

Sorrentino told commissioners he would not discuss the merits of the case in a public forum. He said it is a much more common type of litigation in the health care field, such as hospitals with nursing shift changes.

“There is a myriad of defenses,” he said. “I couldn’t tell you as I sit here what they are.”

The solicitor told commissioners he will share more about the case with them in a closed-door executive session after a Sept. 5 conference with Duane Morris.

Sorrentino told commissioners: “In the seven years I’ve been on this job, this is one of the few times we’ve had to come to you to ask for outside counsel. Typically, our office can handle just about everything.”

Controversial apartment rehab

After well over an hour of debate about the cost, commissioners voted 5-4 to spend $750,000 to renovate six apartment units in the Cumberland Gardens housing project in south Allentown -- for use by individuals with mental illnesses “and/or substance abuse disorders.”

County Executive Matthew Croslis did a little math, telling commissioners the $750,000 comes out to $125,000 per unit. “Over 30 years, that’s $347 a month in rent. We’re going to be locking in rent for 30 years. And $347 a month is good rent; that’s half of market.”

Voting no were Schware, Scheller, Vic Mazziotti and Ott.

“We’re talking about completely gutting buildings that are 45 years old, at a cost of $240,000 per unit,” said Schware. “Something’s wrong there. If that isn’t an indictment on a system that is broken, I don’t know what is. I don’t want to be a part of it with my vote tonight.”

Schware said he’s surprised that city residents, who paid less than that for homes, including many more than 100 years old, “don’t come down here with pitchforks and torches and ask us what the hell we’re doing.”

Land sale approved

Commissioners also approved selling a county-owned property in the 500 block of Hamilton Street for $230,000 to City Center Investment Corp.

The county owns less than a quarter of the .63-acre vacant property, where a building housing county offices once stood next to the long-gone Colonial movie theater. The rest of the property is owned by the Allentown Commercial and Industrial Development Corporation.

The center city developer plans to erect a new five-story building, called Three City Center, on the site. The sale price, including the county’s share, is $1 million.