This week, The New York Times profiled an innovative tax program that aims to boost development in downtown Allentown. The Neighborhood Improvment Zone initiative allows revenues from tenants’ tax bills to be used to pay down debt incurred during construction. From the story:
Aided by tax dollars that would otherwise go to state or local general funds, developers should be able to offer attractive rents to companies that bring in new workers — who in turn might move into or buy new apartments and support new shops and restaurants in what had been a blighted urban landscape.
National Penn Bancshares, one of the development’s anchor tenants, will be paying 20 to 25 percent below the suburban Class A market rent for its new offices spanning 125,000 square feet, said J.B. Reilly, president of City Center Lehigh Valley, the developer. The bank began moving employees in this week.
Plans for downtown also include a new hockey area and hotel. Unlike in other municipalities, the city will actually have a stake in the arena — the Lehigh Valley Phantom's new home is owned by the Allentown Neighborhood Improvement Zone Development Authority.
The overall goal is a more vibrant, healthier downtown. More than 600,000 square feet of office and retail space is already under construction.
“Allentown is very typical of a lot of Northeast Rust Belt cities,” [Reilly] said. “In the last three or four decades there has been an exodus of population from the urban areas to the benefit of the suburban areas. We are trying to reverse that process.”
To rebuild a city center, it is necessary to create a compact, safe, walkable environment that meets the needs of younger workers, not only for good jobs, but also for an urban lifestyle that is replacing the suburban environment sought by the previous generation, Mr. Reilly said.
“People are not clamoring to that suburban lifestyle like they were in the ’70s,” he said. “It’s a different day.”
LEE STABERT is managing editor of Keystone Edge and Flying Kite Media.