ALLENTOWN, Pa. - Developer J.B. Reilly upped the City Center ante Wednesday, announcing two more planned office complexes within the five-block Allentown Neighborhood Improvement Zone.
The Allentown Neighborhood Improvement Zone Development Authority welcomed the news and did its part to cooperate by increasing Reilly's line of credit by $50 million, to $185 million from $135 million.
Reilly told the ANIZDA board of plans to construct office building complexes at Seventh and Walnut Streets and at 940 W. Hamilton Street. These will complement the four office buildings and a hotel planned in the vicinity of the new hockey arena on Seventh Street.
The two new projects, which have not been formally approved by the ANIZDA board, bring the number of planned projects to seven and increase total City Center spending to $425 million.
"This is an expansion of our existing credit facility to continue to develop in downtown Allentown," Reilly said. "There's still high demand and we want to continue building. We've already gone through the first $135 million and the additional $50 million will allow us to pursue additional projects."
The first new building, Five City Center will be located at the at the former Gallery on the Mall site at 940 W. Hamilton St. The building on the site was demolished, Reilly said, and the property is being purchased from PP&L Company.
The second new project, Six City Center, is pegged for the Seventh and Hamilton Street location.
Reilly said he hopes construction on both projects can begin within a year, depending on how quickly tenants are attracted to the proposed properties.
"Each project is unique. They'll cost anywhere from $40 million to $70 million, depending on how big they are. They'll be between 100,000 and 200,000 square feet and that will be tenant-driven," Reilly said. "They'll be on the same scale as 1, 2 and 3 City Center, but it's a question of parking and that will be driven by the size of the building."
ANIZDA, in exchange for approving the credit increase, will receive a $1.6 million payment over three years from J.B. Reilly, regardless of whether projects are built and a one-time $100,000 payment. The $1.6 million can be utilized for debt service on a capital project or directly for a capital public improvement. The $100,000 payment is for the capital fund.
In addition, should the two new projects come to fruition, ANIZDA will reap 10 percent of the NIZ tax revenue generated in the first five years and 20 percent thereafter.
"We want to get money to build things like parking decks," said board chairman Sy Traub. "We're desperate need of more parking decks and improvements to the ones we have."
Parking will be at a premium in downtown Allentown once the hockey arena opens later this fall. The other projects currently under construction in the NIZ zone are a Marriott Renaissance Hotel, an 11-story building housing National Penn Bank, a 166-unit apartment and retail complex attached to the arena and a Lehigh Valley Hospital sports medicine building.
J.B. Reilly will secure the additional $50 million in loans through National Penn Bank. The credit agreement allows the use of Allentown NIZ tax revenues to pay back the loans.
In other business, the board announced that Oldrich Fouchek, III, an Allentown attorney will replaced Diane Scott on the ANIZDA board. Scott's term is expiring and she chose not to return. However, board member Nelson Diaz will stay on for another term.
Allentown, PA 18102