Lehigh Valley

Pawlowski administration predicts $750,000 in property taxes from NIZ projects in 2014

ALLENTOWN, Pa. - Budget officials in Mayor Ed Pawlowski's administration are predicting that Allentown will receive $750,000 in real estate taxes in 2014 from projects in the downtown where a new hockey arena is being built.

Allentown's deputy director of finance, Debra Bowman, told members of a special city council meeting Tuesday that the $750,000 estimate coming from development in the Neighborhood Improvement Zone is "very conservative."

She said the figure was based on the administration's belief that some of the projects, including the arena, would be "on-line for one-quarter of 2014."

Tuesday night's meeting was the first of five city council meetings on the $89.4-million budget unveiled by Pawlowski last Thursday. Final adoption of the budget, which requires no property tax increase, is scheduled for Dec. 4.

After the meeting, council member Pete Schweyer told WFMZ.com that the $750,000 estimate is a signal that the administration expects to exceed its own predictions of real estate revenue from NIZ developments in the coming years.

Schweyer pointed out that the mayor has often predicted that the NIZ projects would bring in around $2 million a year in real estate taxes. But if the $750,000 figure is on target, that would mean around $3 million annually in real estate taxes in the coming years.

During the meeting, city resident Glenn Hunsicker wanted to know what the assessed valuation of the buildings in the NIZ might be.

Schweyer said council is awaiting a report from consulting firm Public Financial Management Inc., of Philadelphia, which Bowman said would likely be ready within a week.

In response to another question from Hunsicker, council member Jeff Glazier said the NIZ buildings will go on the tax rolls as soon as they are given certificates of occupancy.

"I know the school district used to get $102,000 in property taxes from the whole block," said Glazier, who served on the school board for 12 years. "The hotel [being built next to the arena] alone should eclipse that [amount] significantly."

In other business, a bill allocating $10 million of the $12 million remaining from the lease of the city's water and sewer systems was recommended by a 4-1 vote.

Schweyer voted no, and said he would remain opposed to the bill, "until I know what's going on with the extra $2 million. ... I want to know [from the administration] about the final piece."

The city was paid $211.3 million when it entered into a 50-year lease agreement with the Lehigh County Authority earlier this year.

Almost $30 million paid for closing costs, while $170 million was earmarked for pension fund debt and liabilities.

Of the $10 million allocated in the bill recommended Tuesday night, $5 million will go to the city's Risk Fund, which handles insurance claims against the city, because the city is self-insured, while another $3.5 million will be placed in the Capital Fund.

A supplemental appropriation of $1.25 million will go toward construction contracts to pay for repairs to Allentown's leaky sewage system ordered by the Environmental Protection Agency.

Schweyer said after the meeting that council has "no idea" what the price tag might be. "We've heard the ultimate cost could be as little as $5 million or as much as $35 million." The $1.25 million "lets us pay it forward a little bit," he added.

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