The new group in charge of Allentown's $158 million downtown hockey arena project, and much of the development expected to spring up around it, met for the first time Tuesday evening.

Looming over the group is a lawsuit that threatens to delay, or even stop, the massive project.

The Allentown Neighborhood Improvement Zone Development Authority, or ANIZDA, consists of nine volunteer members.

City Council created the authority in February after some critics complained of a lack of transparency on major arena decisions.

"This is a huge undertaking," said Pa. Rep. Jennifer Mann, D-Lehigh Co., a member of the new group. "You've got about a half a billion dollars right now on the drawing boards."

The new authority will make all the spending and borrowing decisions for the arena project, as well as the 130-acre zone around it. That zone has already seen commitments for three office towers, a hotel, and a new Lehigh Valley Health Network sports medicine center.

"Allentown once was, not only the retail center, but it once was the commercial center for the Lehigh Valley," said ANIZDA's new chairman, Sy Traub.

Hanging over the new board is a lawsuit threatening to delay the project and an upcoming bond sale.

Two suburban localities claim it's unconstitutional to divert some of their residents' income tax money to the development.

The taxes are basically collateral to get bond money to build the arena; backers have said all the tax dollars would likely be returned within a year.

Some ANIZDA members don't even think they need the suburbs' money at this point.

"The opinion of most people involved with the project is that we can do this without that suburban subsidy," said ANIZDA member Alan Jennings, who is also executive director of Community Action Committee of the Lehigh Valley.

Mayor Ed Pawlowski, D-Allentown, said Monday the city is working on a deal he hopes will end the lawsuit and let suburbs keep all their money. Details may be announced as early as next week.

If the lawsuit isn't settled quickly, board members worry they'll have little to do.

"Timing here is critical," said Mann. "Anybody that's dealt with public projects, public bond issues, understands that the cost of the bond issue, the interest rates -- all of those things are very sensitive."

Jennings added: "We've got to move the project forward. We're at risk of the arena not being ready for the 2013 hockey season, and we've got a hole in the ground."
Time is critical here. There's only a few million dollars left in the bank for construction right now, so ANIZDA members said the city must obtain bond money soon to avoid delays.

Until now, the Allentown Commercial Industrial Development Authority (ACIDA) controlled the arena project.

Pawlowski initially received criticism for assigning the project to ACIDA, then a little-known authority that had never handled a project anywhere close to this magnitude.

ACIDA's initial round of decisions, some involving multi-million dollar loans, received little public input, in spite of being held in open meetings.

Mann hopes the new authority will attract more public involvement.

"We are using public tax dollars, and I think it's paramount that the public have an understanding and a trust and confidence in the decisions that are made," she said.