SOUTH WHITEHALL TWP., Pa. -

Another township decided to face off against the city of Allentown Wednesday night, joining a lawsuit over the funding of the city's hockey arena.

It's the first municipality in Lehigh County to sue the state over the funding scheme.

It looks like this could mean war between the city and the suburbs. But the project is getting words of support, too, and even the challengers are expressing hope for a truce.

Residents responded with clapping Wednesday night after South Whitehall Township voted to join litigation filed by Hanover, Upper Nazareth and Bethlehem townships.

The lawsuit is against the Neighborhood Improvement Zone, or NIZ, that funnels the earned income tax from workers back into the zone.

Nearly 30 people showed up at Wednesday night's South Whitehall Township Board of Commissioners meeting. Most folks turned out for one agenda item.

South Whitehall Township joins a handful of other localities that claim Allentown has no right to keep suburban residents' income tax money to help pay for the downtown arena.

Leaders say they're concerned about local economic stability.

"We don't know how much earned income tax we're gonna be losing if any down to the NIZ, so with that lack of information, we have no choice at this point other than to move forward and intervene in the suit," explained South Whitehall Township Manager Jon Hammer.

Local developers are also concerned about the zone luring businesses away from the township.

"They're gonna have government-subsidized rents down there that could be considerably cheaper then what our market rates are out here," said Hammer.

Hours before this vote happened, the Lehigh Valley Economic Development Corporation spoke out in favor of the NIZ, saying in part:
"It is a project that will transform Allentown and in the long term enable the entire Lehigh Valley region to rise to new levels of economic success."

"I think if we structure this deal correctly, if we work with the city everyone can come out winners."

The city is concerned this lawsuit could kill the arena project, leaving a giant hole in the ground downtown.

"We just hope that doesn't happen," said Hammer. "And we're gonna start negotiations as soon as possible and hopefully we can get this resolved."

The mayor issued a statement saying the project is a once in a lifetime opportunity and he appreciates the LVEDC's support.