A large industrial site along Little Lehigh Creek in Allentown has cleared the final local hurdle to becoming a state-designated Keystone Opportunity Zone --or KOZ.

Lehigh County commissioners voted 7-2 Wednesday night to support the KOZ designation for the former Allentown Metal Works, which covers more than 17 acres at 606 S. 10th St.

While state approval still is needed, the commissioners’ vote improves the odds that in a few years the old factory site will be transformed to provide new good-paying manufacturing jobs for Allentown residents.

The KOZ designation for the property already has been approved by both the city and Allentown School District.

KOZ properties that are redeveloped do not have to pay any local or state taxes for 10 years. That gives developers a major financial incentive to invest in properties that otherwise might remain vacant and deteriorating.

Less than a year ago, the same board of county commissioners rejected a KOZ for the same property by a vote of 6-2.

But then the site was privately owned by a New York company that owed more than $280,000 in back taxes on it. In April, it was purchased for $500,000 by the Allentown Commercial and Industrial Development Authority, which took the property off the tax rolls. That means the county, city and school district now receive no real estate tax revenue from the site.

This time only Commissioners Scott Ott and Michael Schware voted against the KOZ.

City officials hope the KOZ designation will make the site more attractive to buyers willing to establish new industries on the property.

The existing complex of buildings may be torn down and replaced with new structures for future industrial and manufacturing use.

The factory, which has a rail siding, is zoned for heavy industrial use. It most recently was the home of Allentown Metal Works.

In 1905, Traylor Engineering & Manufacturing Co. purchased an abandoned foundry on the site, according to the Lehigh County Historical Society. For decades, Traylor manufactured mining, milling, smelting and cement manufacturing machinery.

The factory underwent large expansions during both world wars. In the 1970s, it was purchased by General American Transportation Corp., then became part of the Fuller Company of Catasauqua.

After more than 100 years of heavy industrial use, some environmental hazards will have to be identified and cleaned up on the property.

Commissioner Percy Dougherty called it one of the best development sites in the county, because “it will not eat up green fields and agricultural land. We should be giving priority to redevelopment of properties in our urban areas.”

Dougherty said when the county commissioners rejected a KOZ for the site last September, several potential developers went away. “This is a property that needs a KOZ to be developed.”

Schware argued that a KOZ should not be approved until someone presents a specific plan for that property. And Ott pointed out that, across the state, not all KOZ sites become success stories.

Action delayed on second KOZ

The commissioners also were scheduled to vote on designating a second KOZ site in Allentown Wednesday: the former Adelaide Mills building, which stands along Linden Street between Race Street and Jordan Creek.

But state officials requested wording changes in the proposed ordinance approving that designation, which required an amendment, which delayed a vote.

Commissioners will vote on that KOZ during their next meeting on Aug. 28.

The massive U-shaped Adelaide structure, once the home of Phoenix Clothes, is directly across Race from the Allentown Bus Terminal. A developer plans to turn it into apartments.

Jordan Creek Trail funding

Also at their Aug. 28 meeting, commissioners will debate whether to give South Whitehall Township $260,000 to help pay for development of its section of the Jordan Creek Greenway Trail.

Approval is not assured, based on comments made by some commissioners at their general services committee meeting Wednesday.