School Board's TIF Reconsideration May Wait

The Bethlehem Area School Board took a step back from supporting tax incentives for the redevelopment of Martin Tower on Monday night.

Director Eugene McKeon, who a week ago was a swing vote that brought a five-vote majority to reconsider accepting tax increment financing for the project, now says he wants a renegotiation of terms before voting to accept the school district’s buy-in.

That means there will not be a vote to accept the terms of the TIF at the board’s regular meeting on Feb. 28. And before it may consider voting on terms in March, there will have to be negotiation among representatives of the taxing bodies, the developers and the Lehigh County Industrial Development Authority.

A week ago, McKeon and Aurea Ortiz both said they wanted to reconsider their October votes to deny tax increment financing to the project, which would have provided for public borrowing to help developers Norton Herrick and Lewis Ronca pay to remove asbestos from and add sprinklers to the 21-story landmark.

Under tax increment financing, a government agency – in this case the Lehigh County Industrial Development Authority – would float a bond to pay for infrastructure improvements to the Lehigh Valley’s tallest building.

The loan would be repaid through real estate tax proceeds that would be diverted from the school district, city and Lehigh County. However, 25 percent of the tax proceeds would still be paid to the school district.

With other board members remaining firm in their original positions, the change by McKeon and Ortiz would flip the 6-3 October denial to a 5-4 approval of the TIF.

On Monday, during board committee meetings, Ortiz said she remains firm in her new belief that the TIF will ultimately be beneficial to the school district. But McKeon said he had some second thoughts about some of the terms, though he declined to go into specifics publicly.

His reticence may have something to do with the real estate tax appeal currently pending on the property. Building owners have petitioned the Lehigh County Assessment Appeals Board, claiming that Martin Tower’s fair market value has dropped from $21 million to $4.6 million in the last several years while it has stood empty and unused.

Opponents of the TIF, including school board President Michelle Cann and former board President Loretta Leeson, advocated deferring any vote until after Bethlehem City Council and Lehigh County Commissioners weigh in. Mayor John Callahan has insisted that the other two taxing bodies are in favor of the project.

Director William Burkhardt, a TIF supporter, said the board is going to look “awfully goofy” if it insists that the other entities vote on the project first and then turns it down anyway.

“I hope (McKeon and Ortiz) are really swing voters and not just playing games because we have far more important issues to be dealing with here,” Burkhardt said.

The developers have said they intend to develop 168 new apartments in the tower, the one-time headquarters of Bethlehem Steel Corp. In the 50 plus acres surrounding the tower, developers say they will build 264 low-rise apartments and between 230 and 285 townhomes.