School Board Will Reconsider Martin Tower TIF

UPDATED: 1 A.M.

The Bethlehem Area School Board will reconsider its October decision to reject tax incentives to help redevelop Martin Tower and the 53 acres around it.

Finance Committee Chairman Eugene McKeon and director Aurea Ortiz told the rest of the board on Monday night that they had reconsidered their earlier votes against the proposal and would like to revote on the issue.

McKeon and Ortiz were part of the 6-3 majority when the board rejected tax increment financing for the 21-story, 330 foot tall landmark, which served as Bethlehem Steel headquarters during its final years.

Ortiz said that after revisiting the issue, she believes she may have made a mistake the first time she voted. McKeon said he has become concerned that a pending real estate assessment appeal by building owners Lewis Ronca and Norton Herrick could mean the district will have to refund money that has already been paid, as well as lose revenue for years to come.

But their change of heart was met with testy accusations from other board members that they had succumbed to the secret influence of Mayor John Callahan, who has been an outspoken proponent of tax increment financing in the Martin Tower redevelopment.

“We have been told that certain board members have been given talking points by the city administration,” said director Benamin M. Tenaglia III.

“I made my own decision,” Ortiz insisted. “That’s not Mayor Callahan’s decision.”

Ortiz and McKeon both acknowledged that the mayor called them. So did Board President Michelle Cann, though she was unmoved by Callahan’s pitch.

“This was a settled issue until Mayor Callahan started making calls,” Cann said. “I do not appreciate the mayor becoming an 11^th member of this board.”

Outside of the meeting room, Callahan acknowledged that he had lobbied board members.

“I have made no secret of the fact that I have reached out,” Callahan said. “I am a product of Bethlehem Area Schools, K-12; I have three children in the district; I am a taxpayer and I’m the mayor. Why would they not want to talk to me?”

Callahan also explained the assessment appeal that has McKeon so concerned. Owners have brought to Lehigh County an appraisal of the building that drops its fair market value from $21 million to $4.6 million.  If the tower owners win the appeal, the district would lose more than $200,000 a year in tax revenue, Callahan said. The district would have to refund the owners that much money for the current year.

Tenaglia said that the mayor had not called every board member. “I would ask the board members who have received e-mails from the mayor to share those with the rest of the board,” he said.

Tenaglia, Cann and director Irene Follweiler said they saw no new information that compelled the board to reconsider its earlier decision.

Cann also argued that reconsidering this vote sets a bad precedent.

“People rely on this board’s votes to know how to proceed,” she said. “This is absolutely inappropriate.”

Nonetheless, McKeon’s and Ortiz’s change of heart will lead to a revote, either this month or next. Directors Rosario Amato, William Burkhardt and Michael Faccinetto all said they continue to support the tax incremental financing deal. Director Loretta Leeson was not at Monday’s meeting. She voted against the proposal in October.

Under tax increment financing, the Lehigh County Industrial Development Authority would float a bond to pay for infrastructure improvements to the Martin Tower property, which would be repaid using a portion of the proceeds of real estate taxes until the bonds are repaid.

All three taxing entities – the district, the city and Lehigh County – would have to agree to the transaction. A similar inancing arrangement is helping to pay for the ArtsQuest SteelStacks project in the area around the former Bethlehem Steel blast furnace.

Among the items a bond would pay for is asbestos removal and the addition of a sprinkler system for the Lehigh Valley’s tallest building, where the owners intend to develop 168 new apartments.

The tax financing would apply specifically to the tower, but not to a surrounding development that would include 264 low-rise apartments and between 230 and 285 townhomes. That means that the taxing entities could begin to reap the benefits of the new development as soon as the newly built homes are ready for occupancy.