In Allentown, revitalizing a city under federal investigation

We checked in to see how Allentown’s revitalization is going and whether the city’s recent political troubles have changed things.

When Allentown’s hockey arena opened in November 2014, business owner Josh Tucker was over the moon.

It was opening night, an Eagles concert, and Tucker stood across the street from the arena, watching thousands of people spill onto the sidewalk from new restaurants and bars.

“It is the biggest happening in 30 years in downtown Allentown,” Tucker said. 

Crowds gather at The Hamilton Kitchen & Bar on opening night of Allentown’s hockey arena in November 2014. (Lindsay Lazarski/WHYY)

Since 2009, Pennsylvania has been bankrolling the revitalization of its third-largest city: Allentown. The state created a tax incentive program to bring businesses and people to the city’s struggling downtown. 

The arena was funded by state tax dollars and it was the centerpiece of the revitalization program called the Neighborhood Improvement Zone. Ideally, the program works like this: in the five blocks around the arena, developers are allowed to use tax dollars for construction. In turn, they are able to offer cheap rent to businesses. The hope is that then, downtown will thrive.

Tucker owned a wicker furniture store across the street from the arena, and he expected it to boost business. “You’ll probably have Mrs. Suburbia and her children coming for a hockey game and they’ll probably see the wicker store and maybe in the future, when she’s in need for that product, she will come in,” Tucker said.

Josh Tucker, owner of JaeTee’s Wicker & Rattan, says the Neighborhood Improvement Zone has helped his business. (Marielle Segarra/WHYY)

A year and a half later, he says that’s actually happened — that his sales have gone up since that night.

Tucker thinks that’s because the city’s downtown has changed. The streets used to be deserted after 5 p.m., he says. 

“Now, there [are] people walking,” Tucker said.” There’s foot traffic at night. You see these concerts. You see the town bustling. It gives you a totally different impression than what used to be here, you know, four or five years ago.”

This just the beginning of Allentown’s big turn-around, Tucker says. That’s a rosy outlook, considering that the city has seen its share of trouble lately.

A federal investigation

Allentown is the midst of a federal investigation over pay-to-play schemes in Pennsylvania cities. Prosecutors say Allentown officials have been trading public contracts for campaign contributions, and over the last year, three people have pleaded guilty.

Court documents say the person at the center of the schemes had control over certain municipal contracts and launched a bid for U.S. Senate in April, 2015. Mayor Ed Pawlowski, who declined to comment, is the only person who matches that description.

You might think the investigation would have business owners in the city nervous about putting down roots or building relationships in a city where officials are mired in scandal.

Josh Tucker, though, is not that worried about it. “People are gonna do what people are gonna do,” Tucker said. “Whatever the outcome of the investigation is, things will continue to move forward in downtown Allentown.”

Tucker owns a business in Allentown, so he’s tied to the city. Maybe it makes sense that he’d try to keep a positive outlook. But what about the businesses that haven’t moved to Allentown yet — are they hesitating?

“In fact, quite to the opposite,” said Shannon Calluori, the acting interim executive director of the Allentown Neighborhood Improvement Zone Development Authority, the board that runs that tax incentive program, and the interim director of the city’s department of community and economic development. 

“There’s a lot of people who are interested in coming into the city and are looking at the available real estate and the opportunities,” Calluori said.

Then again, Calluori was appointed by the mayor, so one could argue that she’s not impartial.

Waning interest…and optimism

Albert Abdouche, a developer in the city, thinks the investigation has scared off would-be tenants.

Abdouche says a woman from New York City was planning to open a clothing store in his building, and she gave him a deposit. Then the investigation dragged on, and she backed out, he says.

Abdouche can’t prove that’s because of the FBI probe. He says it’s just a gut feeling. But he thinks there’s another factor, too: a lawsuit. The owners of a building in Allentown are suing city officials, saying the tax incentive program is discriminatory. If they win, the whole program could topple.

 

Developer Albert Abdouche owns several properties in Center City, Allentown, including the Americus Hotel. (Lindsay Lazarski/WHYY)

And yet, Abdouche is optimistic. Because the city still has tax dollars and cheap rent to offer. “I think Allentown is the place to be right now,” he said. “A lot of people investing a lot of money in downtown, and as soon this investigations and this lawsuits finish, I think downtown will boom.”

Indeed, Allentown’s tax incentives are an attractive deal for businesses, so some of them are going to continue to invest in the city, says Chris Borick, a professor of political science at Muhlenberg College. “They might be more than willing to deal with a little bit of the problems and baggage that comes with the political scandal as long as their bottom line is looking good,” Borick said.

There’s one thing everyone seems to agree on, though: the sooner the investigation is over, the better.