During nearly 30 years in the Pennsylvania legislature, former state senator Pat Brown (R-Lehi) built a reputation for introducing bills that brought prosperity back to his district in the heart of the Lehigh Valley.
Chairman of the influential Senate Appropriations Committee, Brown spurred more than a billion dollars in investment in downtown Allentown from tax credits to encourage redevelopment of Bethlehem Steel’s vast brownfields. Leading initiatives to create jobs and economic development all the way to special tax districts.
But after losing a seat at this year’s major challenge, Brown’s final big deal as a lame duck is beyond the Lehigh Valley and whether it was as transparent as it should have been.
brown, september submitted a bill to sell the ground Directly sold the 100-year-old Allentown State Hospital on approximately 200 acres on the border of Allentown and Bethlehem to City Center Investment Corporation, a prominent real estate developer, for $5.5 million.
Brown has political and personal ties to City Center president and co-founder JB Reilly, who in May bid to buy the land for another company.
The law was passed in October as part of a package to sell or transfer some of the state property. Signature of Governor Tom Wolfe last month. Mr. Browne did not respond to messages seeking comment.
Community leaders, including Allentown Mayor Matt Tuerk, said the sale and redevelopment of hospital assets is a long-standing goal to benefit the city through new housing, jobs and tax revenue.
They said the Allentown minor league hockey arena and City Center, which has built hundreds of thousands of square feet of offices, retail stores and apartments in the city, are solid choices to reach that goal. .
“J.B. Reilly’s work has definitely been solid,” Alan Jennings, an advocate for low-income and vulnerable residents in the area, told The Capital Star. He was also a founding member of the board that oversees the development of the Allentown Neighborhood Improvement Zone.
Legislators who voted against the sale said they were offended by the urgency and limited information about the deal. 156-44 in the house and 47-2 In the Senate, with all “No” votes by Republicans.
Lebanese Republican MP Russ Diamond said, “Half of my objections to it were that it would not pass the smell test.” I didn’t have the right information.”
Somerset Republican MP Karl Metzger said a member of the House Republican caucuses said he had concerns about the sale process and said the land was worth more than the $5.5 million set by Brown’s law.
“I was going to err on the side of caution when I was presented with it,” said Metzger, who also voted against the sale.
Lehi Rep. Mike Schlossberg, who owns the district that contained the hospital site until it was redrawn in a recent legislative reorganization, called the sale “as fair as possible.” I called. He said the state had tried for 10 years to sell the hospital’s assets and buildings without success.
Selling it to the city center was the fastest way to get it back to the tax office via a successful qualified developer.
“We have someone with a proven track record in Allentown and the Lehigh Valley, and taxpayers are getting an assessment, and that’s what I want,” Schlossberg said.
A Lehigh Valley businessman with experience in real estate and state government called recent land sale efforts by the General Services Administration, which manages national property, “weird” and “bizarre.”
the third charm
Allentown State Hospital opened in 1912 and has served psychiatric patients from five counties in northeastern Pennsylvania for nearly 100 years. The state’s Department of Public Services, the predecessor of the current Department of Social Services, closed the hospital in 2010, citing a decline in the need for inpatient psychiatric care as modern treatments advanced.
Located off Hanover Avenue, the main road through East Allentown and West Bethlehem, local leaders quickly recognized the hospital site as an opportunity for growth, but efforts to redevelop the site began. It took several years.
The bill authorizing the sale to CityCenter, which Brown introduced in 2017, would allow the General Services Authority, which oversees state property, to negotiate directly with another private developer to sell the land for $2.3 million. It complies with the law. Direct negotiations with his TCA property in Doylestown, Bucks County fell through.
In 2019, Brown sponsored a bill calling for competitive bids to demolish the hospital building and buy and redevelop the site.
Then, according to DGS, the state spent $15.7 million to demolish the historic hospital building over the opposition of local conservationists. Asked for proposals to purchase and redevelop the site in January, DGS received two proposals, one of which he received from City Center.
Both companies were disqualified because they did not meet the minimum requirements set out in the solicitation of bids, said agency spokesperson Troy Thompson, without elaborating.
Thompson declined to identify other bidders, citing proposals received prior to the award of the contract or prior to initiation and rejection of all proposals as an exception to Pennsylvania’s right-to-know law.
Thompson said he recognizes the interests and concerns of community stakeholders and that DGS listens and addresses them when seeking proposals that put the state in a better position to sell its properties. said he worked to
“We can’t decide who will bid on a property or how many bidders from the market will be, but when faced with no response to an invitation, let’s determine what went wrong. Please confirm no response and reissue the invitation,” Thompson said. “Alternatively, DGS can negotiate directly, and there may be opportunities for direct transfer through legislative authorization.”
The $5.5 million sale price was a market value established by independent appraisals of the property after demolition and environmental restoration, Thompson said.
In a statement to Capital-Star, Reilly said City Center submitted a 64-page proposal in May, detailing the site’s mixed-use development, and offered a minimum bid of $5.5 million. rice field. The offer was contingent on City Center being given time to conduct additional due diligence on the property.
In a letter from Reilly to the DGS officer overseeing the bidding process, dated May 18, the deadline for proposals, Reilly explained that City Center’s failure to comply with state requirements would result in a proposal with contingencies. I wrote that I did not allow .
“While there is interest in pursuing redevelopment of the site, a preliminary evaluation has identified several significant concerns that require additional evaluation before the project can proceed unconditionally,” Reilly wrote. I’m here.
City Center needed time to conduct environmental testing of the landfill, subterranean rock testing, and feasibility study of the zoning and land-use changes needed to build the proposed redevelopment, it said. Read the letter.
He concluded in writing that City Center would pay the state minimum price of $5.5 million if the state entered into a sale agreement that allowed City Center to address its concerns.
In a statement, Riley said after four months of consideration and planning, City Center is ready to proceed with its offer to purchase the property.
in the zone
The relationship between Browne and Reilly goes back to childhood. They grew up opposite each other in Salisbury Township, a suburb of Allentown.
In 2009, Congress passed Brown’s bill. This left downtown Allentown with department stores closing for a long time or relocating to suburban shopping malls, office workers were scarce, and the rest of the business was struggling.
Brown’s law created the Neighborhood Improvement District, a 128-acre special tax district that includes portions of the city’s central business district and the Lehigh River waterfront.
Developers building in the zone can use projected future tax revenue generated by the project as collateral to fund construction. Once the building is complete, the owner can use sales tax, payroll tax, and other state taxes to pay the project debt service.
Over the past decade, Reilly’s company, City Center, has been the biggest beneficiary of the program, completing over 20 projects including apartments, hotels, mid-rise office buildings, and renovations of existing retail and restaurant spaces. .
State Department records show that the largest donor to Brown’s failed 2022 primary campaign was the political action committee of lobbying firm Pugliese Associates, which lists City Center as a client.
Pugliese donated $252,500 to Brown’s campaign, according to the campaign’s financial report. Riley and his business partner Joe Topper were Pugliese’s largest donors, each contributing his $100,000 to the commission, campaign finance records show.
Brown lost the party nomination in May, Jarrett Browndirector of the Parkland Board of Education, which was heavily supported by a handful of wealthy donors, including mega-donor Jeffrey Yas, who poured $410,000 into Coleman’s campaign.
“Very Easy to Develop”
Allentown developer Nat Hyman said he offered to buy the intact hospital building for $2.3 million when the state was planning to demolish it.
“Wait a minute, I said I would buy the property today and check it for $2.3 million on the check. You don’t have to spend state money to demolish it,” Hyman said.
Hyman said it made no sense why the state hadn’t put the property up for bid again without the restrictions CityCenter disputed.
“If there were no restrictions and we could buy a 200-acre property in downtown Allentown, the interest in buying would never run out,” says Hyman.
Former Bethlehem mayor John Callahan, who now works for Peron Development, said his company is considering bidding on the property. I was worried about the steep slope, but it was an attractive piece of land. But the company’s leaders decided there were enough projects in development at the time, Callahan said.
“I think it’s a very developable parcel of land. You don’t want to see it vacant for very long,” Callaghan said.
