The Allentown Neighborhood Improvement Zone Development Authority has secured a new $10 million line of credit to complete previously approved public improvements within the tax incentive district and fund additional projects.
Because of past volatility in annual NIZ tax revenue, its lender is asking the zone’s primary developer, City Center Investment Corp., to guarantee future annual debt payments, giving the developer a greater say in projects on public property.
The authority board of directors on Wednesday approved the seven-year line of credit with Peoples Security Bank to fund streetscapes, parks and green spaces, parking facilities and public transportation initiatives, among other possibilities. It replaces an existing line of credit that expires this month. ANIZDA must pay down its balance annually if it’s under $2 million, or pay at least $2 million if the balance exceeds that amount.
Past public improvements funded by the authority have included sections of the Arts Walk and downtown parking kiosks. Funded but incomplete projects include a $2.5 million transformation of Center Square and $1.5 million in streetscape improvements on the 500 and 600 blocks of Hamilton Street.
The authority covers debt payments on the public improvement line of credit with the annual NIZ tax revenue left over after it makes a payment on PPL Center debt, allocates funds dedicated to developer debt and sends $22 million back to state coffers (which represents the amount of revenue businesses in the NIZ were generating nearly a decade ago, before creation of the zone).
In three of the last four years, the NIZ has had surpluses exceeding $8 million. But after an 11% drop in revenue in 2018, the authority could only send $20.5 million back to Harrisburg and had nothing left over to make a $1 million payment on the public improvements loan. It ultimately covered that payment by returning funds dedicated to the stalled Center Square and Hamilton streetscape projects.
In previous years, City Center agreed to cover a limited portion of the authority’s annual payment on its public improvements loan if there was insufficient NIZ revenue to cover the payment. As the guarantor, it held one of five seats on the authority’s public improvements committee.
Under the new agreement, City Center will guarantee the full annual payment, or up to $2 million. While the terms are still being worked out, ANIZDA Executive Director Steve Bamford said City Center will have a say in proposed public investments.
“As we move forward and consider soliciting new applications, we really have to do so in consultation with the guarantor,” he told board members Wednesday.
The city’s planning and zoning bureau, Bamford said later, will still wield the most influence over the projects because the investments are in city property.
ANIZDA’s public improvements committee hasn’t met since December 2018 to discuss projects because of the insufficient funding to pay for them. Adrian Shanker, an ANIZDA board member and executive director of the Bradbury-Sullivan LGBT Community Center, said Wednesday that he’s eager to finance “a number of necessary projects that go in slightly different directions than what’s been done in the past.”
“I’m not suggesting that public improvements would somehow be too controversial to move forward without the support of [City Center], but … as new projects are considered, there are some really important public improvements that would lead to environmental progress and also meet the needs of people in the city that haven’t always been met,” he said.
Shanker gave examples such as bike share initiatives or more bike parking, solar panels on publicly owned buildings and more public art. He suggested that using the public improvements fund in the past to pay for the parking kiosks was a poor use of scarce dollars.
Board member David Mickenberg reiterated concerns about better defining what qualifies as a public improvement and establishing firmer deadlines for projects. Once the new line of credit is in place, he recommend the board consider updating the guidelines to allow for the reevaluation of projects that haven’t made use of funding within two years.
“The performance of the fund up to this point raises some real issue for us to think about and make decisions on,” he said.
City Center officials were unavailable to comment.
Morning Call reporter Andrew Wagaman can be reached at 610-820-6764 or [email protected]
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