Allentown City Council confirms long-delayed NIZ authority nominees

Battle begins over future appointments to 9-member board

An Allentown City Council hearing Wednesday rehashed old debates over the purpose and governance of the authority overseeing the Neighborhood Improvement Zone — but culminated with a new twist.

City Solicitor Matthew Kloiber suggested that the mayor has sole authority to make appointments to the nine-member board of the Allentown Neighborhood Improvement Zone Development Authority.

The NIZ is a 128-acre special taxing district in which developers can tap a slew of state and some local taxes to cover project debt service. It has driven the development of PPL Center and numerous office towers and apartment buildings along the Hamilton Street corridor. The ANIZDA board reviews and approves project financing, and funds some public improvements within the zone.

Written in 2012, the ANIZDA bylaws divvied up board nominations between Allentown’s mayor, the state senator representing Allentown, and the state representative representing the section of Allentown in the NIZ. Per an unwritten rule, former Mayor Ed Pawlowski, state Sen. Pat Browne (who authored the NIZ legislation), and state Rep. Peter Schweyer also agreed to only advance nominees that all three supported for a City Council confirmation vote.

Last year, Browne, Schweyer and Mayor Ray O’Connell agreed to codify this process into ANIZDA’s bylaws. Browne and Schweyer then blocked O’Connell’s nomination of Gregory J. Edwards, a city pastor and community activist, to fill a vacancy left by former Muhlenberg College President John Williams in June 2019.

But it is “questionable to doubtful” that the ANIZDA bylaws would withstand legal scrutiny, Kloiber determined Wednesday following a recent council request to examine the bylaws.

ANIZDA was incorporated under the provisions of a state economic development law that spells out how such governing bodies should work. That law defers board appointment procedures to municipalities that function under a home rule charter, such as Allentown, Kloiber noted.

Allentown’s home rule charter specifically gives the mayor authority to make appointments, and council the authority to confirm or reject them. The mayor can choose to delegate some of those appointments to others like Browne and Schweyer. But at least according to Kloiber’s interpretation, the mayor can also choose to control all nine ANIZDA board seats, regardless of the board’s bylaws.

O’Connell didn’t say Wednesday how he planned to handle future appointments. Reached after the meeting, Browne said he “respectfully disagrees with this legal position and am in full agreement with the mayor as to the efficacy of the current ANIZDA board appointment process.” Schweyer wasn’t immediately available to comment.

With O’Connell’s encouragement, council voted Wednesday to finally approve Williams’ replacement on the board: Lewis Edwards, a small-business lending specialist and former city economic development official (and not related to Greg Edwards). It also confirmed Stephen K. Breininger, PPL Electric Utilities’ vice president of finance and regulatory affairs, to replace Gregory Dudkin, president of PPL Electric Utilities. And in a third vote, council approved the reappointment of longtime ANIZDA board Chairman Sy Traub.

Councilwoman Ce-Ce Gerlach voted against all three appointments, and Councilman Joshua Siegel voted against the Breininger and Traub appointments. Both Gerlach and Siegel vowed to challenge the legality of the ANIZDA bylaws in the near future.

“The city needs to act immediately to redress the bylaws to reflect the fact the mayor has the authority to make all nine appointments with the advice and consent of City Council,” Siegel said, arguing further that it is best for democracy.

“It’s unfortunate that they would prefer and advance a process of full control rather than understanding the merits of the current collaborative consensus process among the redevelopment zone’s stakeholders and fiduciaries,” Browne said later.

ANIZDA solicitor Jerry Frank participated in Wednesday’s meeting but wasn’t asked to respond to Kloiber’s legal interpretation. He defended the two state officials’ power to pick the majority of board members on the grounds that state tax revenue makes up more than 95% of all annual NIZ tax revenue supporting development, and has always had the blessing of the mayor.

Frank said Thursday morning he will review Kloiber’s analysis and consider its implications.

Prior to the revelation of Kloiber’s memo, City Council heard a presentation from ANIZDA Executive Director Steve Bamford on the economic development zone’s accomplishments to date and what projects it has coming down the pike. Development funded by the NIZ, he said, now generates about $8 million in property tax per year for the Allentown School District, Lehigh County and city. That figure is expected to continue to rise in coming years. By comparison, developers tap about $3 million a year in other local taxes to help pay down construction debt.

Critics of the NIZ say the transformation of downtown hasn’t occurred with enough input from surrounding neighborhoods, and that the officials overseeing development haven’t focused enough on creating jobs for lower-income city residents, working with minority and women-owned small businesses, or ensuring architectural diversity. Others argue its most prominent developer, City Center Investment Corp., has too much influence in the public-private partnership. Though City Center recently completed a new framework for downtown retail, Siegel asked ANIZDA to work with the city on a separate retail analysis, among other suggestions.

Bamford repeatedly reminded council that the authority’s duty is to approve project financing; what discretion it has over project design is defined by city comprehensive plans that were completed with considerable resident input. He also pointed out that all ANIZDA board meetings are public, and all NIZ developments also go before the city planning commission.

The ANIZDA board appointment process will soon be tested. David Mickenberg resigned from the board earlier this month, and Browne gets to nominate his replacement — at least according to the existing rules.

Even if O’Connell declines to assert his potential newfound powers, a successor may act differently. In fact, Gerlach, Siegel and Council President Julio Guridy are all challenging O’Connell for the Democratic mayoral nomination in the May primary election. So is Matt Tuerk, a former official with the Lehigh Valley Economic Development Corp. and the Allentown Economic Development Corp, and Stevie Jones, a machine operator for Keystone Food Products.