Big investment finally coming
Developers zero in on riverfront. Will gentrification come with it?
Big changes are coming to an often overlooked Allentown neighborhood.
Construction on a $425-million waterfront development, which will bring 12 buildings, a 200-seat amphitheater and Riverwalk trail to the Lehigh riverfront area is underway. The first building is slated to open by the end of the year.
Nearby, another developer, Urban Residential Properties, is pouring millions into rehabilitating old industrial properties near the river into luxury mixed-use developments, and plans to transform two neglected riverfront parks into attractive destinations.
Delays from the pandemic pushed back their plans, but with construction back on track, both developers expect to open buildings by the end of this year.
“By 2029, Allentown will be recognized nationally as one of the best mid-sized cities in the country,” Urban Residential Properties COO John Palumbo wrote in an email to The Morning Call. “I consider anything less a failure.”
It will be the first time in decades that investment has come to Allentown’s waterfront neighborhoods, the 1st and 6th wards. Though it will take years for the developers’ visions to come to fruition, the neighborhood’s transformation has already begun.
The question is: How will millions in new investment transform the wards, two of Allentown’s poorest neighborhoods?
‘Everyone comes from the wards’
The 1st and 6th wards have traditionally been a working class neighborhood, often the “jumping off point” for immigrants who come to Allentown.
A 1985 Morning Call article that profiled the neighborhoods said, “they say everyone comes from the wards.”
Several waves of immigration define the neighborhood, the
oldest in the city. The mid-1800s brought Scottish, Irish, Welsh and English to the 6th Ward, while many Germans settled in the 1st Ward. By the 1870s, more Germans as well as Austrians, Slavs and Italians were moving into the area. In the early 1900s, Christian Syrians moved to Allentown, with many settling in the wards.
The legacy of immigration to the neighborhoods is evident. The neighborhood is home to restaurants with Dominican, Syrian, Kenyan, Turkish and Spanish cuisine. The Polish American citizen’s society, Casa Guadalupe and the Syrian Arab American Charity Association all are based in the 1st and 6th wards.
Today, the neighborhood is 61% Latino, whereas Allentown proper is 54% Latino.
The wards are also one of Allentown’s poorest neighborhoods with a poverty rate of 31%, according to 2019 data. The city’s poverty as a whole is 25.7%.
Longtime residents, former and current, describe the neighborhood as close-knit with a smalltown feel.
“When we needed some sugar for cooking, we knocked on our neighbors doors, said ‘Yo, you got some sugar?’ “said Darian Colbert, director of the nonprofit Cohesion Network, who grew up in the 1st ward. “Or if we needed cream for our coffee, we did the same thing. Or if we were grilling out, we’d swap, say ‘Hey, here’s what we have left, here’s a pork chop.’ That’s what we did, and that’s how I grew up.”
But it’s also been a poor and underserved neighborhood that the city has historically neglected.
That could soon change.
Untapped potential
The wards and the Lehigh riverfront area are former economic strongholds of the city. The riverfront was an industrial quarter that once housed the Lehigh Structural Steel Company, which employed over 500 workers at its peak in the 1960s, according to a 1992 Morning Call article.
Nearby, the former Neuweiler Brewery, American Atelier furniture factory and Iron Works warehouse are abandoned relics of the riverfront’s industrial past.
All of those industrial sites are slated for redevelopment.
The Lehigh Steel Co. will become the Waterfront, a complex of 12 buildings surrounded by green space, an outdoor amphitheater, a farmer’s market plaza and a garden-lined “Riverwalk” pedestrian path. Most buildings will have retail and restaurant space on the ground floor.
Urban Residential Properties has its sights set further inland on several underused former industrial sites including the Neuweiler Brewery, the Iron Mountain warehouse site and the American Atelier building.
To developers, the riverfront contains untapped potential: Several cities — Baltimore, Cleveland and Wilmington, Delaware, for example — have successfully redeveloped their former industrial waterfront spaces into attractive regional destinations.
Developers also stand to benefit from Neighborhood Improvement Zone financing — the zone that went into effect in 2012 and covers debt service for developers who build in the zone that covers Allentown’s downtown and the Lehigh riverfront region. Downtown Allentown has already benefitted from nearly $1 billion in investment since the creation of the NIZ, mostly from one company, City Center Corporation.
And it’s not just developers paying the wards increased attention — the city of Allentown is now setting its sights on the neighborhood. As part of the city’s Vision 2030 plan, a series of progressive policies the city approved in 2019,
Allentown is formulating “neighborhood plans,” and the 1st and 6th wards are first in line.
“I was immediately attracted to the 1st and 6th wards. Those are the places where you really feel the greatest sense of Allentown,” said Mayor Matt Tuerk. “It’s people in those areas that have always defined our city, are now having a more active role in defining it themselves.”
As part of the Vision 2030 initiative, the city held a block party in the 6th Ward last month, aiming to both better connect resources to the community and solicit feedback for a new park at 400 Ridge Ave., currently an empty lot.
Allentown planners worked with students at Harrison-Morton Middle School and Sheridan Elementary School to design concepts for the park. The block party transformed 400 Ridge Ave. from vacant land to a vibrant play space with cornhole, art tables, bubbles and interactive games.
When Alfredo Dominguez moved to Allentown decades ago and opened his business, Dominguez Grocer’s, in 1995, the city never held events like the block party in his neighborhood. He took on that task himself, arranging with the fire department to install sprinklers for kids during the summer, and dressing as Santa in the winter.
He’s glad to see the city step up and pay more attention to the neighborhood. He credits Tuerk, a fluent Spanish speaker, for being engaged with the community and getting to know neighbors who live in the wards.
But the block party also shows the city has a ways to go before the neighborhood is adequately served and resourced. The city and local nonprofits gave away backpacks, school supplies and uniforms to families in preparation for the new school year.
Organizers ran out of backpacks within the first 20 minutes of the event, pointing to extreme demand for basic supplies that parents cannot easily afford.
Changes on the horizon
Developers are pouring hundreds of millions to turn the former industrial waterfront region into a destination.
Beyond just a financial boon to their pockets, developers hope residents see what they’re doing as a benefit to the community.
Jaindl Enterprises, the developer behind the Waterfront, can also trace its origins back to the wards. Janos Jaindl, great-great-grandfather of Jaindl Enterprises co-founder Zachary Jaindl, moved to Allentown from Austria in 1904 and lived on Gordon Street, just three blocks from the Waterfront site.
“The 1st and 6th wards have always been a special place for our family,” Zachary Jaindl said.
Even though the waterfront aims to bring in new residents and visitors, Jaindl said the abundance of public space was done with the existing community in mind.
“Our intention always was to make sure that everyone felt very welcome down here,” Jaindl said.
Palumbo, of Urban Residential Properties, also hopes the neighborhood will support the development they have planned. Urban Residential Properties is a subsidiary of Manhattan Building Co. which has invested over $1 billion to redevelop Jersey City, New Jersey.
Their 25-unit apartment building Riverfront Lofts, on the former American Atelier site, will open in December. But much bigger projects are in the works — the developers recently secured approval from the planning commission for a redevelopment of the Neuweiler building with 286 luxury apartments and has a seven-story, 61-unit luxury building planned nearby on North Railroad Street.
Developers intend to develop most of the Front Street corridor, and have announced intentions to transform the plaza next to the Neuweiler brewery and Buck Boyle Park into attractive destinations.
“We are constantly meeting with the community to determine their needs,” Palumbo said in an email to The Morning Call. “Our goal is to create a vibrant and inclusive community, featuring a plethora of green space and retail space for local entrepreneurs.”
‘Our turn’
Longtime residents of the wards have seen industrial properties crumble and fall apart over the decades. Some residents are glad to finally see them get put to use, and see the redevelopment as a welcome sign that the long-forgotten neighborhood is finally seeing some investment.
“As the manufacturing moved out of the area, and went for more space outside the city, we sort of got left behind,” said Jim Spang, a longtime 6th Ward resident and president of the Riverfront Civic Association. “Now it’s going to be our turn to get the economic development that it deserves.”
“The people in this area feel neglected somehow, because the general feeling is that all the money is being poured downtown,” said Bajen Nije, fiscal officer at Casa Guadalupe, a nonprofit based in the 1st ward.
The neighborhoods have two active community groups that meet regularly: the Riverfront
Civic association and the Cohesion ambassadors group.
Monthly meetings are a chance for neighbors, local business owners and nonprofit leaders to come together to discuss issues and share resources — and also a chance for developers to inform the public about what they’re doing.
At a July meeting, Carlos Tovar, owner of Diseno Urbano architecture studio which designed plans for Urban Residential Properties, presented plans for their development along North Front Street.
He detailed the changes coming to what has long been an underdeveloped area: New public plazas, state-of-the-art buildings, enhanced greenery, a playground for kids.
He wanted to know what people thought. Not all of Urban Residential Properties’ plans are fully approved and mapped out, so feedback could shape the development’s future.
Residents had suggestions: Tone down the concrete, install local art, collaborate with local schools, install workout equipment.
But one longtime resident, who did not identify himself and spoke in Spanish, raised a concern — how could people afford to live in the community if rents continue to rise? Apartments that used to cost $400 or $500 a month now cost $700, and that cost could rise even more, he said.
Tovar offered several placations in response: Developers are working with the community to design its future. They will create jobs to benefit residents and the beautification of the area will lead to an overall better quality of life.
“I understand your concern,” Tovar said. “But we are trying to build a community for all.”
Gentrification and risks
There are others concerned about gentrification, where improved housing and new businesses come to a neighborhood, but lead to inflated rent prices, pushing out poorer neighbors.
“I still have my guard up,” said Yamilett Gomez, a longtime resident and owner of Yamilett’s Unisex Salon on West Gordon Street. “Every time we bring up the conversation of River[side] Drive and all the properties going up, the main concerns is: ‘Is the housing going to be affordable?’ Affordable housing is the number one concern.”
Gomez said she’s glad to see old abandoned buildings such as the Neuweiler finally redeveloped — Palumbo invited Gomez and other residents to a tour of the property — but she’s also worried about her
neighbors, some of whom have already seen their rents rise.
Asked about the risk of gentrification, representatives for both developers touted the investments, jobs and benefits they are bringing to the neighborhood.
“When you talk about the economics of the situation, we are certainly very sensitive to that,” Jaindl said. “We have been working very closely with the city of Allentown and other interest groups to make sure that we provide a very welcoming environment down here at the waterfront, and obviously creating opportunities for the neighborhood to enjoy a new piece of the area.’ ”
To what extent can longtime neighbors share in the wealth created by major new economic development? And to what extent are people at risk of being priced out?
It’s too early to say how the development will transform the neighborhood long term, but risk factors can offer clues.
Researchers Bruce Mitchell and Jason Richardson from the National Community Reinvestment Coalition, a nonprofit in Washington, D.C. focused on housing and poverty, developed a research model that measures levels of gentrification.
Factors that put a neighborhood at risk include: the percentage of the neighborhood that is low income, the percentage who rent their home versus own it, and the average rents and property values.
According to their models, the 1st and 6th wards are at risk. The wards’ poverty rate is 31%, higher than the city’s average, and homeownership is only around 40% in both neighborhoods, which Mitchell called “shockingly low.”
When gentrification occurs, renters are most at risk of displacement. Landlords can legally hike rents without limits because Pennsylvania has no rent control laws. Those residents then are forced to relocate to a more affordable area.
“These neighborhoods here that are adjacent to the waterfront area, my guess is that you’re going to see rents rising,” Mitchell said.
According to Mitchell and Richardson, developers can ease the burden on renters by designating some units as affordable housing. Affordable housing units are for tenants considered low-income who can spend no more than 30% of their wages to afford the rent.
Allentown notes in its Vision 2030 plan that “since market rate housing outpaces the production of subsidized affordable housing,” the city might consider an inclusionary zoning ordinance that would require some affordable units.
But developers don’t currently have plans to make affordable housing units.
“We consider our product a safe and affordable option without
the red tape of affordable housing financing,” Palumbo wrote in an
email.
The future
The development is sure to benefit the city financially, adding long-abandoned buildings back to the city’s tax roll.
The former industrial site slated to become the Waterfront brought in $120,000 a year in taxes before construction began. When construction is complete, it will bring in $4.5 million annually, Jaindl said.
“That tax revenue is going to be crucial to the city for public improvements and school districts,” Jaindl said.
Increasing homeownership in the city could allow more residents to share in the wealth that development it is bound to cultivate. Allentown is looking to increase homeownership, according to its Vision 2030 plan. The plan floats establishing a community land trust, financial assistance for homeowners and an affordable housing loan fund as means to do so.
Residents have described their hopes about the neighborhood’s future with cautious optimism. They’re encouraged that the home
they have seen as long neglected is finally getting attention from the city, and it’s meaningful that developers want to hear their feedback.
They just hope to share in the benefits such a massive investment will bring.
“I think the outcome is going to be good,” Spang said. “But I’m sure
there’s going to be growing pains.”