What is worth of Allentown State Hospital?
As some question $5.5M sale price, neighbors wait for property’s rebirth
Across Hanover Avenue from the grassy, tree-lined entrance to the vast Allentown State Hospital property, neighbors think less about its value in dollars as they do about what it might produce in the future — like jobs, housing and traffic.
Mary Ott, for instance, operates the
With Love
Mary salon directly across the street.
She knows new businesses on the property will create opportunities and drive up property values, while as a mother of two young children she savors the potential for a park to “enhance playfulness for children, enhance the community.”
But the value in dollars is a core issue as the state House prepares to cast a final vote that would, after generations of state ownership, put the 195-acre property close to being in the hands of a private developer.
The proposed sale price is $5.5 million. At least a few people think the property is worth far more.
Last month, the state abandoned its plan approved in 2019 for a sale by competitive bid, after a single round produced two bids the state deemed noncompliant.
Republican Sen. Pat Browne, nearing the end of his tenure as a lawmaker after losing in the May primary, introduced a bill for a direct sale to City Center Investment Corp.
City Center is led by J.B. Reilly, whom Browne has known since childhood. It also led development of Allentown’s Neighborhood Improvement Zone, carried out via legislation written by Browne.
The new, direct sale approach has the support of the state, Democratic Rep. Mike Schlossberg of South Whitehall Township and city Democratic
“I didn’t think we would find an opportunity better than this.”
— Sen. Pat Browne, about the proposed sale to City Center
Mayor Matt Tuerk.
“I didn’t think we would find an opportunity better than this,” Browne said of the proposed sale to City Center.
John Ingram, a commercial real estate appraiser who ran unsuccessfully for mayor as an independent in 2017, challenges that notion.
The proposed sale price of the hospital works out to slightly more than $28,000 an acre.
Ingram said he reviewed a set of recent comparable, commercial-type property sales in the Lehigh Valley and, based on that review, believes the hospital property is worth far more than that figure.
“Based on those sales, the beautiful, prime, ready-for-development, former Allentown State Hospital site, with all utilities and major road frontage and access in place, is probably worth somewhere between $100,000 and $150,000 an acre, or somewhere between $19.5 million and $29.25 million, as is,” he said.
Nat Hyman, a rival developer and also an unsuccessful candidate for Allentown mayor in 2017 who previously offered to buy the property and preserve the buildings that were on the site until 2020, said he believed the value could be $100,000 an acre, or perhaps more.
The $5.5 million sale price was set by the owner of the property — the state — after it had an appraisal done after the hospital buildings were torn down, according to Department of General Services spokesman Troy Thompson.
“Estimated market value was determined to be $5.5 million,” Thompson said.
Asked about Ingram’s statements, Thompson said, “We cannot comment on speculation of what the property value should be.”
The state declined to identify the two bidders on the property and also declined a request from The Morning Call for the submitted bids. The newspaper has submitted a Right-to-Know request seeking those documents.
Group sale
Browne’s September bill calling for the sale was a standalone proposal.
Last week, though, lawmakers attached the proposal to four other proposed sales of state real estate — each in a different county — and inserted the five-transaction package into a bill that already was far along in the legislative process.
The change meant that any lawmaker voting against one of the transactions would be voting against all five.
The combined bill got final approval in a 46-3 vote in the Senate Wednesday and will be up for a final vote in the House as early as Monday. Attempts to contact those who voted “no” — Republican Sens. Doug Mastriano of Franklin County, Cris Dush of Jefferson County, and Kristin Phillips-Hill of York County — were not successful.
Thanks to a recent redrawing of state legislative maps, political jurisdiction over the hospital property will change when the current two-year session ends on Nov. 30.
The bulk of the property will be in the 22nd House District and the 14th Senate District. Neither district has a sitting incumbent.
Opinions on the sale among the four candidates vying for the two jobs are all over the map.
“I am not happy about this. I am an East Sider. The community was not involved at all,” said Republican Robert Smith, who is seeking the House seat and lives about a block from the property. “They should have re-bid. What is the rush? It may be legal, but is it ethical?”
Smith said he thinks the proposed sale undervalues the land.
“Five-point-five million for more than one hundred acres of land? Prime real estate in Allentown?” he said.
Smith’s opponent, Democrat Josh Siegel, sees it differently.
“We tried a public bidding process,” Siegel said. The new proposal, he said, represents “an historic opportunity to invest in the East Side.”
City Center has an excellent reputation, Siegel said, and given its work with the NIZ is in a unique position to carry out redevelopment at the hospital site.
The direct sale, he said, doesn’t mean the community will not be involved in the discussion of what is built.
Republican Dean Browning and Democrat Nick Miller are vying for the 14th Senate District seat.
Miller supports the bill that includes the hospital property sale. The state, he said, went through a bidding process for the property and the current proposal offers “an incredible opportunity to bring it back onto the tax rolls.”
Browning said the state should always go through a competitive bid process to sell its properties. If that fails, he said, “other methods” should be used to dispose of the properties.
In this case, though, Browning said he was not familiar enough with the details to comment on the property sale bill.
The redrawn 16th District will include part of Allentown, but none of the hospital property.
Republican candidate Jarrett Coleman, who beat Browne in the May primary, said the proposed sale to City Center has the appearance of impropriety and may be “complete pay-to-play politics.”
Mark Pinsley, the Democratic candidate, said the direct sale to City Center would be good for Allentown but also appears “kind of weird” and “a little ‘off ’ as sort of one of the last things that Pat Browne does.”
Neighbors wait
Across Hanover Avenue, at least some neighbors are far too caught up in everyday life to pay attention to the details of the proposed real estate sale.
Their strong opinions on future use of the property, though, show how directly the sale will affect them.
Ott, who runs the salon across the street, said she was sure it would be good for her property.
“A part of me also feels sad that there is all that beautiful land out here,” she said. “As a mother of two it would be nice to have more parks.”
Gloria Bonnilla, who is 66 and disabled and lives a short distance away on Hanover Avenue, said she would like to see low-income apartments on the site because the city has a huge problem with soaring rent.
Lori Cornetta can see the hospital property entrance from the yard behind her home on Tilghman Street.
“The traffic around here is horrendous as it is,” she said. “How are we going to deal with more?”