{"id":18377,"date":"2017-07-24T05:00:56","date_gmt":"2017-07-24T12:00:56","guid":{"rendered":"http:\/\/www.yardi.com\/blog\/?p=18377"},"modified":"2020-12-24T22:24:27","modified_gmt":"2020-12-25T06:24:27","slug":"creative-funding","status":"publish","type":"post","link":"https:\/\/www.yardi.com\/blog\/creative-funding\/","title":{"rendered":"Creative Funding"},"content":{"rendered":"

Desperate times call for creative solutions. The city of Allentown, Pennsylvania faced a m\"Gensler_5CC_InnovationTower_061615-2\"<\/a>ultimillion-dollar deficit, high crimes rates, and a dwindling population. A unique approach to capital investment saved the city, producing what the mayor calls \u201cAllentown 4.0.\u201d<\/p>\n

William Billowitch, Controller, City Center Investment Corporation, sits down with Yardi<\/a> to explore the organization\u2019s singular approach to development.<\/p>\n

Built from Necessity<\/strong><\/p>\n

The city of Allentown, the third largest city in Pennsylvania, descended into a rut during the recession. Its blighted neighborhoods became a hotbed for crime. While neighboring cities gradually pulled out of their recession lows, Allentown continued to descend.<\/p>\n

In the effort to save the town, local leaders and visionaries from the public and private sector worked together to draft a revitalization plan for the urban core.<\/p>\n

With that plan in mind, real estate development firm City Center Investment Corporation created City Center Lehigh Valley. The mixed-use complex is helping to transform downtown Allentown into one of America\u2019s most vibrant urban communities. It is a regional center of excellence for business, culture and metropolitan living.<\/p>\n

\u201cOur objective is to stimulate downtown, the economy. We use pretty much almost all Pennsylvania labor, all Pennsylvania products, to build,\u201d says Billowitch.<\/p>\n

With Allentown\u2019s new arena, PPL Center, at its core, City Center includes more than 1 million square feet. The campus includes three Class A office towers, the Renaissance Allentown Hotel, STRATA East and West residential buildings, The Shops at City Center, upscale restaurant space and a co-working space called Velocity.<\/p>\n

The seven-story office building, One City Center, was the first installment of a 10-year master planned project. In addition to office space, it is home to a sports performance and fitness center. One \"STRATA-EAST-CONCEPT-110915-1160x699\"<\/a>City Center is currently fully leased.<\/p>\n

\u201cSince then, we\u2019ve opened a building every year,\u201d says Billowitch. \u201cCity Center\u2019s total investment in downtown Allentown is $400 million, with additional development of office, residential, retail and green space underway. What is really encouraging is all of the office buildings we have opened are fully leased and we can\u2019t keep up with apartment demand.\u201d<\/p>\n

City Center\u2019s third residential building, STRATA Symphony, has 71 apartments and is scheduled to open in December of 2017.<\/p>\n

Bright Future<\/strong><\/p>\n

City Center\u2019s five-year plan includes an additional million square feet, crowned with a project that will consume an entire city block.<\/p>\n

\u201cIt\u2019s going to include the tallest office building in the region and be very energy efficient. It includes an entertainment center, more apartments and has over an acre park. It\u2019s ridiculous,\u201d Billowitch says excitedly.<\/p>\n

The Five City Center complex will be home to the 24-story Innovation Tower, a garage with more than 800 parking spaces and 225 more upscale apartments.<\/p>\n

As predicted, investments sparked growth. Allentown is now the fastest growing city in Pennsylvania. Several corporations have relocated to take advantage of the city\u2019s proximity to New York City, Washington, D.C., Boston, and Philadelphia. Four Fortune 500 companies have headquarters or satellite offices in Allentown.\"1<\/a><\/p>\n

Billowitch says, \u201cYou can see it\u2019s a true model of private-public partnership, between the state, the city and us.\u201d<\/p>\n

City + Private Partnership<\/strong><\/p>\n

City Center\u2019s investment pool required collaboration between state legislators, local businesses, local developers, and private investors.<\/p>\n

The NIZ is a special taxing district that allows developers to tap virtually all the state taxes created by their new commercial tenants to pay off construction loans. It also allows the city to harness taxes paid in the zone to cover the $15.3 million annual public debt on the PPL Center.<\/p>\n

The Allentown Neighborhood Improvement Zone Development Authority (ANIZDA) monitors the distribution of resources. City Center, a private real estate development company, serves as the leading visionary of most NIZ projects.<\/p>\n

As incentives for developing or renting within NIZ, businesses receive favorable rental rates, eligibility for ANIZDA funding for future projects, as well as increased sales due to the revitalization of the area.<\/p>\n

The results: Due to the NIZ more than 2,000 more people are working downtown ranging from entry level to executive. In addition, new NIZ jobs have a combined Estimated Economic Impact of more than $87.5 million, according to the Center for Workforce Information & Analysis.<\/p>\n

The fresh flow of investments transformed a multimillion-dollar deficit into a multimillion-dollar surplus. Mayor Ed Pawlowski calls this renaissance Allentown 4.0<\/a>.
\n