Allentown's hockey arena won't open until at least 2013, but the first of the office employees it is expected to attract have already started to arrive.
More than 70 workers from Lehigh Gas Corp. and West Park Insurance are moving onto Hamilton Street this week, the first trickle of what is projected to be hundreds, and perhaps thousands, of new workers attracted to what city officials hope will become the Lehigh Valley's new financial district.
The new companies moved into the Wells Fargo bank building at 702 Hamilton St., the new headquarters for City Center Investment Corp., which was created to develop properties around the proposed hockey arena. A third company, a yet-to-be-named engineering firm, is scheduled to move in early next year.
The new workers will be surrounded by heavy machinery for at least the next two years, with a $120 million arena soon to be under construction across the street and a $50 million office complex being built next door. But that didn't seem to bother Lehigh Gas Chief Executive Officer Joe Topper.
"There is so much excitement and anticipation about the economic development efforts in downtown Allentown, and Lehigh Gas wants to be an anchor of the revitalization effort," Topper said. "As we sought to consolidate multiple offices and plan for growth, we chose City Center over sites in New Jersey, New York and Ohio."
The new tenants' arrival confirms both the hopes of city officials billing the arena and the special taxing district as the answer to Allentown's struggles, and the concerns of critics who worry the Neighborhood Improvement Zone will just poach tenants from other parts of the Valley and state.
Topper stressed his company is a $2 billion-a-year operation with 1,700 workers in six states, and said he considered moving out of state from his now-vacant headquarters building in Lower Saucon Township. But there is no denying that Allentown's gain is Lower Saucon's loss, and West Park Insurance came from west Allentown, moving just 13 blocks down Hamilton Street.
One real estate expert has likened that kind of movement to rearranging the deck chairs on the Titanic, but Mayor Ed Pawlowski doesn't see it that way.
"The downtown is the heart of any city — make sure it's healthy and the rest of the body will follow," Pawlowski said. "As this progresses, you are going to see out-of-area and out-of-state companies relocating to our downtown. I'm not worried about that."
Demolition has started on the block at Seventh and Hamilton streets where the 8,500-seat hockey arena is scheduled to open in September 2013 for the minor league Phantoms, the Philadelphia Flyers' top affiliate.
Planners say the arena and the taxing district, which funnels all state and local taxes except real estate toward development and which will pay much of the cost of the arena and new buildings, will remake Allentown.
Topper, in an email, said his relocated employees will be paying $300,000 to $400,000 a year into the NIZ fund. City Center owner J.B. Reilly can use that money to pay off the loans on his proposed $50 million office, retail and parking complex to be built behind his existing 702 Hamilton bank building. Topper added he expects to expand Lehigh Gas' presence in Allentown to draw as many as 150 workers in the next few years.
Ultimately, Reilly expects to attract 700 new engineering, accounting and financial business workers into what he's calling One City Center, which he will own with Topper.
Much like the taxes paid by Topper's workers, the state taxes paid by all those new workers will be flowing into a fund City Center can use to pay its construction debt, enabling Reilly and Topper to offer lease rates roughly 30 percent below market rates. It's that NIZ subsidy that city officials say will spur a projected $800 million in development downtown over the next 15 years.
To make way for the new tenants, City Center spent about $750,000 renovating 702 Hamilton, and earlier this month began site work on One City Center, which is expected to include 250,000 square feet of office space, several retail shops and a 570-space underground parking garage. As many as 200 upscale apartments are slated for a later stage.
Reilly already has approval for $20 million in NIZ financing through the Allentown Commercial and Industrial Development Authority, but says he will likely apply for more to have One City Center open by the end of 2013.Copyright © 2015, Los Angeles Times