City of Allentown
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Transforming the landscape of a city
Sometimes, it really does come down to location, location, location. At least, that’s the case for the City of Allentown. Located just an hour north of Philadelphia and a 90-minute drive west of New York, Allentown is strategically positioned. Serving 30 million people from the area within a five hour drive, the city is well-connected with two major inter-states and the Pennsylvania Turnpike. Because of its location, the city has drawn a lot of interest from several companies who are looking to hit this regional marketplace.
Diversified economy and location key attractions for business
The local economy has recently diversified. Several Fortune 500 companies have planted roots in the Allentown area, including PPL (Pennsylvania Power and Light), Air Products & Chemicals, Olympus, LSI, as well as Siemens, which has a facility in a neighboring community called Bethlehem. While there are large corporations that dominate on the local landscape, small businesses are also on the rise.
Out of the 14,000 employers that work in the region, only 1,100 have 50 or more employees. Over the course of the last twenty years, the area has turned from one that consisted of larger firms to one that is now a community dominated by small business. Many people believe this change has helped the city weather the economic storm. But it wasn’t always so easy.
Three years ago, when officials looked out to the horizon, they saw a place that was destined for financial failure. With an $8-million budget deficit at the top of a list of numerous issues, the city was on the verge of bankruptcy and fiscal insolvency. With the help of a bi-partisan team of community leaders and financial experts, city council and the controller, the City put into place improved budgetary practices, balancing revenues with expenditures. The mayor didn’t hesitate to tackle difficult problems head on, bringing in new sources of revenue, restructuring the debt and addressing the city’s pension liabilities. Three short years later, the city went from a projected deficit of $8 million dollars to a surplus of $14 million dollars—and did it without raising taxes.
Multiple challenges and budgetary cuts initiated change
Without a doubt, the city has had its good share of challenges along the way. Interestingly, good leadership has pushed the city’s major initiatives forward and upwards. Take this one example. “Mack Trucks decided to take their operations to North Carolina. We had over a 50,000 square foot corporate center here. With the help of a developer, Lehigh Valley Hospital is consolidating offices within the city” says Ed Pawlowski, Mayor of Allentown. The maverick of a mayor has initiated some creative problem-solving and put forward bold ideas to get the city back on the map. And it’s working.
With a third of the city’s police force retiring, which has since been rebuilt, the mayor has worked hard to push through new and innovative ideas, including the installation of security cameras and, perhaps more boldly, going after non-compliance offenders in a Landlord Hall of Shame. Some of the worst offenders that refused to comply with codes have their pictures of their homes in New
Jersey posted on the city website, in addition to the property owned in Allentown. “We send out press releases on the local newspapers, hold press conferences about these properties and post notices with their home phone numbers and home addresses, so constituents can write or call to let them know how much they appreciate them deteriorating their own property,” explains Pawlowski. “It’s had a tremendous effect; we have a lot of compliance as a result. People are starting to clean up their properties, neighborhoods are improving and our crime rate is down by 20 percent over the last four years,” he adds.
Presidential visit draws attention the needs of small businesses
Last month, the Mayor and a number of business leaders met with President Obama just after his administration’s Jobs and Economic Growth Forum in the Eisenhower Executive Office Building. At the end of the Summit, Obama summoned Pawlowski to the stage to introduce him to the audience and talk about his visit. “We talked about the challenges and opportunities affecting the city and his visit to Allentown the following day,” said Pawlowski.
The next day the President hosted a luncheon meeting with local small business leaders. One idea that came from the meeting was a proposal for a tax credit which would be sold to equity investors and would benefit an increasing number of small businesses. This is similar to what they are proposing with the carbon credits or the new market tax credits, so small business owners can access capital and be able to provide the resources that they need to expand and grow their business.
Another subject discussed was the idea of tax credits for angel tree investors or family and friends who financially assist small business owners. “We talked about the struggles of running a small business due to the lack of access to credit and the need to free up credit markets, or look for new ways. There were some really innovative ideas that came out of that discussion in the diner, which I think President Obama listened to. In turn, he talked about how some of team members will be taking their suggestions and formulating them into some concrete policy ideas,” says Pawlowski, who added that he was impressed with the President’s intellect, ability to grasp the facts, active listening skills and efforts to develop creative policies and solutions to aid job growth in the U.S. “It was truly a once-in-a-lifetime experience,” he says.
Key initiatives
Over the past two years, no less than $488,000,000 (almost a half a billion) in new development projects have sprung up in every section of the city. Here’s a list of the key initiatives.
1) Tax-free incentives attract investors: In its efforts to rebuild the local economy, the city is attracting corporate investors into what is referred to as Keystone Opportunity Zones, which provide relief from all state and local taxes for 10 years. “We feel we are in a unique position to attract companies from New York and New Jersey, over the border. Our tax rate structure is very low, and we have an educated and hard working workforce which we hope to use to attract more companies to the city.
2) Riverfront development project: there is about 140-acres of developable land and incidentally, it is on the only navigable waterway in the region. For many years, however, the area was underutilized. But that is no longer the case. Allentown’s riverfront is seen as a great asset and jewel of the city, which is on the cusp of revitalization. A minor league hockey arena is a key component in the development of the riverfront. “The Phantoms triple A team of the Philadelphia Flyers had been playing in the Spectrum in Philadelphia. That is being torn down for retail development. The owners want to bring that team here, which will be great because we just picked up the Phillies’ triple A affiliate two years ago,” says the mayor.
3) Tax break: The city was able to obtain a special exemption from the state that allows them to use a sales tax for financing, so instead of all sales tax going to the state, that six percent goes toward paying for Tax Incremental Financing or, a TIF. “With that, we can actually provide some hotels and retailers financing for about 50 to 80 percent of the project’s cost, which they may not be able to find anywhere else in the country,” explains Pawlowski.
4) Improving police force to reduce crime and improve quality of life.
A great place to live, work and invest
Allentown has come a long way in 20 years. The mayor agrees. “We have really matured as a city and as a region. We’ve come from an environment where large corporations and industry dominated the landscape which is now diverse—both economically and culturally—mostly dominated now by small business,” says Pawlowski.
www.allentownpa.gov
Sometimes, it really does come down to location, location, location. At least, that’s the case for the City of Allentown. Located just an hour north of Philadelphia and a 90-minute drive west of New York, Allentown is strategically positioned. Serving 30 million people from the area within a five hour drive, the city is well-connected with two major inter-states and the Pennsylvania Turnpike. Because of its location, the city has drawn a lot of interest from several companies who are looking to hit this regional marketplace.
Diversified economy and location key attractions for business
The local economy has recently diversified. Several Fortune 500 companies have planted roots in the Allentown area, including PPL (Pennsylvania Power and Light), Air Products & Chemicals, Olympus, LSI, as well as Siemens, which has a facility in a neighboring community called Bethlehem. While there are large corporations that dominate on the local landscape, small businesses are also on the rise.
Out of the 14,000 employers that work in the region, only 1,100 have 50 or more employees. Over the course of the last twenty years, the area has turned from one that consisted of larger firms to one that is now a community dominated by small business. Many people believe this change has helped the city weather the economic storm. But it wasn’t always so easy.
Three years ago, when officials looked out to the horizon, they saw a place that was destined for financial failure. With an $8-million budget deficit at the top of a list of numerous issues, the city was on the verge of bankruptcy and fiscal insolvency. With the help of a bi-partisan team of community leaders and financial experts, city council and the controller, the City put into place improved budgetary practices, balancing revenues with expenditures. The mayor didn’t hesitate to tackle difficult problems head on, bringing in new sources of revenue, restructuring the debt and addressing the city’s pension liabilities. Three short years later, the city went from a projected deficit of $8 million dollars to a surplus of $14 million dollars—and did it without raising taxes.
Multiple challenges and budgetary cuts initiated change
Without a doubt, the city has had its good share of challenges along the way. Interestingly, good leadership has pushed the city’s major initiatives forward and upwards. Take this one example. “Mack Trucks decided to take their operations to North Carolina. We had over a 50,000 square foot corporate center here. With the help of a developer, Lehigh Valley Hospital is consolidating offices within the city” says Ed Pawlowski, Mayor of Allentown. The maverick of a mayor has initiated some creative problem-solving and put forward bold ideas to get the city back on the map. And it’s working.
With a third of the city’s police force retiring, which has since been rebuilt, the mayor has worked hard to push through new and innovative ideas, including the installation of security cameras and, perhaps more boldly, going after non-compliance offenders in a Landlord Hall of Shame. Some of the worst offenders that refused to comply with codes have their pictures of their homes in New
Jersey posted on the city website, in addition to the property owned in Allentown. “We send out press releases on the local newspapers, hold press conferences about these properties and post notices with their home phone numbers and home addresses, so constituents can write or call to let them know how much they appreciate them deteriorating their own property,” explains Pawlowski. “It’s had a tremendous effect; we have a lot of compliance as a result. People are starting to clean up their properties, neighborhoods are improving and our crime rate is down by 20 percent over the last four years,” he adds.
Presidential visit draws attention the needs of small businesses
Last month, the Mayor and a number of business leaders met with President Obama just after his administration’s Jobs and Economic Growth Forum in the Eisenhower Executive Office Building. At the end of the Summit, Obama summoned Pawlowski to the stage to introduce him to the audience and talk about his visit. “We talked about the challenges and opportunities affecting the city and his visit to Allentown the following day,” said Pawlowski.
The next day the President hosted a luncheon meeting with local small business leaders. One idea that came from the meeting was a proposal for a tax credit which would be sold to equity investors and would benefit an increasing number of small businesses. This is similar to what they are proposing with the carbon credits or the new market tax credits, so small business owners can access capital and be able to provide the resources that they need to expand and grow their business.
Another subject discussed was the idea of tax credits for angel tree investors or family and friends who financially assist small business owners. “We talked about the struggles of running a small business due to the lack of access to credit and the need to free up credit markets, or look for new ways. There were some really innovative ideas that came out of that discussion in the diner, which I think President Obama listened to. In turn, he talked about how some of team members will be taking their suggestions and formulating them into some concrete policy ideas,” says Pawlowski, who added that he was impressed with the President’s intellect, ability to grasp the facts, active listening skills and efforts to develop creative policies and solutions to aid job growth in the U.S. “It was truly a once-in-a-lifetime experience,” he says.
Key initiatives
Over the past two years, no less than $488,000,000 (almost a half a billion) in new development projects have sprung up in every section of the city. Here’s a list of the key initiatives.
1) Tax-free incentives attract investors: In its efforts to rebuild the local economy, the city is attracting corporate investors into what is referred to as Keystone Opportunity Zones, which provide relief from all state and local taxes for 10 years. “We feel we are in a unique position to attract companies from New York and New Jersey, over the border. Our tax rate structure is very low, and we have an educated and hard working workforce which we hope to use to attract more companies to the city.
2) Riverfront development project: there is about 140-acres of developable land and incidentally, it is on the only navigable waterway in the region. For many years, however, the area was underutilized. But that is no longer the case. Allentown’s riverfront is seen as a great asset and jewel of the city, which is on the cusp of revitalization. A minor league hockey arena is a key component in the development of the riverfront. “The Phantoms triple A team of the Philadelphia Flyers had been playing in the Spectrum in Philadelphia. That is being torn down for retail development. The owners want to bring that team here, which will be great because we just picked up the Phillies’ triple A affiliate two years ago,” says the mayor.
3) Tax break: The city was able to obtain a special exemption from the state that allows them to use a sales tax for financing, so instead of all sales tax going to the state, that six percent goes toward paying for Tax Incremental Financing or, a TIF. “With that, we can actually provide some hotels and retailers financing for about 50 to 80 percent of the project’s cost, which they may not be able to find anywhere else in the country,” explains Pawlowski.
4) Improving police force to reduce crime and improve quality of life.
A great place to live, work and invest
Allentown has come a long way in 20 years. The mayor agrees. “We have really matured as a city and as a region. We’ve come from an environment where large corporations and industry dominated the landscape which is now diverse—both economically and culturally—mostly dominated now by small business,” says Pawlowski.
www.allentownpa.gov
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