Bipartisan state committee agrees to audit Allentown's special tax zone

ALLENTOWN, Pa. — A bipartisan joint committee of the state General Assembly has agreed to audit the city's one-of-a-kind tax zone that's remade Center City over the past decade.

Created in 2009, the Neighborhood Improvement Zone has funneled more than $500 million of state tax dollars into City Center to encourage redevelopment.

Under the program, developers determine how much more tax revenue their project will generate compared with the existing property. If the project is approved, any new taxes generated by the improvements can instead be used to pay off the project's debt service.

The NIZ has transformed Allentown's downtown, bringing in more than $1 billion in investments to the 128-acre area.

Most of the work has been centered around PPL Center and a swath of luxury apartments in the area of 7th and Hamilton streets.

More recently, development has spread blocks away to the Lehigh River Waterfront project, which opened its first building in November.

'Taxpayers deserve to know'

Former state Sen. Pat Browne masterminded the program and crafted it so it would apply only to his hometown.

But his successor, state Sen. Jarrett Coleman, R-Lehigh/Bucks, has proven to be a skeptic.

Late last year, Coleman introduced a resolution calling for an audit of the NIZ and the Allentown Neighborhood Improvement Zone Development Authority, the body tasked with administering the program.

It passed the senate unanimously.

The intention of the NIZ was to attract new businesses and economic opportunities. But critics have argued since its inception that it only harmed nearby communities when their companies packed up for slightly cheaper offices in Allentown.

“Taxpayers deserve to know if their money is being used to create jobs, or if it’s being given to companies that relocate from one part of town to another,” Coleman said in a news release Monday.

“Moving a company from one location to another doesn’t necessarily create jobs or grow our economy.”

Trying to make NIZ transparent

The Legislative Finance and Budget Committee, a 12-member panel of six Democrats and six Republicans from the Pa. House and Senate, agreed Monday morning to conduct the audit.

Two members of the Lehigh Valley's Harrisburg delegation, Coleman and Rep. Steve Samuelson, D-Northampton, sit on the committee.

Sameulson did not immediately respond to requests for comment.

"The state is certainly welcome to have a performance audit conducted. ANIZDA does not have details on the planned audit or how it might differ from the financial audit of the authority performed every year by independent auditors," said ANIZDA Executive Director Steve Bamford in a prepared statement Tuesday afternoon.

State Rep. Josh Siegel, whose district covers a portion of the NIZ, said he was confident in any audit and criticized Coleman's initiative.

“I am disappointed in (Coleman’s) continued fixation on an ultimately redundant and unnecessary audit as the NIZ is already subject to a publicly available audit," said Siegel, D-Lehigh. "I encourage the senator to productively engage with the rest of the Lehigh Valley delegation on more productive endeavors that continue to make the Lehigh Valley a prosperous and desirable place to live and focus on serving his constituents in the 16th Senatorial District."

This isn't the first time Coleman has called for making the NIZ more transparent.

Last March, he introduced legislation that would allow the public to review the tax revenue being repurposed by the NIZ.

That information currently is off limits thanks to an amendment Browne introduced in 2019 in response to an Open Records request by The Morning Call newspaper to review the NIZ's tax reports from 2016-18.

Browne said the amendment was made to protect the corporate tax returns of every business in the state, which were technically reports and could be subject to public scrutiny.