The New York Times covers an Allentown development project led by J.B. Reilly ’83. The $340 million development includes
More than 600,000 square feet of office and retail space is being built in the long-depressed center of this city, spurred by an unusual state-sanctioned project that permits revenues from tenants’ tax bills to be used to pay down some of the debt incurred during construction.
A five-block area of downtown characterized by dollar stores and low-budget pizzerias — signs of the decades-old decline in manufacturing and urban flight — is undergoing revival efforts that include plans for a hockey arena and a hotel.
The development leverages a tax program known as the Neighborhood Improvement Zone.
The strength of the improvement zone model is that it depends on the developer’s ability to attract revenue-generating tenants and is not based on state handouts, Mr. Reilly said. “They are pledging the tax revenues related to the developer’s project to the developer’s lender,” he said. “It’s really market driven. If the developer can’t attract tenants, then the developer’s going to be on the hook for repaying the loan.”
Read the full article here. Congratulations J.B.!