May 22, 2011

Our School Taxes for Hockey Arena

Guest Post by David Fehr Zimmerman
Sports Arena Financing through the NIZ (Neighborhood Improvement Zone)
An article on the WFMZ web site, perhaps, provides some insight into this issue(March 3, 2011 - Jocelyn Moes).
It refers to the establishment of a Neighborhood Improvement Zone empowered inHB 1614 THE FISCAL CODE - OMNIBUS AMENDMENTS Act of Oct. 9, 2009, P.L.537, No. 50 Cl. 72 Session of 2009 No. 2009-50 ARTICLE XVI-B as a financing mechanism for this project.The articles states:"A majority of the project will be paid for by the creation of a 130-acre Neighborhood Improvement Zone, or NIZ.""It essentially is a self-financing part of the project because what you will use are future tax receipts that the project generates to pay for the debt service for the project's existence," said Mann, who added that sales and use taxes, state income taxes, and property taxes could all be used as long as they're generated within the130 acres."That could include not only the arena, but surrounding homes and businesses."Mann said people in the NIZ zone wouldn't be paying any more taxes than they normally pay. The money would just be going directly to pay off the project." Instead of being collected and going to their normal coffers, those taxes generated from the facility will be redirected towards debt service on the facility," said Mann.From my review of the legislation it is unclear as to exactly what tax revenues will be included relative to real estate. I am waiting to hear from Pat Browne's legal staff on this issue. It is critical to consider Mann indicating the list of taxes that "could be used as long as they are generated within the 130 acres".Within a 409 meter radius of the center of the block proposed for development,approximately the same area as 130 acres, there are approximately 708 structureand/or land parcels with an assessed value of approximately $88,823,000.If property taxes are included the property tax liability to the school district could beapproximately $4,049,618. The city is $1,533,874 and the county is $1,056,994 A sizable sum given the current financial condition of the state, county, city and school district of Allentown. If the property taxes are ear marked for diversion the school district may need tocome up with another $4,000,000 to balance the budget as declared by the new authority? This year or next? I question if we could end up trading education for economic development? I hope the reference by Ms Mann to property taxes in the WFMZ article is a misstatement. It seems to me the enactment of this bill and the development of this project could result in the diversion of tax dollars to pay the debt services on the financing of a development for entertainment based services without any real regard for the state of the other entities and the economy. Could this really happen?
Channel 69 Article
Google Map-130 Acre Area
List of NIZ properties and tax liability calculations
Act 50-2009
title and photograph added by molovinsky


Anonymous said...

I'm inside that circle and it galls me to no end to be involved with a sports stadium or for that matter any project involving so called eminent domain.
Need to build a school, I understand.
This is theft by any description!

Anonymous said...

Retired ASD teacher here.

I never fell for the supposed benefits of the redirected taxing district. Step back for a moment and consider what such a plan really means.

The state (and other entities) currently receives operational funding FROM that district, FOR the needs of that district. Now, those SAME funds are spent on an entirely NEW purpose, be it a stadium, an arena, etc.

BUT . . .

The original needs of that district, once paid for by usual taxation, STILL exist! Who picks up the slack? The newly created deficit?

The answer seems to be ALL of Pennsylvania's taxpayers, including those within Allentown's special zone. There is NO free money!

If school taxes are included in such a "sleight of hand" manuever the scheme is even more shameful.

michael molovinsky said...

i'm grateful for zimmerman alerting us to the fact that the ACT 50 seems to open the door for use of all property taxes. he is waiting to hear from State Senator Brown's office exactly which taxes will be used originally.

also of concern is city council approving the eminent domain process with no public discussion or input. statements at the meeting by julia guridy suggest behind the scenes discussion, which may well be in violation of the sunshine act.

Anonymous said...

You might do well to read some MCall reporting on this issue. Browne has said the zone was not intended to include currently tax-producing properties, and that he would personally ensure the city does not ensnare a ton of viable properties in the zone. Whether or not you trust his oversight is another thing... the legislation is vague.

michael molovinsky said...

anon 8:59, brown or his office was NOT among those speaking out against the implementation of eminent domain wednesday evening. to my knowledge, only one parcel involved was already in the public domain. at any rate, as mentioned in this post, zimmerman has requested clarification from brown's office in regard to the use of school taxes. i will inquire if the 700 block of hamilton is an appropriate venue for ACT 50.

Anonymous said...

"I'm inside that circle..."

Well, well, well.

Looks like someon's Progressive Liberal Elite Bureaucrat buddies did not know best this time, did they?


Oh well...another day...another RUBBER STAMP!

Anonymous said...

"Governments rarely break even shelling out handouts to professional sports franchises says Christopher Borick, an associate professor of political science at Muhlenberg College who has researched sports financing and stadium construction.

'You'd be hard pressed to show...that it's worth the investment. The numbers don't add up,' he (Borick) says."

April 22, 2009
Christina Gostomski



Mr. Molovinsky,

It is just me?

Or does The Morning Call no longer print articles criticizing government financing of sports stadiums any longer?

And, if that is true, how can I ever trust this local medium again when it appears to have flip-flopped so radically?

(to speak nothing of smugly)



Anonymous said...

It is just me?

Or does The Morning Call no longer print articles criticizing government financing of sports stadiums any longer?

Not that nor other things either.
Can you find the MC poll showing respondents 3 to 1 against this project?
All the articles about the eminent domain proceedings have comments removed and show positive (to the administration) slants.

Anonymous said...

To: Mr. Zimmerman and his lovable wife,

Thank you so much for researching the HB 1614 that Senator Pat Browne and Jennifer Mann instituted so vaguely. Your support is so greatly appreciated by the residents and merchants on Hamilton. I have not been able to get any information from Pat Browne's office...

Irony? 2 city council members - Mike Schlossberg worked as an aid for Jennifer Mann and Peter Schweyer is currently the chief of staff for Jennifer Mann.

This has been such a gross abuse of the political power.....

- said...

Many thanks for your kind remarks. We have so much in this city. I think many times we forget all that we do have.

My thoughts as well as those of my wife and many of our friends are with all of those who are going through this challenging time.

Keep up the fight one day at a time.

David Fehr Zimmerman

P.S. - I still have not heard from Pat Browne. I understand the city is meeting with ASD today to clarify the NIZ tax issue.