South Whitehall to Join Lawsuit Against Arena Project?

Concerned with the potential impact on township revenues, South Whitehall officials are planning to soon take an official position on the issues surrounding Allentown's Neighborhood Improvement Zone for a new hockey arena.

Township Manager Jon Hammer would not say Thursday afternoon whether the township will join a lawsuit filed against the project by Hanover and Bethlehem townships.

However, he said any official action would be taken by township commissioners, and that action could come as early as the commissioners' next public meeting, on Wednesday, April 18.

A prepared statement released Thursday by Hammer indicated the township's frustration with the special tax incentive zone that was set up to help Allentown build the hockey arena and redevelop other parts of its downtown and waterfront.

That zone in earned income taxes from surrounding municipalities and school districts, though a municipality-by-municipality breakdown has not yet been given.

"It has been our hope that we would be provided with information which would be useful in determining our exposure as it relates to diverted Earned Income Tax revenue," Hammer said in the release. "This information has not been delivered and may not be available until June."

Hanover and Bethlehem townships have already filed suit against the project in hopes of repealing a portion of the law that allows for arena debt to be paid with earned income tax revenues from workers who live outside the city. Ordinarily, earned income taxes paid where someone works are forwarded to their home municipality and shared between that local government and school district.

The Morning Call reported that Allentown Mayor Ed Pawlowski is offering a plan that he hopes will persuade Hanover and Bethlehem townships to drop their lawsuit, which threatens the project. It would create a reserve so that home municipalities would receive current earned income taxes withheld from people who work in the city but live elsewhere, the report said.

Hammer said he did not know whether the mayor's plan would apply to all affected municipalities or only those that brought the lawsuit. He said however, "We want a seat at that table."

Early in January, Allentown's Neighborhood Improvement Zone created a firestorm when local municipal officials came to realize they would lose earned income tax to the arena construction project. At the time, Hammer said .

In the release, Hammer said the township's concerns are compounded by the "artificially subsidized rents" inside the zone. "Ironically, our Earned Income Tax will be used to subsidize lower rents within the NIZ (Neighborhood Improvement Zone), potentially luring South Whitehall businesses into the NIZ and out of South Whitehall."

He said in the release that township officials are hopeful for "a collaborative and amicable resolution."