Wednesday, November 25, 2015

Bethlehem Should Bulldoze Martin Tower and Build a Third Downtown

I remember when this re-development would "ruin" Bethlehem too.
There, I said it. Not because I mean it, necessarily, but because it's the only legitimate idea out there. Downtown Bethlehem is an absolute jewel of a place, the business owners there do a great job running businesses, but between them and the NIMBY types who complain about all development in Bethlehem, now crying that the sky will fall if Martin Tower is redeveloped, I've simply read enough. Yes, the developer wants you to shut up and go away, because you're not really productive here. Perhaps the developer's idea does suck, that I don't dispute. It's still something.

A few points-

  1. Martin Tower is an eyesore that is not going to be filled on it's own, period. No corporation is going to move into an old tower. Especially one with asbestos. The idea that the old glory of Bethlehem Steel will be restored with some new corporation in there is idiotic.
  2. This is the perfect candidate for a CRIZ. It's a piece of land that used to produce big-time tax dollars and now just rots away. If you want someone to re-develop it, you need a distinction like this. You can fight the idea that the government is going to play a positive role in creating jobs and wealth by being involved in the economy, or you can embrace it. 
  3. While I get that the normal people who speak out against all redevelopment at Bethlehem City Council meetings hate this idea, there's very little political opposition to this. Mayor Donchez supports the re-zoning. Councilman Reynolds supports it. They ran against each other for Mayor. I guess if you want to say that developers donate to them both, you can play that low blow, but nobody was saying that about the Mayor before, or Willie for that matter, because they aren't "pay-to-play" types. The fact is that a change in zoning is the right move, even if you disagree in this change.
  4. For those who are saying they wanted to see a plan before the re-zoning, that is idiotic. That's against the entire process, and if the city had done that, you'd be crying foul about how they are re-zoning property to fit a major donor and developer's plan to make money. The Zoning Board has to make the changes first. Then a plan is submitted. After that, you can approve it. This isn't different than any other new development.
  5. The City has absolutely underwrote the downtown's success with public money. No, it should not have been slammed in the face of the Hotel Bethlehem's chief, or any other business leader at a public meeting. That it wasn't brought up artfully doesn't make the point less right. I get that, like any other businesses, the ones in downtown don't want competition, and fear competition from a "third downtown" on the West End. I think they are being too fearful, they run wonderful businesses that I love frequenting (like I did last night). I also think they are being a bit hypocritical, as the city has played a big role in their success.
  6. Many of the same people coming to the City Council meeting crying and complaining about the fate of Martin Tower also came and complained about the redevelopment on the South Side, the project that brought Sands Casino and Steel Stacks, amongst other things. That was the single greatest decision the City of Bethlehem, Pennsylvania has made in my lifetime. It's an unassailable success, and these same types opposed that. You are supposed to lose credibility when you are badly wrong.
For me though, all of those points aside, the most important thing is that this comes down to problems and solutions. The problem here is that you have a large piece of land that used to supply thousands of jobs and millions of dollars in tax revenues, and now it supplies no jobs and no tax revenue. It sits there and rots. That is a major problem. Now you may say that the zoning ordinance in front of City Council is a bad solution. I am not claiming that it is necessarily a great idea, because I haven't read up enough on it to say that. It is a solution though, one that some people think can do some good in fixing the problem. The critics of this solution are offering nothing at all. They are offering to leave the zoning of Martin Tower's property "as is." That is an idiotic solution. Unless they have a company ready to move into an old tower, with asbestos, right now, then they have no solution. They aren't offering an alternative plan for change. They are simply shilling for a fantasy past that isn't coming back. This is as moronic as hoping that Ingersoll-Rand in Phillipsburg will be filled with industrial jobs again, or that Bethlehem Steel will rise from the grave to come back to South Bethlehem. If they aren't going to put forward a constructive plan, and their track record of opposing development isn't good, then just give them their worst nightmare and detonate Martin Tower and put all retail on the grounds. Of course that's a moronically simpleton idea from me, but frankly it's a lot more thought than the critics seem to be putting into what to do with the land.

10 comments:

  1. I seemed to miss the legitimate idea supposedly expressed here. Actually, the legitimate idea is the same as it's been for the past 9 years: fix the asbestos, which has to be fixed no matter what is the fate of the building: and then there would be interest for tenants to occupy the existing historic structure. Martin Tower should have been generating tax revenue for the past decade
    had this been done.

    ReplyDelete
    Replies
    1. Granted, the asbestos issue has been put to bed. But you're forgetting the other costs to rehab and reuse the building: installation of sprinklers for fire suppression and replacement of the 11 existing elevators, to name just two items. This work can't be ignored in the calculations. Naturally these upgrades won't be needed if the building is torn down; instead there will be other costs such as demolition and site preparation. But right now, based on the figures made available to the city, the cost of demolition would be less expensive than the cost of reviving the tower for office or residential use.

      Initially I thought it would be nice to rehab the tower so it would remain part of the Bethlehem landscape. But after several months of studying the issue, and looking at both sides of the matter, I realized the economics does not favor the continued existence of the tower.

      Delete
    2. What about the costs to replace history and an inherent interest this property can generate based on that legacy? Don't forget, there's retail property right down the street which is suffering from stagnation: Westgate Mall. That property has even more appeal of being conveniently located between two highway exits, yet cannot get the tenants it desires.

      Delete
  2. If it was that simple, the building would be occupied. The reason the asbestos has not been removed is because there is no one interested in moving into the building. This building is simply behind the times and not really ideal. Why would anyone want to pay the price of fixing a building that is old when they can build a new one? As for calling the building "historic," I guess it does represent the past, but not in a good way anymore.

    ReplyDelete
  3. The majority partner in the Martin Tower property is Norton Herrick, chairman of The Herrick Company. His company is said to be one of the nation's leading real estate investment firms; he has purchased, acquired and developed $5 billion in property (everything from office buildings, to residential complexes, to commercial structures to shopping centers). He even dabbles in electric power generation, movie theaters and Broadway shows (for example, the financially successful production of the musical comedy "Hairspray").

    From what I gather from Bernie O'Hare's blog and City Hall, the total cost of renovating and reusing Martin Tower is estimated at $12 million (based on 2008 dollars). The cost of demolishing and redevelopment the site is $10.7 million, of which the state would reimburse the developer $2.4 million in the form of state tax incentives. So the net costs are approximately $8.4 million for demotion and redevelopment versus $12 million for renovation and possible reuse. Which plan makes financial sense?

    Now keep in mind, Mr. Herrick is no country bumpkin. His website (theherrickcompany.com) boasts that he can identify investments and close the deals within 45 days on average. In 2013, for instance, in a single set of transactions, he invested $650 million to buy 1 million square feet in AT&T's four-building campus in Monmouth County, N.J.; a cancer support center in New Haven; 19 CVS Caremark stores; 38 Motel 6 properties; 23 retail bank branches; a corporate headquarters and 27 retail/distribution centers, according to GlobeSt.com. In 2014, he sold a$10.5 million oceanfront condo development in Florida, taking a net profit of $4 million. In June of this year, Herrick closed on 24 Walgreens pharmacies valued at $92 million.

    Can there be any doubt that if Herrick was interested in saving Martin Tower, he would have found a national or regional corporate headquarters for the building? I would assume that Herrick is much better connected in the high-end business national community than anyone in Bethlehem, including the advocates of saving Martin Tower. And Martin Tower has not escaped the attention of Herrick, or at least his top managers. Every once in awhile, the company's website will republish a story from The Morning Call about the status of the project.

    The more I delve into the situation, the sadder I become of those who think they have the ability to force the developer to retain the tower. They won't win. They will use their (limited) political power locally. They will threaten lawsuits. They may even run to the state for succor. It looks increasingly, though, that this is a done deal.

    ReplyDelete
  4. Great point, Frank. It's not like they haven't been trying to find a taker for the building. If it was so easily done, they'd do it. It's not unlike the principle of the old strip mall, that businesses would rather build a new strip mall than move into a dying, old one. It's not easy to get someone to take an old tower off of your hands. Even if there's a good argument for it, they won't do it sometimes.

    ReplyDelete
  5. Fix the asbestos, tenants will come. Don't fix the asbestos, they'll stay away. Simple. It's the developer's fault that tax revenues were lost on this property. They should be held accountable, not rewarded with further tax incentives to demolish a historic structure that many local residents pride in.

    "Martin Tower: Generations Removed":

    For most every event,
    an invitation is sent --
    a calling card indicating an occurrence.
    Bethlehem P.A. -- the host of many events --
    for the past 45 years held such a testament:
    A cruciformed 21-floor skyscraper
    indicating the daily whereabouts
    of a city of significance
    and historic importance.
    The iconic steel tower --
    a distinctive chapter of the city's registry --
    has been a shining beacon, far and wide,
    to its citizen's ancestral pride,
    sweat and pageantry.
    Yet they may be denied of such a trust.
    They're to be laid waste by a development
    of short-sighted city and property planners
    using little creativity nor intelligence:
    determined to implode such a heritage into dust.
    These are whom blame the structure,
    perhaps,
    for not maintaining itself
    nor fixing its flaws
    and then wonder why,
    year after year
    it remains vacant,
    and investments are stalled.
    Tax incentives were given
    that are now misplaced.
    It wasn't arrogance that built this tower
    but hard work and dedication
    currently being disrespected in disgrace.
    The same kind of judgment
    that brought down the titan "Bethlehem Steel,"
    it's being duplicated today
    by those whom mirror that executive zeal.
    A city undermining its own heyday --
    premeditating its own downfall
    by ignoring the big picture
    in closing a bad "done deal."

    ReplyDelete
  6. "Which plan makes financial sense?"

    It would cost about 7 million to demolish the building upon fixing the asbestos (which will have to be done regardless). So that leaves 1.5 million according to your figures. if it only takes 1.5 to redevelop the site, I have to seriously question what kind of redevelopment they have in mind.

    ReplyDelete
  7. On what grounds do you say they would fill the building if they removed the asbestos? If it were that easy, they'd have done it. There is no incentive to not. If the asbestos has to come out no matter what, and that's all they'd need to do to bring in tenants, it would make no sense to have not done this 15 years ago. As for the math, it's $3.7 million of development by his math, with a reimbursement that brings it down to $1.4 million in cost.

    ReplyDelete
  8. Even if it were 5 million to redevelop, which would be the equal of what it would be to renovate it supposedly, I would have to question the redevelopment they have in mind. Five million is roughly the same amount as 5 decent mortgages on private property. What kind of re-use would that be on a property argued as prime real estate based on its location? I would call that a mis-use of tax incentives. If it's retail we're talking about, proper usage would have to be something _far_ more promising than what Westgate Mall already has to offer, which is similarly located, but not very resourceful. 5 mil doesn't suffice. As for your first question, the answer is a common term: negligence. Absentee landlords simply waiting for a more and more tax incentives to cut a raw deal. I believe these developers should be held accountable for the money their procrastination has cost the city and state. Meanwhile, Martin Tower has a legacy and an inherent attraction that would prove profitable in the right hands..

    ReplyDelete