The next phase of major development in Allentown is about to begin.
The Allentown Neighborhood Improvement Zone Development Authority has approved the application of The Waterfront Development Co. to obtain $92 million in Neighborhood Improvement Zone financing for the first part of The Waterfront, a $300 million mixed-use development that includes new office buildings and upscale apartments along the Lehigh River.
“This was a massive leap forward for the project,” Zachary Jaindl said this afternoon. Jaindl is principal and chief operations officer for Jaindl Properties, one of several partners in the project. Dunn Twiggar Co. LLC and Michael Dunn Co. Ltd. are the other partners.
“This is going to be the catalyst for the start of our entire project,” Jaindl said.
The first phase of the project includes construction of two office buildings, 615 Waterfront Drive and 645 Waterfront Drive, one apartment complex at 630 Waterfront Drive, the first of two parking garages, the start of the project’s signature River Walk and infrastructure improvements, Jaindl said.
The company will begin infrastructure work July 1, he said.
The approval from ANIZDA allows the company to approach potential tenants and offer the lower rental rates that would come from a NIZ project, Jaindl said. Rates for new Class-A office space could be between $10 to $12 per square foot and possibly lower, depending on the amount of tax revenue generated.
The property, in the Neighborhood Improvement Zone, brings tax incentives that could be a powerful draw for tenants. Under the NIZ, tax revenues flow back to developers and help to subsidize monthly mortgage payments. The developers, in turn, can then offer low monthly rents to businesses.
The NIZ was the catalyst behind what has turned out to be $1 billion in new development – including the new PPL Center and City Center office buildings – in downtown Allentown.
“We went out and sought financing from banks, and ANIZDA takes the loans, and the incentives we get from the NIZ we then pass onto the tenants,” Jaindl said.
In the past couple of months, The Waterfront company put together funding from a consortium of banks and prepared the ground for the start of construction, Sy Traub, chairman of the ANIZDA board, said this afternoon. The ANIZDA then takes out the loan on the $92 million.
The 26-acre site, once home to the Lehigh Structural Steel Co., sat underutilized for years.
“Industry developed all along that river, but that industry has faded and was left to fall into decay,” Traub said. “This is now the real resurgence of that area.”
Traub compared the site to one that could become similar to Baltimore’s inner harbor which, once redeveloped, led to a resurgence of that city.
“Other than the downtown development, I think the development along the waterfront is the most significant part of the redevelopment of Allentown,” Traub said.