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$30 million Bethlehem project targets tech companies

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The Tau Building will offer space for fledgling tech companies.
The Tau Building will offer space for fledgling tech companies.

From the ruins of the Bethlehem Steel, a new technology hub will rise – quite literally.

Dubbed Tau, the new post-incubator workspace will be housed in a former Bethlehem Steel building that once contained the company’s mainframe – a computer that took up an entire room.

“These are the jobs of the 21st century. The fact that they’re happening on Bethlehem’s South Side, it’s a great story,” Bethlehem Mayor John Callahan said.

The Tau Building will occupy the five-story, 120,000-square-foot Bethlehem Steel General Office Building East Annex at the corner of Founders Way and E. Third Street.

The $30 million project will be done in phases, said Callahan. Work on the shell will be first, followed by interior workspace. As the need arises – and it is expected to – more workspace can be added.

“The nice part of the plan is that it’s scalable,” said Callahan.

Funding for the project will be a combination of federal and state economic development dollars.

Plans to renovate the building were devised when city officials saw just how quickly Pi, another post-incubation space in the Cantelmi Building, also on Bethlehem’s South Side, filled up with interested tech companies.

“It’s full with no marketing. We know [start-up tech companies] are out there and that there’s a need. It’s up to us to accommodate them,” said Callahan.

The Pi building offers 9,000 square feet of workspace to tech companies, many of which got their start with Ben Franklin Technology Partners of Northeastern Pennsylvania in Bethlehem.

Next to Lehigh University’s Mountaintop campus, Ben Franklin offers start-up companies a space to work and grow. Once they’ve spent time at Ben Franklin, the companies go onto a post-incubation center.

“It’s like going from elementary school to middle school,” Callahan said.

Getting another post incubation space is great news to Laura Eppler, director of marketing for Ben Franklin.

“The city is demonstrating interest in retaining jobs and creating sustainable, highly-paid jobs, which is our whole mission. We think this is definitely positive,” said Eppler.

ArtsQuest officials, who run the SteelStacks next door to Tau, are excited, too.

“This is another step in the revitalization of Bethlehem, and it’s being known for innovation and creativity,” said Mark Demko, associate director of editorial services at ArtsQuest.

Tau will not be offered solely to post-incubator companies, either. Eventually, Callahan said, he would like to see a situation where companies that are further developed would also inhabit the new building.

Companies in an incubator typically pay less rent than do older, more stable companies, so a good mix could bring more revenue, Callahan said.

The Tau Building is within the South Side’s Keystone Innovation Zone. Locating within the zone gives new companies (up to 8 years old) the opportunity to sell up to $100,000 in tax credits to other companies.

The amount of the credit is based on a formula that incorporates the company’s revenue. The transaction typically benefits start-up companies, said Steve Melnick, who works with the Southside Bethlehem Keystone Innovation Zone, administered by the Lehigh Valley Economic Development Corporation.

“Usually a larger corporation who has tax liability will buy the credits at a discount,” Melnick said.

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