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Allentown authority approves $53M apartment project plans, Waterfront loan financing

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Allentown City Center Investment Corp. earned approval from the Allentown Neighborhood Improvement Zone Development Authority to add 215 apartment units to a $53 million downtown project.
Allentown City Center Investment Corp. earned approval from the Allentown Neighborhood Improvement Zone Development Authority to add 215 apartment units to a $53 million downtown project. - (Photo / )

Last week, the group that oversees and manages a massive tax incentive zone in downtown Allentown gave approvals that help accelerate development of two major projects.

Allentown City Center Investment Corp. earned approval on Nov. 7 from the Allentown Neighborhood Improvement Zone Development Authority to add 215 apartment units to a $53 million downtown project. In addition, the authority approved revised financing terms and a loan extension for developers Mark and Zachary Jaindl of The Waterfront Development Co. for The Waterfront, a massive mixed-use project under construction along the Lehigh River.

Robert DiLorenzo, project manager for City Center Allentown, said City Center is modifying its previous plan, which called for a mix of apartments and an event space. The change replaces the event space with a a 215-unit apartment community.

This 215-unit project would be on the eastern portion of the block bordered by Hamilton, Seventh, Walnut and Eighth streets. The designers oriented the main entrance of the project toward the monument at Seventh Street, across from PPL Plaza.

The new plan calls for a seven-story project divided by an elevated glass walkway that connects two separate buildings.

“Both buildings will share amenities,” DiLorenzo said. They include a pool in a courtyard and space for outdoor games, grills and activities. The plan would add four levels of apartment units above the courtyard and pool, and a two-level parking deck below that with 230 spaces.

“One of the goals of this project was to maximize density,” DiLorenzo said.

Some units will have balconies and others will have large sliding glass doors that open to railings.

On the north side of the project, designers included a plan for a 6,000-square-foot-plaza, which would be publicly accessible and include a landscaped area with benches, he said.

Rents start at $1,200 for a one-bedroom and go up to $1,900 for more lavish units, he said.

City Center has not yet selected a contractor for the project, estimated to cost about $53 million and span 350,000 square feet, DiLorenzo said. The expected opening is summer 2020, he said.

JDavis Architects of Philadelphia is the architectural firm.

While City Center received approval from the authority, the company will next go before the Allentown Planning Commission on Nov. 13 for land development approval, DiLorenzo said.

At that point, City Center will reveal a new name for the project, which it previously called Five City Center Innovation Campus.

Once this residential project is complete, City Center will have 747 market-rate apartments in downtown Allentown, he said.

THE WATERFRONT

Meanwhile, developers Mark and Zachary Jaindl are moving forward on The Waterfront, a group of office and residential buildings on 26 acres of former industrial land along the Lehigh River.

Once complete, the project will have five office buildings, four apartment complexes, three parking decks, three surface lots, Waterfront Drive (a street with pull-in parking) two outdoor plazas and a half-mile River Walk.

Several years ago, The Waterfront Development Co. earned approval from the authority for $6,249,600 of NIZ financing to begin site-wide infrastructure improvements, said Zachary Jaindl, Waterfront’s chief operating officer. On Wednesday, the authority approved a modification of their loan and to extend it for 18 months, he said.

Steve Bamford, executive director of ANIZDA, said their original credit facility, or loan for construction, was originally $6,249,600, which they had substantially drawn down.

“They asked for a modification to once again increase the available amount as well as extend it [their loan] for 18 months because it was to expire Dec. 23,” Bamford said.

The modification restores the loan to its original balance, Jaindl said. “This modification gives us the runway to continue construction efforts on site while we finalize the master financing package.”

The adjustment to the loan will allow developers to install additional infrastructure, including the start of the project’s half-mile River Walk in addition to design and engineering costs as well as the preparation of future site pads, he said.

“This allows us to keep working until the tenant negotiations are finalized,” Jaindl said.

When the company bought the land, it was filled with dilapidated buildings and structures, abandoned gas storage tanks, excess scrap metal, and abandoned rail lines, he said.

Demolition and clearing of the site took full-time crews about 18 months, Jaindl said.

After installing underground utilities, streets, curbs and pads for the buildings in the first phase, the developers hired architects to design several new buildings.

Jaindl said he began pre-leasing on 645 Waterfront, a 125,000-square-foot-office building while the company started work on 560 Waterfront, a 206-unit apartment complex, and 545 Riverside, a parking garage with 765 spaces.

The project’s five Class A office towers will bring more than 2,800 new full-time employees to the new River District, while the multifamily residential portion will bring more than 750 new residents, Jaindl said.

The company began the year by pursuing the financing required to build a 206-unit apartment building and adjacent seven-story parking structure,” Jaindl said. “Then tenant interest in the office space exploded in spring.”

The developers began tenant negotiations in late spring, which are still continuing, he said.

Ultimately, Jaindl said this modification is a short-term solution until the developers either finalize tenant negotiations and bring the first office, residential and parking buildings out of the ground or reach a point where the developers split the project into two stages and secure separate financing for the apartments, parking garage and office.

Before starting construction on an office building, the developers would fill each building to a minimum of 50 percent, Jaindl said.

So far, here is a rundown of the status of the first three buildings according to Jaindl:

• 560 Waterfront (206-unit/6 story apartment complex): Construction documents are complete. Work has begun to prepare for vertical steel in the upcoming months.

• 545 Riverside (765-space/7 story parking garage): Construction documents are complete for the project alongside 560 Waterfront. Work on this garage will begin with six months left on the 560 Waterfront timeframe.

• 645 Waterfront (125,000 square foot/six-story office): This building is permit-ready. Leasing is underway.

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Brian Pedersen

Brian Pedersen

Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 4108. Follow him on Twitter @BrianLehigh and read his blog, “Can You Dig It,” at http://www.lvb.com/section/can-you-dig-it.

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