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What raid? Developers say all systems go in Allentown Reading businessman sees potential negative impact on its recovery

Officials in Allentown say a recent FBI raid of Allentown City Hall should not slow the dramatic economic development that is occurring in its downtown.

Officials in Allentown say a recent FBI raid of Allentown City Hall should not slow the dramatic economic development that is occurring in its downtown.

But it could be a different scenario in Reading, where an FBI raid of City Hall could hurt a nascent recovery in a downtown that does not have the enticing tax incentives enjoyed by Allentown.

Regardless, an ongoing federal probe centered on construction contracts issued by municipal officials in the two cities is heating up. There is speculation that the FBI is looking into a potential connection between the awarding of city contracts and political contributions – and people are watching.

“The investigation is a complete disaster,” long-time Reading developer Jack Gulati said. “Obviously, it’s going to affect the future development.”

Yet in Allentown, the probe apparently has not hampered what so far has been more than $1 billion in new and planned development in Allentown’s Neighborhood Improvement Zone special taxing district, developers and officials said.

“The NIZ has helped turn Allentown around and will continue to do so,” said Allentown Mayor Ed Pawlowski in a statement. “Interest in building in our city is as strong as ever, and our downtown and waterfront will continue the impressive growth and development it has seen over the past year.”

The financial mechanism of the NIZ is not going away, said Jennifer Mann, an Allentown business consultant and former state representative.

“The opportunity that exists is not going away and that’s what’s driving the growth,” Mann said. “I don’t see this as having a significantly adverse result as far as stalling or inhibiting the growth that we’ve been seeing.”

In the end, companies decide where the best opportunities lie, she said.

Sy Traub, chairman of the Allentown Neighborhood Improvement Zone Development Authority, said he does not know what the investigation is about but that no one from ANIZDA has been contacted by the FBI.

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.

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