National News

Allentown bets big to shed its former image

Marketplace - American Public Media - Thu, 2014-09-11 13:02

Downtown Allentown, Pennsylvania, was once home to the most popular department store in the nation.

“Hess’s here did $190 million worth of retail sales in 1970,” says the city’s mayor Ed Pawlowski. “Think about that. They were the highest grossing retailer in the country, and they were here in Allentown. We were the major retail hub for the entire region.”

A city's troubled past

There’s a good chance the first thing that pops into your head when you think about Allentown is the song Billy Joel wrote about it. It’s a song about the coal and steel industries drying up and the city bleeding out.

But most folks in Allentown will tell you that song isn’t even about their city. It’s about neighboring Bethlehem, where there was a massive steel mill. If an autopsy was performed on Allentown, globalization and deindustrialization would just be footnotes.

The real cause of death would be the mall.

“When the malls got built, it sucked everything out like a giant vacuum,” Mayor Pawlowski says. Retail left downtown and people moved to the suburbs in hoards. “This city was like any other Rust Belt city in the Northeast and Midwest. Our economy was in the tank, we weren’t seeing growth and we weren’t seeing development. In fact, we would probably end up as the next Detroit, in bankruptcy.”

But in a span of only five years, that has all changed, the mayor says.

“We went from a multimillion-dollar deficit to a multimillion-dollar surplus. We’re seeing 4,000 new jobs come into the urban core and a billion dollars of new development," he said. "We’re now the fastest growing city in the commonwealth of Pennsylvania, and we haven’t raised property taxes in nine years.”

Allentown’s story of revitalization starts in 2008, when the gates of a brand new $50 million baseball stadium opened. Despite the city’s financial struggles and decades-long economic decline, Allentown has remained the third largest city in Pennsylvania, and because it’s less than 90 miles from the major media markets of Philadelphia and New York, Allentown city officials were able to lure in the Phillies minor league baseball team with some financial incentives.

Lee Butz is the president of Alvin H. Butz, Inc., a construction company named after his grandfather. The company built Coca-Cola Park, home of the team now named the Lehigh Valley IronPigs. The Butz family operated out of Allentown for generations, but when downtown drained, they left too.

“In 1972 we moved from Allentown to the suburbs,” Butz says. “At that time, it seemed like not that important of a move. It was convenient and closer to our homes. But the problem was, almost everyone was moving out of the center city and in a couple of decades it became so severe that many people thought Allentown would never survive.”

But when the city got the IronPigs, Butz says there was a shift in mentality. Suddenly a town that had gotten used to losing felt what it was like to win. “There were a lot of people who said the Lehigh Valley will never support minor league baseball,” Butz says. “Not only did the people support it, it has been the best attended minor league ballpark in the country for several years.”

Butz says the success of the IronPigs proved that Allentown could be a viable market, and it drew him back to downtown. Just after the stadium went up, his company built a new office in the city and moved in.

“We came back because the community has been so good to us. We just felt, what’s the best way we can pay the community back? Let’s go to downtown Allentown and see if it makes a difference, see whether a lot of people will follow us downtown.”

The first several years were rough. “We thought maybe we’d made a terrible mistake,” Butz says. “We occupied two floors of our six story building and we hardly had any other tenants. We thought, oh, gosh, we can’t make this work. But then along came the NIZ. It changed everything.”

The turning point

The NIZ is the whimsical shorthand folks in Allentown use for a plan called the Neighborhood Improvement Zone. The plan is the brainchild of Pennsylvania state senator Pat Browne. It gives developers who chose to build in downtown Allentown a special incentive.  

“Any taxes they generate as a result of their operations in Allentown can be used by the developer to offset the costs of that investment,” Browne says.

The general concept of using state tax incentives and incremental financing is not new. Browne says the American railroads were built on the model back in the 1860s.

Construction workers put the finishing touches on the entrance way of the PPL Center in preparation for the arena’s first event, a sold out Eagles concert.

Tommy Andres/Marketplace

What makes the NIZ unique is the word "any." “We’ve never been able to pull together an incentive that uses the entire state tax portfolio,” Browne says. 

Here’s how it works: If a building is built in the NIZ, the developer can get back the sales tax on any purchase made in that building for 30 years. That developer can also collect state income tax from any employee who works in that building. Even the corporate tax on businesses can be tapped. The state and city oversee the distribution, and if the kickbacks exceed what the developer spent on the building, the rest of the money goes to the state.

The NIZ went into effect in 2012, and swept up around $14 million for developers that first year.

J.B. Reilly is one of those developers. He grew up in Allentown, then made his fortune in the suburban sprawl that led to Allentown’s demise. Now, he has come back to invest in downtown. “Not only did we see a financial opportunity,” he says, “We saw a community development opportunity.”

When it was commissioned for $50 million, Coca-Cola Park felt like a risky bet. But Reilly has raised the stakes immensely, putting down nearly a billion dollars on another sport: hockey. Reilly’s company, The City Center Management Company, is building the new home of the Philadelphia Flyers' minor league team, the Phantoms. His hope is that it will become the heart of a new city.

“There’s a million square feet of development in the arena block between the hotel, the office retail, the arena itself and around 900 parking spaces,” Reilly says.

Reilly says Coca-Cola Park may have helped the city’s outlook and image, but it didn’t do much to spur growth. “It ended up being built on the fringes of Allentown and really didn’t have a benefit to downtown.” Reilly is confident the new PPL Center hockey arena downtown will be different because it’s more than just an arena. The stadium is encapsulated by the new offices of the region’s largest employer, the Lehigh Valley Health Network. It also houses a membership gym and a brand new Marriott Renaissance hotel.

“We really had to approach this differently,” Reilly says. “We had to look at this as a kind of master-planned opportunity to redevelop an urban area and really started thinking about this as creating a place.”

The NIZ allows Reilly to charge cheaper rent, which has been attractive to prospective tenants. Reilly’s office is across the street in a new building called Two City Center, which is also the new headquarters of National Penn Bank, the first bank to call Allentown home in four decades. A new upscale restaurant called The Hamilton — one that never could have survived in the area five years ago — opened on the ground floor in July.

“There will be 3,000 more people working here [in September] than there were a year ago,” Reilly says. “And for a city like Allentown, that’s just extraordinary. Some may say it’s an expensive project, and there’s a lot of state subsidy in it. And there is, but what’s it worth to turn around the third largest city in the state of Pennsylvania?”

Still a tough road

In the shadows of all that new development, just four blocks up 7th Street, is the neighborhood where Julio Guridy grew up. Guridy was born in the Dominican Republic and was among the first of several waves of immigrants to move to Allentown almost four decades ago.

Row houses on 7th Street in downtown Allentown are now mostly home to first and second generation immigrants. At the end of the street is one of The NIZ’s new buildings.

Tommy Andres/Marketplace

Allentown is now nearly 50 percent Hispanic and Latino. Most of those residents are from Puerto Rico or the Dominican Republic, and most moved from New York and New Jersey, not because of job prospects, but to escape rising costs of living.

"The big influx came about ten years ago,”Guridy says. “It's still a fairly new community. Many of them transferred from some other place with a Section 8 voucher. Some of them transferred with a welfare check."

Allentown’s population never stopped growing. As suburban sprawl drew the locals away, immigrants moved into downtown. Many are first generation and don’t speak much English. The result is a poverty rate in Allentown that is nearly ten times the national average.

So how will the NIZ help this burgeoning portion of the city?

“That’s the multimillion-dollar question,” Guridy says.

The residents on Guridy’s old street have all seen the new development and most have heard about the NIZ. And most believe it will bring in more people and more foot traffic. Zack Alali is from Syria and moved to Allentown from New York in the wake of September 11. He says the city knows what it's doing when it comes to big business.

“You think they’re going to spend $200 million on nothing? They’re not stupid,” he says.

But Alali also believes the city is ignoring small business owners in favor of the big developers, and says the feeling that he is an underdog is palpable.

“I applied for a loading zone in front of my shop. It took them three years to approve it,” he says. “The arena people changed the collection of the trash for the whole city in one week. So that tells you everything.”

Edis Farmin moved to Allentown from New York a decade ago. She owns a building and runs a salon in it called Dominican Beauty, just up the road from Alali’s store. She says the development that’s going on at the end of her street is for other people, not for her. She’s also upset because today she got a letter saying her taxes are going up. They aren’t city taxes — they’re state and county taxes — but she sees the new development and can’t help but link the two.

“That’s not fair,” she says. “They want Hispanic people to go back to New York. That’s all they want.”

Guridy says he’s not surprised at the mixed response from the changing neighborhood. “I think there has to be an opportunity for all,” he says. “And I think that opportunity is open. I think the issue is, are we as a Hispanic community and a small business community prepared to take on those projects? It’s going to be difficult at the beginning. It’s not impossible.”

Mayor Pawlowski says his city will never be able to build away all of its problems, but he’s happy with the city’s success so far. “Before, we were dealing with not being able to get anyone to invest in the city of Allentown,” he says. “It was a place where no one wanted to be. Now we’re dealing with the issue of maybe we’re gentrifying our community too fast. I’d rather have that problem. That’s a problem I can deal with and we can address.”

The mayor says that because of the NIZ, his city has pushed forward 20 years in two. “For years, I was like Sisyphus, just pushing that boulder up the hill. And every time we seemed to be getting to the top, it would roll back down. I think the boulder is now over the top of the hill.”

Allentown as a trend-setter?

It's too early to gauge success in Allentown. The city is only two years into a 30-year plan. But whether six square blocks of development can ripple through a city of 18 square miles doesn't seem to matter to Allentown's neighbors. The cities of Lancaster and Bethlehem each have their own state-funded development plans in the works. They call theirs "The City Revitalization & Improvement Zone," or CRIZ. 

If all goes according to plan, Allentown’s change in tune will debut on Sept. 12, when The Eagles open up the city’s brand new hockey arena with a sold-out concert. Sen. Pat Browne says he’s got tickets, but he’s more interested in the show outside.

“Leading up to the event, I’m not going to spend my time in the arena,” Browne says. “I’m going to spend my time outside looking at the waves of people coming downtown and seeing something I haven’t seen in 30 years. And it’s going to feel real good.”

FDA Approves New Diet Pill That's Made Of Old Medicines

NPR News - Thu, 2014-09-11 13:01

Contrave will be available in pharmacies this fall. But the companies working on the drug's marketing won't say how much it will cost.

» E-Mail This

Susan Rice: Islamic State Fight Will Not Be 'Iraq War Redux'

NPR News - Thu, 2014-09-11 13:00

In an interview with NPR, Rice said the U.S. will not be drawn into a ground war in Iraq and Syria, even if local forces are insufficient at containing the Sunni militants.

» E-Mail This

Richard Kiel, Actor Who Played Jaws In Bond Films, Dies At 74

NPR News - Thu, 2014-09-11 12:44

Kiel delighted moviegoers with his quiet menace and his metal teeth in the role of Jaws, the Bond villain henchman who not only survived his encounters with 007, but also lived happily ever after.

» E-Mail This

Can The U.S. Military Turn The Tide In The Ebola Outbreak?

NPR News - Thu, 2014-09-11 12:09

Some say our military has a big role to play in bringing Ebola under control. But sending in troops is trickier than it sounds.

» E-Mail This

Rare Virus Has Sickened Hundreds More Children, Hospitals Say

NPR News - Thu, 2014-09-11 12:03

The rare virus is spreading fast, and doctors don't have an instant test to find out who has it. So parents should be ready to seek help quickly if a child has a cold that's rapidly getting worse.

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Obama's Plan: The Pros And Cons

NPR News - Thu, 2014-09-11 09:48

The president has opted for an open-ended air campaign to fight the Islamic State. A look at what it will take to make the plan work and the risks that could cause it to fail.

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Some Things You Can Do In Your Sleep, Literally

NPR News - Thu, 2014-09-11 09:32

For those who think there are not enough hours in the day, researchers may have just offered you a solution. The brain can continue tasks even while asleep, a study finds. Texting not included, alas.

» E-Mail This

Suicide Is A Big Problem Where You'd Least Expect It

NPR News - Thu, 2014-09-11 09:20

The conventional thinking is that suicide is a problem in high-income countries. But a new WHO report says that three-fourths of suicide deaths are in the low- and middle-income world.

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Boehner: House GOP 'Ready To Work With The President'

NPR News - Thu, 2014-09-11 08:55

The House speaker said Congress "ought to give the president what he's asking for" but also expressed skepticism, saying the White House plan to defeat Islamic State militants doesn't go far enough.

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Missouri Lawmakers Override Vetoes On Abortion, Guns

NPR News - Thu, 2014-09-11 08:53

The state is set to expand gun rights and establish a 72-hour waiting period for women seeking abortions after lawmakers overruled vetoes by Gov. Jay Nixon.

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Why The U.S. Chills Its Eggs And Most Of The World Doesn't

NPR News - Thu, 2014-09-11 08:31

In many countries, eggs aren't refrigerated and they're still considered safe to eat. But in the U.S., we have to chill them, because we've washed away the cuticle that protects them from bacteria.

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Detroit has the most expensive car insurance in the U.S.

Marketplace - American Public Media - Thu, 2014-09-11 08:10

Drivers in Detroit, Michigan, pay the highest auto insurance rates in the country, with annual premiums costing 165 percent more than the national average, according to a new study by InsuranceQuotes.com.

The study claims Michigan's unique regulations on how insurers cover medical expenses are the cause for the state's higher rates.

From the study:

The reason for this is quite simple, says Lori Conarton, communications director for the Insurance Institute of Michigan.

According to Conarton, Michigan is a no-fault auto insurance state, which means each insurance company compensates its own policyholders for the cost of injuries regardless of who's at fault in the accident. This benefit is known as personal injury protection (PIP).

What's wholly unique about Michigan, however, is that state law provides unlimited lifetime coverage for medical expenses resulting from auto accidents, making insurance very expensive.

"No other state in the country provides lifetime medical benefits, which means the cost of medical treatment plays a big role in what people pay for auto insurance in Michigan," Conarton says.

Other factors that could contribute to Detroit's higher premiums include the large number of uninsured drivers in the region, with 20 percent of drivers lacking car insurance in the state of Michigan, and 60 percent of drivers in Detroit driving without insurance, according to estimates from a different study earlier this year by Quadrant Information Services.

The study also looked at car insurance rates that were significantly higher or lower than the national average in other metropolitan regions throughout the country, including New York, Miami and Los Angeles, which all had higher-than-average premiums.

On the opposite end of the spectrum, Charlotte, North Carolina, and Cleveland, Ohio, have the lowest insurance premiums in the country, compared to the national average.

Data table courtesy of InsuranceQuotes.com.

Fijian Peacekeepers Released By Syrian Nusra Front Rebels

NPR News - Thu, 2014-09-11 07:44

The 45 U.N. troops were taken hostage last month on the Syrian-controlled side of the Golan Heights.

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The numbers for September 11, 2014

Marketplace - American Public Media - Thu, 2014-09-11 07:31

Per tradition, the 2,983 names of the people who died in the terrorist attacks on September 11, 2001, were read at the World Trade Center site Thursday morning. The 9/11 Museum has attracted nearly a million visitors since opening in May. 

Here are some other stories we're reading and some numbers we're watching Thursday:

$363.8 million

That's RadioShack's revenue for its second quarter, which ended last month — a 22 percent drop from a year ago, as The New York Times reported. The troubled electronics retailer has tried rebranding and closing stores, but most analysts say it's headed for bankruptcy nonetheless.

6

The number of college and university police departments that have received mine-resistant vehicles from the Department of Defense since 1998, according to data published by the Chronicle of Higher Education. That total could still grow: The Chronicle's data isn't complete; they're still waiting on information from 11 states and the District of Columbia.

800 million

The estimated number of iTunes accounts that "purchased" the new U2 album, "Songs of Innocence," as part of an Apple promotion announced Tuesday. Many users were not pleased at the record's sudden appearance on their phones and computers. For comparison: Business Insider pegs U2's total album sales before this week at a measly 150 million.

$62 million

That's how much cash Los Angeles police seized during a raid in the city's Fashion District on Wednesday. The "fast fashion" industry provides an easy route for drug cartels to launder money, Quartz reported, and L.A. is a hot spot.

WATCH: Carney, McCain Spar On CNN Over ISIS Strategy

NPR News - Thu, 2014-09-11 06:50

The former White House press secretary went toe to toe with the Republican senator after President Obama's address to the nation about the Islamic State.

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A Happy Marriage, A Terrible Secret, A Healthy Baby

NPR News - Thu, 2014-09-11 06:42

They were married in South Africa. The next day, he told his bride he was HIV positive. Soon after, she tested positive. And she thought nothing in her life would ever go right.

» E-Mail This

UNESCO Director Concerned About New School Year In Iraq

NPR News - Thu, 2014-09-11 06:38

Irina Bokova, director-general of UNESCO in Paris, calls for international help to protect Iraq's schoolchildren as they return to school.

» E-Mail This

Ozone Levels Bounce Back, Showing First Increase In 35 Years

NPR News - Thu, 2014-09-11 06:37

NASA says that a ban on CFCs enacted in the 1980s has contributed to a 4 percent rebound since 2000 in atmospheric ozone in mid-northern latitudes.

» E-Mail This

FDA approves new weight-loss drug

Marketplace - American Public Media - Thu, 2014-09-11 06:00

The Food and Drug Administration has approved a new weight-loss drug therapy. The drug, Contrave, is a combination of drugs used to treat depression (bupropion) and addiction (naltrexone). 

It’s approved for adults with a body mass index of 30 or higher (considered the threshold for obesity) and adults who are overweight (BMI of 27) but who also have a weight-related health condition.

In one trial cited by the FDA, 42 percent of patients treated with Contrave lost at least 5 percent of their body weight, while 17 percent of patients treated with a placebo did.

It has taken two attempts, four years, and several delays to get Contrave approved. In 2011, an FDA panel voted to approve the drug, but the agency declined and asked Orexigen, the drug’s maker, to pursue longer-term cardiovascular studies. When those studies were completed, the agency delayed approval again as it reviewed labeling and marketing requirements. 

“I don’t know what’s tougher, losing weight or getting an anti-obesity drug passed by the FDA,” says Robert Goldberg with the Center for Medicine in the Public Interest. Goldberg says obesity is linked to the central nervous system, and so are the drugs that treat it, so the FDA is extra-cautious. “The FDA is also worried that people will take these medicines and use them just to get an eight pack after their insanity workout,” when they are otherwise healthy. “Does it have a different bar? Absolutely.”

And yet, despite concerns about widespread use or abuse, sales of existing drugs on the market have proven disappointing. 

“The weight-loss drugs are not completely accepted as standard therapy, even for patients who are obese,” says Dan Mendelson, CEO of Avalere Health. He says getting doctors and patients comfortable with these drugs has proven difficult.

Another challenge for any weight-loss drug is how and whether insurance companies cover it. 

“If a drug is approved and not widely covered, it’s not gonna get adopted,” says Mendelson.

There are at least three more weight-loss drugs under development. 

 

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