Did Taxpayers Wildly Overpay to Clear Way for a Hockey Arena?
- Posted on February 24, 2012 at 11:40pm by
Tiffany Gabbay
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Typically, when a city starts going about using eminent domain to seize private property, those property owners believe they’re being cheated.
Well, that’s not the case in Allentown, Pennsylvania, where questions are being raised over whether the city in fact paid too much for a strip of business buildings in the push to clear out space for the town’s new hockey arena.
Fox News reports that in order to proceed with the planned $160 million multi-purpose complex, the city paid $15 million to property owners in the zone. Oddly, some owners were offered even more than what they originally paid.
So how can Allentown afford to be so generous?
“Ultimately, the taxpayers are the ones that are going to foot the bill for what was paid to those existing property owners,” said Stephen Thode, a finance professor and real estate expert at Lehigh University.
Fox adds:
Thode said he couldn’t say for certain whether the city overpaid, but he noted the city hasn’t been forthcoming with the appraisals for the properties.
“If they didn’t overpay, they’d be more than happy to show the appraisals,” he told FoxNews.com.
WFMZ-TV reported that one business owner who paid $150,000 for his building five years ago received $852,000 for the building and relocation expenses.
Another who reportedly paid $400,000 received $747,000 from Allentown a year later to leave the block where the arena is to be built
That business owner, tax preparer Paula Paredes, confirmed to FoxNews.com that she was paid $650,000 for two properties and an additional $97,000 for relocation expenses.
In response, a city spokesman said Allentown paid “the appropriate amount” for the properties. Conveniently, he noted that the slated stadium was actually what made the prices in the area jump.
“This project and the Neighborhood Improvement Zone will be transformational for the city,” he said in an email.
Meanwhile, the city’s economic director also told WFMZ-TV that taxpayers are getting a good deal with the complex that is slated to open next year.
The Fox report continues:
The arena and entertainment complex are part of a special district aimed at revitalizing business in the city. Those who got money to move out of the zone — some of whom originally protested the plans — could end up reaping the benefits, picking up business from foot traffic once the arena opens.
Thode said the reason the city paid so much is probably because it wanted to “avoid litigation.”
“They didn’t want anybody saying, ‘no that’s not enough’,” he said. “Time is the enemy of any project like this.”
Though the City Council authorized the mayor of the city to use eminent domain powers to seize the properties, they ended up just striking deals with property owners — and avoiding court.
Thode astutely points out, however, whether an arena in a mid-sized city with a minor-league hockey franchise would reap the kind of results the city is hoping to achieve. He also noted that the complex is hardly akin to bringing in a major business like a pharmaceutical company or other serious employer.
“There is no tangible evidence that there’s going to be any net job growth because of this,” he said.
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Comments (62)
HKS
Posted on February 25, 2012 at 10:49amNow that would be a very old scamerooney, Check out the relationship between the property owners and city officials. Connections are usually involved in this game.
Report Post »smokeysmoke
Posted on February 25, 2012 at 10:56ami bet government officials were benifactors of these shady eminent domain deals… but who knows
Report Post »iWonderWhy
Posted on February 25, 2012 at 11:31amI would love to have the Blaze do a special report on one of the most politically corrupt areas in the nation. Allentown, Bethlehem, and Easton (ABE) while Easton isn’t as bad as the other two sister cities it is still considered part of the liberal machine.
Allentown has this debacle with the hockey arena, while Bethlehem has a Mayor who has illegally shifted money and gets a free pass all the time from his buddies in the government. All the while a number of non profits received about $50 million dollars in local, state, and federal grants.
Are they feeding the poor? Are they clothing the homeless?
NO!
They’re an entertainment complex that holds concerts and shows ind. films. Just one of their pieces of art cost upward of $400k, and the head of the “not for profit” pays himself a package worth $250k per year. But he donates to every liberal campaign, so he’s a team player and deserves to line his pockets with taxpayer dollars.
I really do wish The Blaze would do an indepth story on this area.
Report Post »BarackStalin
Posted on February 25, 2012 at 1:49pmThis is what happens when we allow the PLUTOCRATS and CORPORATIONS to rule over WE THE PEOPLE.
They win, we lose.
Report Post »Pigpen
Posted on February 25, 2012 at 3:02pmHKS posted: “Check out the relationship between the property owners and city officials.”
I agree. Where is the PRESS? Why aren’t they double checking on how that guy was able to BUY the property just a year before he sold it dear to the city? Was that just a friggin’ coincidence?
Where are all of the CHICAGO SCHOOL ECONOMISTS? Why aren‘t they DEMANDING to know why the friggin’ NHL or some other PRIVATE ENTERPRISE isn’t the one footing the bill for this POS? Why is the GOVERNMENT building health clubs and sports arenas?
RISE UP, my fellow crackers, RISE UP and TEAR DOWN these CRIMINALS who spoil the public coffers! RISE UP and TEAR DOWN these perverted, so-called “intellectuals” and their “public welfare” and assorted -isms! They seek to destroy YOU! They seek to destroy your FAMILIES! They seek to destroy your FAITH! Please, my fellow honkies, wake up, Rise Up, and SPEAK OUT!
Report Post »BarackStalin
Posted on February 25, 2012 at 4:06pmPigpen, you think the media works for the people?
haahahahahahaha
American media has become nothing more than Propaganda Machines. They work for the OLIGARCHY…
Why do you think our government is in such a hurry to censor the Internet? THE TRUTH is accidentally getting out.
Report Post »RayOne
Posted on February 26, 2012 at 12:04pmCounty records are the tracks to property transfers, when and to who. This can reveal something about election campaign contributions and legal settlements. Unless they have the power to seal the records, the truth should be visible.
Report Post »yougottabekidding
Posted on February 27, 2012 at 9:50amPigpen
Are you ready for this big suprise?
The local paper is owned by the Tribune!!!!!!
Report Post »Enough said?, surprising how many stories are missing or severly slanted!
Hollywood
Posted on February 27, 2012 at 3:14pmYou mean FOLLOW THE MONEY? Not a complete loss however, as there are beer,peanut,popcorn vendors etc, working for min. wage, for 4 hrs per game. YIKES!
Report Post »G-WHIZ
Posted on February 25, 2012 at 10:49amThis is all part of the progressive/communist/sharia adjenda to bakrupt our country by waaay over taxing an waaaaay overpaying for ALL things with TAXPAYER money. Every single person is paying the hidden HUGE tax of the FED-RESERV over inflating every cent even years before it is spent in the private sector. We donot even get to spend most of it because TheFedRsv GIVES it to many other counhtries including islamic-mostly and doomed-to-fail countries in the EU. Then OUR govt borrows and borrows and borrows[14T] and up sucking all dry for the “worldorder” ponsi-scheeme. If the whole productive world crashes GeorgieS. and friends will have all the gold but will not find annyone able to even electrify, pump water, protect their azz, deliver anything to them. They will die from trying to eat their furniture and gold.
Report Post »jungle J
Posted on February 25, 2012 at 10:33amonly the sane can understand the anchor that sports has become on the American society. Sports should be a diversion played on city street or a farmers field. It is a distraction from reality for the mentally ill.
Report Post »piper60
Posted on February 25, 2012 at 8:59amAllentown is where Detroit was when they first got progressives in power 60 years ago. Wait 10 years. The city will look even more like a bombed out slum than it does now. Coupled with the drop out rate down in Reading, a mere hours drive away, and the whole region will look like a 3rd world country.
Report Post »itsamadhouse
Posted on February 25, 2012 at 8:58amGuess where the Mayor of Allentown came from? Drum roll please…Chicago!
Report Post »Aussieoi
Posted on February 25, 2012 at 8:22amFox news details are wrong…wfmz-tv reported this before anyone. Channel 69 News knows what going on because they are in Allentown…fox only comes up from Philadelphia when they see in wfmz.
Report Post »MM055
Posted on February 25, 2012 at 8:16amThat area used to be a place where people lived…now a third world country: Where they hope people will visit for bread and circus…appropriately perhaps…a few blocks from the crime center…Then you can travel a few miles to work a one armed bandit while viewing the abandoned blast furnaces of Bethlehem steel…oh yeah, that’ll work…
Report Post »Angry Redneck
Posted on February 25, 2012 at 7:56amWe in Pittsburgh have three new sports arenas, we even put it up for a vote. We the people of western Pa. said NO! That wasn’t good enough, they did it anyway!
Report Post »Baddoggy
Posted on February 25, 2012 at 7:47amI lived in Houston when they buit the Baseball and football parks. The cost over runs were staggering. At least they did not use the unconstitutional emiment domain BS back then. But they built the baseball park downtown where the criminals hung out…STUPID!
Report Post »Tidewater_VA
Posted on February 25, 2012 at 6:49amThey are just spending money like big brother gov taught them. it’s easy with a bottomless checkbook! I tried to run my finances this way but couldn’t figure it out…..what did I do wrong
Report Post »Gonzo
Posted on February 25, 2012 at 5:54amI was thinking of Allentown last night when Bill O’reilly was arguing for government price fixing for oil. He used the steel industry as an example of how price fixing works. I wish like heck Charles had asked him how all that worked out for the steel industry and places like Allentown and Pittsburgh. There is no steel industry in America anymore Bill, maybe government price fixng (as well as the unions obviously) helped run the industry out of the country.
Report Post »Baddoggy
Posted on February 25, 2012 at 7:42amBill is a progressive douc he…He does not know what is going on. He is no more than a carnival barker at the Circus.
Report Post »itsamadhouse
Posted on February 25, 2012 at 8:54amBill may be an ok guy on social issues, but when it comes to the free market, he’s little more than an economic pygmy.
Report Post »mattmo79
Posted on February 25, 2012 at 9:26amBill’s point is has long as OPEC (which should be outlawed) controls the price of oil, a free market for oil doesn’t exist.
Report Post »iWonderWhy
Posted on February 25, 2012 at 11:22amThere is and never was any steel in Allentown. You‘re getting confused by Billy’s song. All of the steel was next door in Bethlehem, i.e. Bethlehem Steel Corporation which is no more.
The person who broke this is a local blogger named Bernie O’Hare, he’s been at this story like a dog on a bone and deserves a whole lot of credit!
http://lehighvalleyramblings.blogspot.com/
Report Post »mlcblog
Posted on February 25, 2012 at 5:47amSimilar thing going on over here with our beloved 49ers. Santa Clara stadium for them is strangely configured tier of tickets and taxes so high that regular people can no longer attend, and the price is still not fully paid.
Report Post »MediaMattersNotAnymore
Posted on February 25, 2012 at 5:13amI live in the Allentown area. This has been a classic case of payback, chronyism, deceit, special interests and political shenanigans. Special taxing zones so that surrounding communities that don’t want anything to do with it have to pay. It even has to be built with union labor paying scale wages. They tore down an entire city block to make room. Only a fool with a death wish goes downtown at night anymore. That won’t change. When this boondoggle dies in a couple years the rats and cockroaches will have made their money and scurried off back to their dark holes. We’ll be stuck with cleaning up the mess…again.
The mayor is a carpetbagger Democrat from Chicago. Need I say more?
Report Post »BehindBlueEyes
Posted on February 25, 2012 at 5:36am@MEDIAMATTERSNOTANYMORE
Report Post »I read the story and what you said about payback, chronyism, deceit, special interests and political shenanigans was just what came to mind. Unscrupulous politicians love these kinds of projects to line their pockets and cheat the taxpayers.
You have a insidious Chi-town politician running your city, unfortunately America has one for it’s President.
abbygirl1994
Posted on February 25, 2012 at 3:04amAnd when the countries economy finally fails and we are in a deep depression.. who will come to the arena?? Do people ever really think ahead. Mama always said.. “don’t count your chickens till they hatch”!
Report Post »Best7
Posted on February 25, 2012 at 2:26amI’m in favor of eminent domain if the government pays double the assessed value.
Report Post »Exiled
Posted on February 25, 2012 at 3:01amNot even then. I don’t want money. I want my property. You can offer me all the money in the world, and that doesn’t (or shouldn’t) take away my RIGHT to keep MY property.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 3:04amI agree with over paying in these cases.
I am against the use of eminent domain for projects that will directly make money for private businesses, and indirectly make money for local governments via taxes.
Eminent domain should be used for roadways, sidewalks, bridges, dams, levees, dikes, and other items that SUPPORT all individuals of a community. Malls and sports stadiums do not do this.
People always just think of monetary value of a property. There are other costs like:
- The Stress of moving. Tell me you like moving.
- The sentimental value of a location. Try fighting in court for added value because something means something to you. You will not receive added value to something.
- Location, Location, Location!!!
PERSONAL HOMES: People usually buy a property to live where they live for a particular reason, and cost is usually not the main factor for the choice of a particular property.
PRIVATE BUSINESS: A business that moves will lose business. You lose customers permanently and temporary because they will not travel to the new location and/or do not know where the business is now located. While the new location may offer new potential customers, most people even against what they may personally say, do not break from their normal routines to check out new businesses the first few times they see them. Thus a business WILL lose money in the short term if it is forced to move, and if it can’t afford a loss, it may go out of business.
Report Post »itsamadhouse
Posted on February 25, 2012 at 8:55amThe government NEVER pays. You the taxpayer pay. The government can only get it’s money through the expropriation of your money in the form of taxes, fees and other so called revenue raisers.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:03amI agree with over paying in these cases.
I am against the use of eminent domain for projects that will directly make money for private businesses, and indirectly make money for local governments via taxes.
Eminent domain should be used for roadways, sidewalks, bridges, dams, levees, dikes, and other items that SUPPORT all individuals of a community. Malls and sports stadiums do not do this.
People always just think of monetary value of a property. There are other costs like:
- The Stress of moving. Tell me you like moving.
- The sentimental value of a location. Try fighting in court for added value because something means something to you. You will not receive added value to something.
- Location, Location, Location!!!
PERSONAL HOMES: People usually buy a property to live where they live for a particular reason, and cost is usually not the main factor for the choice of a particular property.
PRIVATE BUSINESS: A business that moves will lose business. You lose customers permanently and temporary because they will not travel to the new location and/or do not know where the business is now located. While the new location may offer new potential customers, most people even against what they may personally say, do not break from their normal routines to check out new businesses the first few times they see them. Thus a business WILL lose money in the short term if it is forced to move, and if it can’t afford a loss, it may go out of business.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:18amOne thing to note; if the local community wants a project like this built, this is how it should be done.
If they do not want this project, then that is a different subject all together.
Report Post »Best7
Posted on February 25, 2012 at 2:28amI’m in favor of eminent domain if the government pays double the market value.
Report Post »Melika
Posted on February 25, 2012 at 9:50amYou are absolutely correct. I don’t feel sorry for the tax payers in Allentown, or any town that gets the shaft for these stupid sports arenas. These people voted the crooks in, they’ll keep voting the same crooks in after this, and when asked if they want a sports arena, they are usually shouting a big “YES!” regardless of the cost or inconvenience to others.
Report Post »Darmok and Jalad at Tanagra
Posted on February 25, 2012 at 1:30amAll they had to do was tell everyone there was Obama Bucks buried in there. It would have been cleared out in an hour.
Report Post »JQCitizen
Posted on February 25, 2012 at 12:53amI live near Allentown, and from what I‘ve heard the voters don’t want the arena. And that makes sense, doesn’t it? After all, it’s an Ice Hockey arena. What percentage of citizens play, or have anyone they know who plays Ice Hockey? And many who are paying the taxes to support this project do not have enough interest in, or cannot afford to attend events there.
All of these sports/entertainment projects are REDICULOUS projects to force taxpayers to pay for. If any industry or art form cannot attract enough attention and commitment from consumers to support a venue they could create a consortium of interested parties (sports teams, convention societies, arts societies, hotel associations, etc), to cover the costs together. Let the MARKET DEMAND decide whether projects go forward, and let THEM negotiate with land owners.
Report Post »MarkstoneUSA
Posted on February 25, 2012 at 12:48amGive it two years, then pull the financials of the sellers to see who got kick-backs….
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:19amWhy do you need kickbacks when you are overpaid and compensated?
Report Post »Dougral Supports Israel
Posted on February 25, 2012 at 12:26amThis is yet another reason to implement a small government model. I’m sure this project, like most other civic project receives a lot of its funding from the federal and state levels. This removes accountability and allows money to be spent without the project being properly thought out. If the city had to fund it all there would be less of these money-wasting projects.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:15amGovernment must take on some projects. While the free market is great, the government is there to build infrastructure.
Report Post »spikebu
Posted on February 25, 2012 at 4:18amMr Anderson…Explain how an unwanted sports arena is infrastructure. Heck, explain how a wanted sports arena is infrastructure. The kickbacks aren’t for the people who sold the properties. They’re for the ones who brokered the deal. Those guys will be pocketing billions long before the local economy will be getting sucked dry by this pig. Mr Anderson is appropriate…that’s who Neo was before he woke up. You’re not awake.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 1:09pm@SPIKEBU,
Remember when in the movie “The Matrix” after Neo had already woke up and agent Smith was shooting at him on the roof and he dodged the bullets; Afterwards, Trinity asked him how he moved like that. She was awake, but didn’t understand it all, only Neo understood, and this is like that.
I am quite awake, and if you would have read my posts above, you would understand more of where I stand As for this statement you commented about…
…Government must take on some projects, but those projects should support the community and the free market system, not force the direction of the free market system. Let me explain.
The government should do things that:
1 – Protect people and their property against disaster.
2 – Make it easier for the free market to expand and grow.
While a hockey sports arena could classify as the second thing, the difference is the it wouldn’t be making it easier for the market to grow, it would be trying to directly grow the market, and government can’t/shouldn’t do that.
Think about the Hoover Dam, Chicago River’s connection to Lake Michigan, US Geological Survey, and the US Postal Service. Even the USPS was a project that helped our country to prosper for a long time, and there have been times when the free market stepped in where needed. Don’t forget, The Pony Express is still the most successful business ever started in the US.
The government needs to take on some projects to allow those of us with great idea
Report Post »neiman1
Posted on February 25, 2012 at 12:21amYou cannot scream about cities with Eminent Domain stealing people’s property and then pick on this city for actually paying people what they wanted. Cities can buy property to build a better tomorrow and actually paying people instead of taking is the right way to do it.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:12amYes,
I agree totally. I’d rather see a local community government purchase property. Purchasing the property puts the local community government into the free market system, rather than bypassing it.
Report Post »spikebu
Posted on February 25, 2012 at 4:29amThe local community government is spending our money on a pipe dream for us and gold lined pockets for their friends! If you like that, I’ve got this swamp…
Report Post »TheBurningTruth
Posted on February 25, 2012 at 6:43pmYes I CAN scream about it. Your argument reduces to: If you don’t like the city shorting property owners then you MUST accept overpaying those same owners. Garbage. How about trying to establish a TRUE property value. Asking the owner what he wants for it is NEVER a true and valid property value. The fact that the city will NOT release the appraisals is a pretty good indication of something smelly.
I’ve seen cases where insiders get info early on and buy property that is slated for eminent domain seizure. The hawks swoop in and buy up something for pennies on the dollar and then sit on it for a year or two only to get big rewards. I wouldn’t be surprised to find out that a few of the more recent land acquisitions were somehow tied to friends or associates of those either building the facility or those in the local government. In this case, they probably decided to overpay EVERYBODY and let their friends hide out in the crowd. After all, its just the taxpayer’s money.
Report Post »Smokey_Bojangles
Posted on February 25, 2012 at 12:05amCommie towns deserve what they elect.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:20amI wouldn’t say this a sign of communism.
Report Post »Exiled
Posted on February 25, 2012 at 3:04amThis was the furthest thing from Communism.
Report Post »13th Imam
Posted on February 24, 2012 at 11:59pm“Oddly , some of these people were given more than they paid??” What if they bought their property 50 years ago, 30 years ago?? Allentown has many areas where property was unused. Developers or politicians want prime property, at cut rate prices, much like the KILO property in New London, CT
Report Post »staythecourse
Posted on February 24, 2012 at 11:53pmyep! That’s Allentown for you!
Report Post »JACKTHETOAD
Posted on February 24, 2012 at 11:52pmHow could the properties‘ prices jump when the stadium isn’t built yet? Wouldn’t the properties for the proposed stadium go at current market value, and in turn the remaining adjacent properties then increase in value? I guess I don’t understand real estate, but I’ll usually recognize the smell of fish.
Report Post »MR_ANDERSON
Posted on February 25, 2012 at 2:09amSpeculation,
This happened in San Diego when they were looking at moving the chargers to Oceanside. My friend sold his house and got out of California with a little extra.
Speculation works on other things than just oil prices.
Report Post »JACKTHETOAD
Posted on February 25, 2012 at 8:27amThanks for the honest answer, MR_A. Now I understand a little more about real estate. Kudos to your friend for selling his house and leaving California.
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