Allentown’s NIZ attracting developers, businesses to The Waterfront
Read more from WFMZ.com at: http://www.wfmz.com/news/news-regional-lehighvalley/allentowns-niz-attracting-developers-businesses-to-the-waterfront/33209670#.VWS-fjHW16k.email
First it was the hockey arena and City Center.
Next up: The Waterfront.
Allentown’s Neighborhood Improvement Zone, or NIZ, is bringing a lot of new businesses to the city but what’s in it for them?
For businesses it can mean a huge rent reduction but in order to get it, businesses must also give. Developers said the NIZ is a business magnet, a way to revitalize 128 blighted acres in the heart of Allentown and along the western portion of the Lehigh River.
The hook? All taxes generated in the NIZ, with the exception of real estate and city taxes, stay in the NIZ so developers can formulate extremely competitive rents.
“We take the base rent, minus what we believe they are going to contribute in taxes and they are going to come up with what we call the NIZ rent,” said developer Ryan Dunn with Dunn Twiggar.
Dozens of businesses have flocked to Allentown’s City Center and The Waterfront is now looking for tenants and getting a lot of interest. But since no business is alike, no lease is the same.
Developer J.B. Reilly said the negotiation process with a prospective tenant will involve discussions about a business’s taxable amount, its needs and the term of the lease . Reilly said the longer the lease, the better the deal.
“We are able to be more competitive with our lease rates for businesses who are looking for longer lease terms,” said Reilly.
Each year the taxes paid by the business are verified. While most rents are fixed, in some instances they can vary. In a few cases the amount of taxes paid covers the rent.
Developers said the exact terms of a specific contract are hammered out in the negotiation process. A process that when complete will allow the NIZ businesses to re-invest in Allentown.
“As an employer your biggest costs are typically your leased office space and your personnel. If you can take one of those two costs and reduce that in half imagine the expansion that company could see,” said Dunn.
