ssinsider is known to Gadfly but prefers to remain anonymous.
To amend your last comment, perhaps Gadfly is impossibly optimistic about the BPA having any interest in doing something better for the rest of the community.
Nope: just a parking garage. And some cash. The End.
No sense of the greater good (ie: the potential effect of increasing foot traffic and bringing diverse folks to that area), the long-term (particularly the aesthetics on that main drag into/out of Bethlehem), and what the residents of Bethlehem will have to live with for a LONG time. Thanks a lot Parking Authority. I’ll admit I am not familiar with either Peron or Nova, but at least have the courtesy to PRETEND to consider the greater good, appealing aesthetics, and future of our community. Just act interested, rather than letting us believe you are biased or making secret back room deals. Surely you wouldn’t be doing that . . . would you?
Gadfly’s been a little backed up. There are at least three rather significant issues on which he wants to spend more time (expertly avoiding ending with a preposition): the August 28 Bethlehem Parking Authority meeting, the August 20 City Council meeting, and the last Planning Commission meeting — the one that approved the new building at 548 N. New.
But sometimes it’s wise to let issues marinate. First impressions, which sometimes can be faulty, fade. Emotions cool. And other voices , other opinions have time to be heard.
So six days have passed since Gadfly’s last post on the meeting in which the Bethlehem Parking Authority chose the developer to construct a building along the 3rd St frontage of the new Polk Street Garage. You can find all the previous posts by going to “Parking” on the Gadfly sidebar.
Let’s go back to that meeting, to that decision.
Gadfly likes to think that he is Everyperson. Except that he has more time to go to a lot of the City meetings. (You would if you had more time, right?) He’s an average citizen. He has no special or inside knowledge. He sees himself as “you” sitting there, an interested resident, trying to understand how things work in your town.
The BPA Board had proposals from two developers — Nova and Peron.
To help the Board make a decision, the BPA requested the City to evaluate the two proposals. An adhoc City Committee received in-person presentations from both developers and wrote a report basically favoring Nova.
To prepare for the decision, BPA Board members were sent three items: 1) the two developer proposals, 2) a “technical review” of the two proposals (not an evaluation) from BPA consultant Desman, and 3) the City evaluation.
Gadfly does not have the print proposals from the developer. But at the August 28 meeting, he heard the Desman “technical review” — a non-evaluative “factual compilation of the proposals” — and the next day he secured a copy of the City’s evaluation.
Thus, in making observations on the BPA Board’s decision, Gadfly has access to 2 of the 3 sources the Board had. And so do you. You can hear the Desman “technical review” on Gadfly’s meeting audio linked below, and the link to the City evaluation is here: BPA Proposal Analysis (FINAL)_1 We will always try to provide access to the primary sources so that you can form your own opinions.
Gadfly is puzzled by the Board chair’s immediate response to the “technical review” at the meeting: “Basically two 5-story buildings, retail on first floor, apartments above.” That response — without any appreciation of subtlety, without any appreciation of nuance in the City evaluation — flattens the two proposals into undifferentiated clones, thereby justifying the higher purchase price as the determinative factor. If the proposals are the same, yes, certainly, by all means, take the higher offer by Peron. Makes perfect sense.
But in Gadfly’s judgment, based on the City report, the proposals are not the same. The proposals, in fact, are significantly different. Here, according to the City evaluation, is what we lose by favoring Peron:
possibly 45 apartments instead of 32 (whether Nova proposed 5 floors of residential as indicated in the City report or 4 was, strangely, not resolved)
“a mixture of market rate residential apartment sizes, presenting a potentially more resilient residential product”
“a rooftop restaurant concept, providing greater use of the building by the public and potentially driving more transient parkers to the Polk Street Parking Garage”
a design “emulating elements found on the former Bethlehem Steel site”
a design that “not only encourages the pedestrian interest in the Third Street corridor, but also draws interest down Polk Street”
a design adding “a variety of building styles to the corridor and . . . inclusive of more desirable design elements”
“overall aesthetics, including the stone arches reflecting the ruins and the steel elements, [that] provide an overall stronger relationship to the place in which the building is located”
“proposed use of the building [that] is more comprehensive, providing commercial opportunities beyond first floor retail and greater opportunity for use by the general public”
To Gadfly this positive mix in Nova of the practical, financial, historical, aesthetic, and architectural — this mix of novelty and beauty — this appeal to City goals of a walkable city and the link to our heritage — was surely worthy of discussion.
But the BPA sped to approval of Peron in one minute, fifty seconds.
There was not one second of discussion on the requested evaluation by the City. Which seemed quite odd to Gadfly, as well as discourteous. It said to the City, your opinion was totally worthless. The City report was not even mentioned by the Board members. Not one element of it will appear in the minutes. The historian of the future will have no idea that there was a competing design for the Polker.
Was there not one point in the City analysis worthy of discussion?
But as the motion-maker said, “I looked at both of those projects closely, and they’re similar, but there are differences, but I can’t get past the difference in price.”
“Money, money, money, money — Money makes the world go around” as the well known song from Cabaret goes.
Out here in the cheap seats, it certainly seems that the BPA Board saw its chief purpose in this decision getting the greatest amount of money for itself. At the end of the day, “It’s dollars and cents,” said a third Board member. And, “taking a BPA perspective” in his forceful post opposing the City Committee, John Price likewise points to “the significant income to the BPA” from the CRIZ part of the Peron proposal.
Gadfly gets it. It would have taken great courage for one of the Board members to say even, “Whoa, hold on a minute. We owe it to common decency to hear from the City Committee we asked to take a look at this. And we owe it to the public to make sure we have thoroughly considered all perspectives in making our decision.” But that’s what idealistic Gadfly would have expected at the very least.
It would have taken even greater courage for one of the Board members to say, “Let’s put the money aside for a few minutes, we can always come back to it, but our purpose here is not simply to make money for the Parking Authority, and the question we should be front-loading is how do these proposals align with City goals — which proposal is best for the City at large.”
Gadfly was looking for someone on the BPA Board to say, “At the end of the day we have the opportunity to advance City pedestrian goals, to have a building that speaks of our Bethlehem history, the opportunity to do something special, exciting, unique. Let’s see if we can take advantage of this opportunity and still be fiscally responsible to the Parking Authority.”
John Price is a forty-something resident of the forgotten far northeast Bethlehem. He is a computer nerd by day and political wonk and local government follower in the shadows of the night. A socially liberal, fiscal conservative in a world gone mad, he wonders if he is in danger of extinction.
As someone who follows development in Bethlehem, I find the committee’s determination of “Nova Development has a stronger track record of project completion in the City of Bethlehem and a more desirable building design” to be laughable and wrong. Nova Development, to the best of my knowledge, has not completed 1 project in the City of Bethlehem, or anywhere. Scarcia and Allied Construction are the people behind Nova and are not developers but, rather, a construction company hired by developers like Ashley Development to build projects. They should not get credit for being hired by a developer to build a building. If that were the case, Boyle Construction and Butz Construction would be the best developers in the area.
Second, Peron and Petrucci each have a very strong track record in the City and Lehigh Valley. For the committee to allow personal animosities to cloud their judgment is ridiculous. CW Van Wirt should never have been on this committee since she has come out against the garage in the past. Heller and Karner have a dislike for former Mayor Callahan, whose company is involved.
Third, this is for Kizman, CRIZ uses state taxes not city taxes. So the City loses nothing, and will gain from an increased assessment on the property for taxes, as well as EIT and BPT taxes.
Fourth, Peron and Petrucci each control their own CRIZ land for other projects. They could easily transfer some of their acreage to the parcel. Nova would have included CRIZ, but they control none — because of that whole lack of developing anything from above.
Fifth, the committee’s dismissal of 20% of the CRIZ was short-sighted. 100% of the state taxes for that parcel will be CRIZ increment. 20% of that could mean significant income to the BPA.
Finally, from a BPA perspective, you make more $$$ from daily parking than monthly parking. While 75 spots vs 32 is a big difference. The hourly rate for this 43 spots should be included in your analysis. Even at $5 per day for 300 days per year, would $64,500 per year.
Gadfly’s multi-post coverage of the August 28 Bethlehem Parking Authority meeting suffered hiatus interruptus because of mental static in Gadfly House. Freshen up your memories by going to Parking on the Gadfly sidebar.
Remember that on August 28 the BPA was to choose between two proposals (Nova and Peron) for a retail/residential component along the 3rd Street side of a new Polk Street parking garage.
Gadfly was glad to see this retail/residential component associated with the garage design, for it is in line with ideas he had been reading in Jeff Speck for “hiding” the garage and thus fostering City goals of walkability and the general quality of “street life.”
The BPA, like all Authorities, is “independent” and, moreover, is funding the project without City backing, but it asked the City for an evaluation of the proposals.
Gadfly was glad to hear about that, for the City, though sharing with the BPA the practical concern for providing sufficient parking in the eastern corridor of 3rd Street, might be thought to speak from a bigger picture perspective when it came to retail/residential aspects.
But the requested City evaluation (BPA Proposal Analysis (FINAL)_1) was not even mentioned by name or considered in any detail in the 2:50 mins. that the Board spent discussing and voting on the two proposals — one full minute of which was taken by the solicitor reading the motion.
That’s one minute and fifty seconds of discussion.
The City committee favored Nova; the BPA approved Peron.
Here is Gadfly’s rough comparison chart of the two proposals on several points:
Is there nothing here that merited deeper discussion?
Well, first of all, Gadfly — a babe in the woods as far as these matters are concerned — wondered if the BPA had to choose one “as-is” proposal over the other. One of the Board members said there were good points in both proposals. So, was negotiation possible at this point? Peron, we’d like something on the roof. Nova, we want a local retailer. Etcetera, etcetera. Could there be mix and match? Could the reps from both sides address such desiderata right then and there? And/or be sent back to their drawing boards for resubmission and discussion at a later time? Bottom line(s): was the Board narrowly locked in to what exactly was submitted? did their decision have to be made that day? Gadfly does not know what the “rules” are in such proceedings and might be exceedingly naive here. But if there were good things in both proposals, why not try to get them in the final design? Seems common sense. Gadfly bets you were thinking along these lines too.
Gadfly — again, a novice in these matters, of course, like most of you are — couldn’t understand why two veteran developers experienced in and keenly aware of the Southside market would be approx. $200,000 apart (when you figure in the CRIZ, which, frankly, is a mystery that Gadfly is working on) in their purchase offers. A differential large enough to literally blind Board member’s eyes and blunt discussion. Peron offered about 35% more than Nova. Isn’t that gap odd? Which actuary lives on another planet?
“Market-rate” v. “luxury” apartments. Probably little or no difference in those terms. But anybody following Gadfly knows we’ve been talking about the need for more housing that “regular” people can afford. Looks like we won’t get that with either proposal. Whatever happened to the idea of “inclusive zoning”?
Nova’s new Bethlehem Steel design (a local history element) over Peron’s design simply matching the current buildings to the right and left of the garage certainly grabs Gadfly more. The City committee called the Nova design “exciting,” “unique,” “unusual.”
Factory Retail as Peron’s tenant does sound exciting. But the City committee raised the question of them using the entire space. Do we have an answer to that? Are they locked in to Peron? Could they be one of the tenants for Nova? To repeat, Gadfly doesn’t know how these things work, whether such shifts are possible.
Gadfly would certainly have liked to have heard discussion of such matters.
So, the purchase price line in the chart dominated attention: Peron offered approx. $200,000 more.
The BPA would gain approx. $200,000 by awarding the sale to Peron.
So, the short pre-vote conversation was dominated by such comments as these:
“I can’t get past the difference in price.”
“It’s dollars and cents at the end of the day. It is a lot of ka-ching.”
“I’m not walking away from $200,000.”
Basically, Big Money meant End of Discussion.
Let’s quote again from the conclusion to the City committee’s evaluation:
Nova Development has a stronger track record of project completion in the City of Bethlehem and a more desirable building design. The Nova design would add a variety of building styles to the corridor and is inclusive of more desirable design elements. The overall aesthetics, including the stone arches reflecting the ruins and the steel elements, provide an overall stronger relationship to the place in with the building is located. Additionally, Nova Development’s proposed use of the building is more comprehensive, providing commercial opportunities beyond first floor retail and greater opportunity for use by the general public. The proposed roof use of the Nova design, as either an amenity or restaurant, is a significant strength in the proposal and is a large factor in the difference between the two proposals.
If the BPA Board member can’t get past the difference in price, the Gadfly can’t easily get past the difference in design — what “we” get or won’t get in a design that we will live with for 40-50-60 years.
The Board decision might well be the right one, but Gadfly can’t get past the lack of discussion.
Is it such a no-brainer that you would sacrifice better design for greater profit?
Gadfly couldn’t help but think of the two well known local small business owners on the Board. The analogy isn’t perfect — but surely they have been faced with the decision about whether to do something cheaper to get by or more expensive because its beauty will add aesthetic value of the business. Tough decision, to be sure. And — to repeat — the analogy isn’t perfect.
But is it a no-brainer for guys like this to understand that it might “cost” you more (here, in terms of less profit) to get a better product?
And if money was the determinative factor, that deserves much more scrutiny.
In the long-run is the Peron proposal a better deal?
The City committee report said the financial components of the proposals needed such scrutiny: “While there is a difference in the offered purchase price, each proposal has complex financial aspects that should be evaluated by the BPA, including significant variances in contract parking spaces and some uncertainty around the potential for CRIZ increment generation.”
That evaluation didn’t happen.
So, though there were things Gadfly would certainly have liked to have heard discussion about, if finances were the key determinative factor in the BPA decision, there were things that it was absolutely necessary to have discussion about.
Now finances, dollars ‘n cents, are way beyond Gadfly’s ken. He’s venturing into deep water here.
The only aspect in the financial area that Gadfly thought he could grasp was the contract rates.
Nova estimated needing 75 parking spaces in the new garage, Peron 32.
Let’s figure the contract rates at $70/mo. per space when the garage opens:
Nova would pay $70 x 12 x 75 = $63,000/yr.
Peron would pay $70 x 12 x 32 = $26,880/yr.
Nova would pay the BPA $36,120 more per year
Peron offered $185,000 more than Nova.
Paying $36,120/yr. more for contracts, Nova would pay off that $185,000 difference in 5yrs, and from years 6-10 would bring in $185,000 more than Peron would. And on and on each year for 40-50-60yrs.
Now that may certainly be voodoo economics from an English prof — Gadfly humbly waits a deserved kick in the butt from the money minds among his followers — but at least he is trying to figure it out to the best of his ability.
All we got in the way of financial evaluation about contracts in the one minute and fifty seconds from BPA was the Board chair’s unsubstantiated “I think parking spaces will be similar when all is said and done.”
BPA is a different kind of animal. It depends on the income it raises to do whatever it wants/needs to do. When the financial officer gives the monthly tally of income/expenses at Board meetings, one can often hear such comments like “good job” or “that was a good month,” kind of forgetting that it is “our” money coming in at the meters and so forth.
Money is the air the BPA breathes.
It is just not the proper body to rule on design issues for a retail/residential site.
Steve Melnick is a retired economic development executive and a 25-year resident of Bethlehem.
It strains my credulity to believe that one developer willingly overpaid by some $200,000 dollars and then asked to be included in the CRIZ to recoup some of the costs of the proiect and the other developer didn’t ask for the same benefit. This decision leaves many questions unanswered. One developer has national retail clients lined up and the other one doesn’t. One developer asks for financial incentives after agreeing to pay $200,000 more than the other and doesn’t bring as much experience to the project. It seems to me that after overpaying for their last project, the BPA took the extra cash simply to offset any deficits they may have. Long range benefits be damned.
The City ad hoc committee: Alicia Karner, Eric Evans, Paige Van Wirt
City Councilman: Bryan Callahan (liaison to BPA)
BPA Exec Director: Kevin Livingston
BPA Board: Joseph Hoffmeier, Dino Cantelmi, Billy Kounoupis, Lynn Cunningham, Eugene Gonzalez
The BPA financial guys
Several others Gadfly didn’t know
The BPA Board was to decide between two proposals for retail/residential development associated with the Polk Street Garage: Nova and Peron.
Board members were sent the proposals and the City ad hoc committee report the previous week.
This section of the meeting was opened by an objective description of both proposals by the BPA consultant from Desman. He made no recommendation but refreshed people on the comparative proposals.
If you know anything about Gadfly, you know he values conversation: “Good conversation builds community.”
Gadfly expected discussion before a motion. Gadfly is not all that conversant (good SAT word) with parliamentary procedure, and he is used to more collegial decision-making, so he was surprised at the immediate motion supporting Peron.
Gadfly has attended many other “hot-button” City ABCs where after discussion by the Board, the floor is opened to the public.
Gadfly feels something like that should have happened here.
The City had been asked to participate, asked to make a recommendation, and three committee members were present prepared to discuss their report.
The City report gave several reasons for their conclusion and, perhaps anticipating that the Board might immediately favor the highest bidder, counseled that the finances were more complex than represented and would require more investigation and evaluation.
No investigation or evaluation of the financial matters had been performed.
And the City committee members were not invited to speak.
Nova was not invited to speak. (Gadfly is not sure if Peron representatives were there, but one of the newspaper articles seemed to imply that Peron’s Rob DeBeer was there.)
There was really no interaction among Board members either, no chance to determine how conversant (worked it in twice!) they were with the various documents and the issues.
There was no sense that the Board members weighed issues involved in the decision.
In fact, Gadfly has never seen substantive discussion in any Board meeting he attended nor seen such recorded in any past minutes he has consulted.
The usual procedure in Gadfly’s experience is exactly what happened here, a motion quickly followed by a unanimous voice vote.
Let’s come back and chew on the issues — was there nothing in the ad hoc report worth discussing? — but as far as process and procedure is concerned, Gadfly feels the BPA failed completely.