A controversial mixed use ordinance at the 53-acre Martin Tower campus is poised for adoption by Bethlehem City Council later this month, following a review by the planning commission.

Mayor Bob Donchez and Council President Willie Reynolds have publicly stated that they want to give developer Lew Ronca more flexibility for numerous different uses, such as destination retail, big boxes and apartment buildings. But documents provided to this reporter in response to a Right-to-Know request reveal that, despite numerous meetings with city officials since January, Ronca appears to be somewhat uncertain what he really wants to do with the entire 53-acre site.

Two things are clear, however. First, he wants to demolish the iconic 21-story building that once stood as headquarters for Bethlehem Steel. Second, he’s considered replacing this landmark listed on the National Register of Historic Places with a small commercial building, possibly a high-end gas station.

Ronca instrumental in securing Bethlehem CRIZ

Documents released by Bethlehem City Hall reveal that Ronca was instrumental in obtaining a City Revitalization and Investment Zone (CRIZ) designation in Bethlehem. That is a special tax zone in which a developer can use state income and sales tax to fund the cost of development. The Martin Tower project is described as the “cornerstone” of Bethlehem’s 130-acre CRIZ plan and as “another example of Bethlehem’s efforts to create its future from vestiges of Bethlehem Steel’s past.”

Ronca orchestrated the use of lobbyists Anthony Pugliese and Heather Browne, wife of state senator and NIZ author Pat Browne, to navigate the treacherous political waters in Harrisburg to secure favorable tax concessions for a closed club of developers that includes him, Dennis Benner, Mike Perrucci, J.G. Petrucci and the Sands Casino. At the time, Ronca and then Mayor John Callahan were conducting conference calls with these lobbyists, emails reveal that developer Lou Pektor was on the outside looking in. He tried over and over to get a seat at the table, but it was a closed game.

When the CRIZ designation ultimately came in late 2013, Ronca finally had a green light to use state sales and income tax to fuel development at the site. What’s more, any attempt to transfer the CRIZ away from Martin Tower to another part of the city would require his approval. He could just sit on the entire tract and do nothing, and the city would have to pay him to move the CRIZ somewhere else.

Ronca beneficiary

of $9M grant

Think the CRIZ is enough of an incentive to jumpstart development? Think again.

In addition to the CRIZ, Ronca has another government concession: $9 million in taxpayer dollars to remediate asbestos at the site. Over the summer, Mayor Donchez requested a one-year extension on the site, signing off on a letter that had been prepared in advance by Ronca. This is part of the state Redevelopment Assistance Capital Program (RACP), and was initially obtained by Pektor when he was involved in the Martin Tower project. Since this funding stream was approved before the CRIZ, Ronca will be able to take advantage of this state grant as well as use state taxes to pay for construction.

Instead of using $9 million in RACP funds to just remove the asbestos from Martin Tower, he intends to do that and then tear down the building. He will spend $5.1 million on asbestos remediation, $1.75 million for demolition and $1.5 million on regrading. The tower structure is to be replaced by a $4 million commercial building. The state will reimburse $9.075 million of the money spent.

Ronca wants to replace

Martin Tower

The new commercial building will most likely be a high-end gas station. Ronca and his business associate, Duane Wagner, began meeting with city officials in earnest concerning a new Office Mixed Use Ordinance in January. In late February, Ronca broached the idea of a high-end gas station, possibly a Sheetz, to replace the Martin Tower. He seemed concerned at the time that it might be too close to Route 378 because of wording in the ordinance, but his worries seem to have been answered.

A high-end gas station is appealing to Ronca because, as he explained in email exchanges with city officials, it will generate $210,000 annually in state taxes. That money can in turn be used to fuel more CRIZ development. This idea was discussed with Mayor Donchez.

According to a timeline Ronca submitted to the state, he was hoping to get the Office Mixed Use Ordinance approved in November. After that, he would present a master plan for approval in February and a specific plan to demolish Martin Tower in May. The tower would tumble in October 2016.

This is completely contrary to redevelopment elsewhere in Bethlehem, where the emphasis has been on adaptive re-use of Bethlehem Steel structures.

What happens to the rest of the site is unknown.

Contacts with city officials

Ronca and other CRIZ beneficiaries have been major contributors to Mayor Donchez and several council members. The Right-to-Know request asked for all written communications between these elected officials and Ronca, even phone text messages and emails from their personal accounts. Aside from two emails from Michael Recchiuti inviting Ronca to campaign fundraisers, nothing indicates that Ronca reminded any elected official of his contributions or that there were any communications at all between Ronca and elected officials, with the exception of meetings with Donchez to discuss the new zoning proposal.

But Ronca did have frequent contact with City Planning Director Darlene Heller and Department of Community and Development Director Alicia Karner, as several drafts of the new proposal went back and forth.

Finally, after two meetings with the planning commission, Heller forwarded the new zoning ordinance to city council with a memo calling Martin Tower “blighted and obsolete.” She claimed the city was being proactive, but the reality appears to be that this ordinance was inspired by Ronca, who provided the original draft to the city on Jan. 20, 2015.

In addition to being the driving force behind this new ordinance, Ronca business associate Duane Wagner even went so far as to provide Heller with talking points to answer merchant concerns about the ordinance as fears of a third downtown began to surface.

Ronca strategy: Wear

the public down

Instead of publicly defending his proposal or presenting a specific plan of what he intends to do at the 53-acre site, Ronca’s strategy seems to be to wear the public down. He did not attend the meeting when the new zoning ordinance was presented to the planning commission in July and August and has been absent at three public hearings concerning these zoning changes.

At the Oct. 6, public hearing, Planning Director Darlene Heller provided a two-hour and 15-minute presentation concerning the new zoning ordinance in what was perceived by many downtown merchants as an attempt to drive the audience away.

At that time, DCED Director Karner began exchanging text messages from Ronca, who was outside.

Karner: “Not sure why you get to miss all the fun...”

Karner: “Darlene presented for two hours. Questions now.”

Ronca: “I was outside for a while but needed to avoid reporters. Didn’t D wear them out?”

Karner: “Only a few.”

Ronca: “OK. Keep me posted. Any grumbling from the audience?”

Karner: “Hearing just ended. rest of council to go. 34 speakers. 2 supportive.”

These text exchanges, which actually went back and forth for three days, are the only text messages exchanged between Karner and Ronca. But they make clear that his strategy was to avoid the public and “wear them out.”

What’s next?

That strategy has failed. If anything, the result has been even greater participation and many questions about the absent developer who refuses to present a plan.

City council is currently considering amendments proposed by Eric Evans to prevent a third downtown. But it will still include destination retail and could spur all kinds of big box development. The planning commission is scheduled to consider these proposals Dec. 10, after which city council is scheduled to vote on the mixed use ordinance Dec. 15.”

Right-to-Know timeline

1/14/13 – Lou Pektor provides Mayor Callahan with copy of the “NIZ meeting list.”

1/16/13 - Mayor Callahan and Joe Kelly have meeting with Pektor and Deibert about Home Properties. Matt Deibert is bringing Home Properties to the meeting. (Matt Deibert seems to visit NorCo Exec John Brown on a regular basis, and it is unknown how many outfits he has introduced to Brown.)

5/22/13 - Joe Uliana explains CRIZ legislation to LVEDC

6/11/13 - Mayor Callahan scheduled to meet Ronca about Martin Tower TIF.

6/21/13 - Don Cunningham urging LVEDC to support CRIZ legislation.

6/21/13 - Sy Traub has no opposition to CRIZ advocacy by LVEDC so long as NIZ legislation remains unchanged.

6/25/13 - Ronca business associate Duane Wagner sends Callahan SB 947 concerning CRIZ

6/25/13 - Ronca meeting with Callahan about Martin Tower TIF

7/3/13 - Uliana sends Joe Kelly Tax Code bill with final CRIZ language.

7/23/13 - Tim Garrity tells Callahan his company (Compass Point Consulting) can help Bethlehem with CRIZ.

8/28/13 - CRIZ conference call involving Callahan, Lew Ronca, Senator Lisa Boscola, Norton Herrick (Martin Tower) and lobbyists Anthony Pugliese and Heather Browne (wife of state Senator Pat Bowne)

10/7/13 - CRIZ guidelines provided to city.

10/8/13 - Pektor trying to get hold of Callahan

10/17/13 - State provides CRIZ guidelines to Bethlehem and lobbyists Joe Uliana and Rocco Pugliese

11/22/13 - Joe Kelly sends final draft of CRIZ application to Joe Uliana, Dennis Benner, Robert DeSalvio, Lew Ronca and Mayor Callahan.

12/3 & 12/4/13 - Pektor wants Callahan to call Leo DeLong

12/26/13 - Duane Wagner submits CRIZ application supplement, including private investment highlights. Kelly responds with information indicating there must be one private dollar for every $5 of CRIZ revenue.

12/30/13 - Kelly sends Uliana a copy of Governor Corbett’s CRIZ news release.

5/22/14 - Brenner proposes CRIZ amendment to insure that all liquor taxes are captured by CRIZ developers.

5/23/14 - Karner informs CRIZ developers that it is impossible to know what taxes are being certified by the state for liquor sales because of tenant confidentiality.

5/27/14 - Dennis Benner tells Karner that city needs to take “leadership position” on liquor and wants to be able to capture all alcohol taxes.

6/4/14 - In response to a request from Amy Pektor, DCED’s Jordan Snelling sends her a map of the Enterprise Zone and a list of the city’s business and development incentives.

7/14/14 - RACP schedule calls for land development approval by planning in May 2016. There is no mention of a need for a new CMU ordinance. RACP project to start October 2016, which at this time would be a preservation of Martin Tower. But Ronca’s schedule states that he will be seeing a zoning amendment approval in November 2015.

7/28/15 - City solicitor wants amendment to RACP agreement to Martin Tower, indicating Ronca must kick in $12 M and state grant will be $9.075 M (The $12.6 M paid to purchase Martin Tower is counted, so he is getting $9.06745 M).

9/12/14 - Karner advises Pektor aide James Towers that earliest 315 Columbia project will be considered is October.

9/17/14 - Pektor aide James Towers told by Bethlehem’s Jordan Snelling that 315 Columbia project will not be on the agenda for 9/18 because the board lacks a quorum.

9/18/14 - Pektor aide James Towers submits Blackplate Distilling project for CRIZ at 315 Columbia Street, an “arts premium spirits distillery, tasting room and restaurant facility,” located one block from ArtsQuest. The project is projected to create 41 full time jobs with $1.1 M in annual wages at $26,800 per job. This would redevelop a brownfield warehouse.

9/29/14 - James Towers with Lou Pektor wants to know if Lou Pektor project at 315 Columbia is on agenda for CRIZ meeting on 10/2/15.

12/11/14 - Jim Broughal meets with all CRIZ developers

1/20/15 - Ronca business associate Duane Wagner meets with Alicia Karner and Darlene Heller concerning OMU zoning ordinance at Martin Tower. This draft contains a 50,000-square-foot limit on retail use, but is crossed out.

1/25/15 - Karner tells Heller that, other than some minor tweaking, Ronca is OK with changes proposed by Bethlehem to a new OMU zoning ordinance at Martin Tower.

2/3/15 - Heller recommends to Ronca that in an OMU, a minimum of 65 percent of the building footprint of all new buildings shall be at least two habitable stories. She points out that the maximum build out would be 31.6 acres, or 1.376 million square feet of building foot print. She believes that 25 percent, or 344,145 square feet, should be limited to one-story. The rest would have to be two stories or greater.

2/23/15 - Recchiuti invites Ronca to a 2/26 fundraiser at Bethlehem BrewWorks

2/25/15 – Ronca and Wagner send an email to Karner about a possible 1.5- to 2-acre Sheetz at the site, believing it will generate about $210,000 annually in state taxes that can be used for CRIZ financing.

3/2/15 - Karner advises Ronca she will discuss Sheetz proposal with Mayor Donchez.

3/4/15 - Planning Dept. sends OMU design guidelines to Ronca and Karner, and adds that if they are acceptable, she can try to get the matter heard by planning commission in March.

3/24/15 - Ronca meeting with Mayor Donchez and Karner to review OMU Ordinance. Ronca sends draft copy.

3/26/15 - Ronca sends latest draft of OMU Ordinance for review with Karner and Heller on 4/6/15. It eliminates fast food restaurants, adds a provision indicating that the district “is intended to encourage ground-floor retail and service uses to promote connectivity between the residential and commercial buildings ... “ It permits a gas station.

4/1/15 - Heller sends OMU Ordinance back to Ronca suggesting changes.

4/7/15 - Wagner concerned about “gas station distance.” Wants to discuss with Heller. Appears to be concerned he might be too close to Route 378.

4/13/15 - Ronca emails Karner he expects to see OMU Ordinance submitted to the planning commission no later than May.

4/17/15 - Wagner sends draft of OMU Ordinance and design guidelines to Heller.

4/27/15 - Recchiuti invites Ronca to a 4/30 fundraiser at The MINT Gastropub

6/1/15 - Heller advises Ronca she met with the mayor concerning OMU Ordinance, and will be meeting him again on 6/2.

6/3/15 - Heller provides Ronca with latest revisions to OMU Ordinance based on discussions with the mayor, as well as revisions to design guidelines. He is pushing to have matter heard by planning commission in June.

6/5/15 - Heller provides latest draft of OMU Ordinance to Ronca, insisting on 10 percent open space. This includes handwritten notations from Ronca. He only wanted 10 percent of the residential area excluded as open space. Bethlehem wants 10 percent of the entire tract excluded. Bethlehem wants 25 percent limit on vinyl siding. Bethlehem wants description of public amenities to be provided. Ronca pushing to have Martin Tower OMU Ordinance scheduled for June planning commission. Wagner says, “[t]he urgency is related to our RAPC extension request, which Lew had discussed previously with the mayor.” Heller tells him this is not possible because the latest ordinance must be reviewed with Mayor Donchez.

6/10/15 - Ronca business associate Duane Wagner tinkers with 10 percent open space requirement. Heller proposes that if Ronca caves on open space, she’ll cave on a vinyl siding limit.

6/12/15 - Annual City CRIZ tax report at Martin Tower filed. Total goose egg.

6/16/15 - Undated and unsigned letter to Joseph Elias, RACP, Office of Budget, seeking a one-year extension on RACP Contract 300-726 for Martin Tower, citing the challenge of developing Martin Tower and need to adopt a new zoning ordinance. This letter has actually been prepared by Ronca business associate Duane Wagner, who is worried about the RACP agreement expiring on 6/30/15.

6/22/15 - Amendment #2 for RACP at Martin Tower provided to Ronca. This is to extend termination date to 7/31/15.

6/24/15 - Letter from Mayor Donchez to Joseph Elias, RACP, that appears to be identical to the unsigned and undated letter that Ronca prepared on 6/16/15.

6/29/15 - Heller sends Wagner what she calls the “long awaited document.” A final draft of the OMU Ordinance before it hits the planning commission.

6/30/15 – Wagner either acknowledges “the final” document with a comparison or is attempting some minor changes. It appears to be the former.

- State notifies Bethlehem that RACP extension at Martin Tower is flawed because it does not provide information on construction status, funding secured or received and special conditions.

7/1/15 - Ronca informed more information needed in extension request for Martin Tower RACP.(ME300-726)

7/6/15 - DEP informs Ronca that he has failed to file a monthly discharge report since September 2012, which is in violation of the Clean Streams Act as well as his NPDES Permit.

7/7/15 – Ronca business associate Wagner provides “talking points” to Darlene Heller for her to use at the planning commission in reaction to concerns raised by vox populi. (This is where the 425,000 square feet myth arises.)

7/9/15 - Dyanne Holt (Apollo Grill) advises Bethlehem officials that she would like to address the change in zoning at Martin Tower at a 7/14/15 meeting with the mayor.

7/14/15 - Updated project schedule for RACP provided by Ronca. State wants assurance of $550,900 in matching funds.

7/24/15 - Meeting between Heller and Ronca business associate Wagner to discuss OMU changes in response to planning commission concerns.

7/27/15 - Karner informs Wagner that RACP grant has been extended.

8/3/15 - Wagner looking for draft of OMU that is going to planning commission on 8/13.

8/5/15 - Wagner wants Heller to contact him concerning recommendations at planning commission and an inter-office memo she shared with him. She sends a memo to the mayor indicating Ronca agrees with all changes recommended by city, except he wants to be able to do two of three uses (residential, office, retail) without being tied down to a specific percentage.

8/6/15 - Meeting with Ronca and mayor (There was a meeting with be Atiyeh earlier in the day).

8/14/15 - Undated and unsigned memo from Darlene Heller to city council for zoning ordinance amendments for the redevelopment of Martin Tower. She calls the tower “blighted and obsolete and its reuse is extremely challenging to say the least.” She states the city is being “proactive” with a broader mix of proposed uses and notes the zoning amendment was recommended for approval by a 4-1 vote at the planning commission.

8/27/15. - Wagner thanks Heller for her help that day.

9/4/15. -Solicitor’s Notice of Public Hearing on Martin Tower CMU Ordinance for 10/6/15.

9/15/15 - Heller informs LVPC she is unable to attend 9/21 planning committee meeting at which Martin Tower OMU will be discussed.

10/6/15 - Text exchanges between Alicia Karner and Lew Ronca, starting on the date of the special hearing. (This is their only exchange.)

Karner: “Not sure why you get to miss all the fun...”

Karner: “Darlene presented for two hours. Questions now.”

Ronca: “I was outside for awhile but needed to avoid reporters. Didn’t D wear them out?”

Karner: “Only a few.”

Ronca: “OK. Keep me posted. Any grumbling from the audience?”

Karner: “Hearing just ended. rest of council to go. 34 speakers. 2 supportive.”

Oct 7

Ronca: “What time did you get out of there?”

Karner: “Idk. 1230 or so.”

Ronca: “My God. Had I known I would have bought you a drink or two after that!”

Karner: Sends Ronca a link to a blog post by this reporter.

Ronca: “There ya go. All was not wasted then!!”

Ronca: “Yes. I read that first thing this morning. Schweder is an (expletive deleted) by the way.”

Karner: “First I ever saw/heard him speak.”

Ronca: “There is a story. I’ll tell you when I see you.”

Karner: “Can’t wait.”

Oct 8

Ronca: “Can you meet with me and the mayor tmrw at 3:30?”

Karner:”Yes. At Mayor’s office?”

Ronca: “Yes please. See you then.”

10/9/15 - Alicia has meeting scheduled with Ronca business associate Duane Wagner at 3:30 pm.