Over thirty people from various Western Massachusetts organizations joined representatives of the Federal Reserve Bank of Boston and the Federal Reserve Bank of Philadelphia on a three-day visit, November 28 to 30, 2012, to Pennsylvania’s Lehigh Valley and the cities of Allentown and Bethlehem.

City2City attendees heard presentations about strategies to redevelop the urban core, support entrepreneurship and business incubation and learned about the impact of Bethlehem’s Sands Casino on the region.

What we learned:

-Allentown, the third largest city in Pennsylvania, is in the process of a significant revitalization of the center city. Officials are anticipating significant population growth over the next 10 years and its proximity to metro New York (1 hour and 15 minute drive) is attractive, and growth is coming from companies with less than 100 employees.

-Allentown has developed something called the Neighborhood Improvement Zone (NIZ) to attract core city investment. The NIZ was established through state legislation authored by State Senator Pat Browne, who represents the Lehigh Valley. The NIZ captures all state tax revenue generated in the NIZ to be used as a financial tool and reinvested in the site to encourage development in the NIZ.

-The NIZ legislation has led to an investment of $230 million in Allentown’s core city; an 8,500-seat arena (ground was broken during our visit), 220-room hotel and medical care space are all part of the development.

-Allentown was also vying for a casino, in competition with Bethlehem, prior to Pennsylvania’s selection of the site of the Sands Casino that opened in Bethlehem 2009. Allentown Mayor Ed Pawlowski and Bethlehem Mayor John Callahan indicated that the competition between the two cities was intense, leading to an agreement between the two mayors that the winning community would capture 80% of the casino’s revenue sharing and the losing community 20%.

-The Bethlehem Sands Casino site was one of the largest brownfield remediation sites in the United States. Economic development on the site was underway prior to the building of the Sands. The casino is built on the former Bethlehem Steel site.

-Bethlehem’s political and planning leadership visited other casinos across the country to learn how to mitigate the impact of a casino on their community -- visiting communities where the impact was both positive and negative.

-Well in advance of the building of the casino, Bethlehem officials altered the city’s zoning ordinance to prohibit the establishment of check cashing stores, massage parlors, pawn shops and related businesses in the areas around and near the casino.

-Leaders indicated that the casino is a part of the region’s revitalization, not the primary driver of the area’s resurgence. The primary benefits of the casino have been the jobs created and the local and state revenue generated by gaming. Representatives of the region also shared that the casino does not play a role in spreading economic development to other businesses in the region. According to Mayor Callahan, the Sands “is not the economic engine” for the city or the region.

-Ben Franklin Technology Partners of Northeastern Pennsylvania is one of four centers in Pennsylvania, funded by the state, which promotes entrepreneurship and economic development. The organization was founded in the 1980s as a result of massive steel plant closings during that decade. The northeastern center is housed in the Ben Franklin TechVentures incubator. The initiative has had a $9.3 billion impact on the Pennsylvania economy, and jobs created with the help of the organization pay 33% more than the state’s average wage. In spite of its success, the Commonwealth of Pennsylvania has substantially cut funding to the center over the past year.

-The City2City contingent also met with representatives of area colleges including Northampton Community College, Lafayette College and Muhlenberg College. Northampton Community College offers certificate programs and trainings related to casino employment, such as card dealer training.

-Community leaders expressed that race and racism, the distinction between “have” neighborhoods and “have not” neighborhoods continues to be a barrier to advancement for the cities and the region.

Bethlehem’s daily newspaper, The Morning Call, published a story about the City2City Greater Springfield visit. See link: