The tax incentive that gave rise to much of SteelStacks is set to expire

The taxing district that transformed the former Bethlehem Steel plant into the multimillion-dollar SteelStacks campus is ending this month.

The Tax Incremental Financing District, which Bethlehem created 20 years ago to jump-start redevelopment of the industrial land, expired Sunday.

Over the past two decades, real estate taxes derived from development in the TIF -- namely the casino owned by Wind Creek -- were diverted to build infrastructure and public amenities such as the Bethlehem Landing visitors center, Hoover-Mason Trestle and the plazas at the SteelStacks campus.

The money also contributed to site remediation at Five 10 Flats, an apartment and commercial project on East Third Street.

“The TIF is a big deal. In the end it provided great amenities and infrastructure for the city,” said Eric Evans, the city’s business administrator. “Even now, looking at the crystal ball, there’s so much opportunity for that property. We are all really pleased with where we’ve gotten in 20 years.”

Now the city’s Redevelopment Authority, which oversees the TIF, is allocating the remaining $1.2 million from the program. The latest projects won’t be as flashy as those that transformed the former blast furnaces into a tourist destination, but they will maintain the SteelStacks campus that sees 1 million visitors a year, said the authority’s executive director, Tony Hanna.

The final allocation includes money to replace LED streetlights for the SteelStacks campus; road improvements and new brick paving on First Street and Founders Way around the Levitt Pavilion, ArtsQuest Center and PBS 39; maintenance to the Hoover-Mason Trestle, new landscaping in the median at Founders Way and money for the new plaza at the National Museum of Industrial History.

The authority is also using the money to make repairs to the Visitor Center at SteelStacks. The former stock house, which dates to 1863 and once held supplies for the blast furnaces, needs repairs to the roof, brick exterior and some windows. Water has been seeping in for the past 10 years and offices on the upper level were damaged, Hanna said. The repairs will cost $131,500.

Another significant portion of the money -- $500,000 -- will offset costs the Bethlehem Parking Authority incurred for the purchase of a parking lot that will be used for the Polk Street Parking Garage, although that project is on hold.

The TIF has raised more than $100 million for public improvements to the 125-acre section of the former Bethlehem Steel plant, roughly between the Fahy and Minsi Trail bridges.

Could Bethlehem renew the TIF? Maybe.

City officials are weighing their options for the area, but it likely won’t be another TIF, said Alicia Miller Karner, director of community and economic development.

The city is considering a potential Local Economic Revitalization Tax Assistance program, which would give property owners a break on real estate taxes associated with improvements or new construction.

City officials have credited LERTA for growth in other areas of the South Side, including former Bethlehem Steel land that now features Lehigh Valley Industrial Park VII and the Majestic Bethlehem Center.

The benefit of LERTA is that it isn’t taking money off the tax rolls.

“When you’re talking about LERTA you don’t get the benefit if you don’t invest the cash,” Karner said.

The city is still mapping the potential LERTA area, which would require City Council approval, she said.

“The reality is, there’s been such a change. When they crafted the TIF 20 years ago, no one could anticipate Pennsylvania would license gaming and a casino would land in the middle of the property,” Karner said.

Development of a new tax incentive zone has been delayed somewhat by the coronavirus, which has also put new development into question.

Wind Creek is still planning a $100 million hotel expansion, though transforming the crumbling Bethlehem Steel No. 2 Machine Shop into an indoor water park and entertainment complex is now on hold.

Morning Call reporter Christina Tatu can be reached at 610-820-6583 or ctatu@mcall.com.

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