Authority: PPL Plaza Hurt by ‘Bad Business Judgment,’ Not NIZFebruary 23, 2016 – In The News
Gerald E. Arth was featured in The Morning Call article, “Authority: PPL Plaza Hurt by ‘Bad Business Judgment,’ Not NIZ.” Full text can be found in the February 23, 2016, issue, but a synopsis is below.
According to federal court documents filed Monday by the Allentown Neighborhood Improvement Zone Development Authority’s (ANIZDA) attorney, the owners of PPL Plaza can’t blame ANIZDA for their financial troubles.
“Any future inability of [PPL Plaza's owners] to meet its debt service will be due to plaintiff's bad business judgment in purchasing PPL Plaza at the height of the real estate bubble in late 2006, not anything ANIZDA did or did not do,” wrote Gerald E. Arth, ANIZDA’s attorney.
Opened in 2003, the office building’s future seems uncertain because it has only one significant tenant. With a balloon payment due at the end of the year, the building’s owners filed a federal lawsuit against ANIZDA and several city and state officials, arguing that ANIZDA unfairly devalued their $92 million investment.
ANIZDA rejected each of the owners’ arguments in its formal response, suggesting it shouldn’t be held responsible for the owners’ decision to buy the building for an inflated price.
If the owners’ lawsuit is accurate, the owners have profited substantially since owning the building, Arth wrote.
“Plaintiffs and its partners have not only been repaid all cash they invested in the purchase of PPL Plaza, but have made a profit of nearly $5.5 million during the course of plaintiff’s ownership,” the lawsuit says.
In its legal filing, ANIZDA says it has tried to keep Talen Energy, the lone significant tenant at PPL Plaza, from leaving the city.
“ANIZDA admits only that public officials have sought not just to keep Talen in the NIZ, but more broadly, keep it in the city of Allentown or Pennsylvania, since Talen has indicated publicly that it was entertaining offers in New Jersey,” Arth wrote.