Arena developers did not say how much money from the tobacco tax will help to strengthen the development around the hockey arena complex Allentown, but they recognize that it is so much money that cigarette-selling wholesale generating company is prohibited from leaving the zone of the arena tax.
Downtown Wholesale, wholesale cigarettes, with headquarters in the area Neighborhood Improvement Allentown, will be held hostage in the area until the city pays the credit he should build its $ 158 million hockey arena for the Phantoms minor league. This is the only company that can never leave, in accordance with the contract master developer conditionally approved last week the Allentown Commercial and Industrial Development Authority.
“Well, I would not use the word hostage, but yes, City Center Wholesale is contractually obligated to remain in the bottom,” said the lawyer ACIDA Jerome Frank. “Downtown generates a large amount of revenue Bottom. Basically it protects and provides a revenue stream.” Downtown Wholesale officials will not say how heavy the flow, but also a unique 130-acre tax Allentown district is designed to collect all state and local taxes except for property taxes, for use in the construction of the arena and surrounding development. And a few things generate state tax dollars as sales of cigarettes.
For each pack of cigarettes sold in the state with the $ 1.60 tax on tobacco. In 2010, the city center east of Allentown purchased wholesale basis Dorward Wholesale and moved it to the area, Dorward sold 4.5 million packs of cigarettes and cigarette state tax is paid $ 7.2 million in 2011. State Department of Revenue officials said that the sale of cigarettes to happen to improve the areas of tax revenue a cigarette, to be eligible for use in construction-related arena. Most of those 4500000 cigarette packs were sold outside the zone. However, City Center has created a wholesale model, which allows for much more sales occur in the zone before they are delivered in dozens of outlets.
Downtown Wholesale is a subsidiary of City Center Investment Corporation, which is co-owner Joe Topper. Topper also owns Lehigh Gas Corporation, which operates 180 stores and gas in six states, including 45 in Pennsylvania. This allows you to buy their gas Lehigh cigarettes to the new City Centre Hall Street Wholesale warehouse in the tax area, in front of the distribution of its stores. If the distributor of cigarettes store is created in the area of the neighborhood, where the improvement of their customers pick up their cigarettes, the tax on these transactions fall within the zone, regardless of where the retail stores, said the State Department of Revenue spokeswoman Elizabeth Brassel.
Investment Officials Town Center would not discuss how much Bottom entitled to a tax wholesale company generates, but ACIDA CEO Scott Unger said that, as expected, millions of dollars a year. That’s why city officials Investment Centre, in its development agreement with ACIDA, agreed to hold a cigarette seller in the zone as long as it exists, which is expected to be the 30th year of his life in bonds to be sold to pay for construction.
“This company produces a significant amount of revenue and income plays an important role in assisting in financing the project arena and related development,” Unger said. “This ensures that the developer pays a share of the cost.” City Centre investment is stills the only developer that has been approved to improve the revenue area. It was suggested that three office buildings and a hotel totaling $ 200 million in investments and was approved at $ 135 million line of credit that can be returned to the tenant area of increasing income tax.
Under the agreement, the master developer to get approval ACIDA that line of credit, City Center Investment agrees to pay at least $ 3.8 million per year to finance a portion of the arena complex, which will be used for hotel guests and office tenants, such as parking deck, the setting for banquets and restaurants. Downtown Investment Chief Operating Officer Jim Harbaugh said that the company offered a stipulation that the city center remain in the wholesale area. He did not comment on how much revenue it generates, but said that it is more convenient to require wholesale company to stay in the area because it has only 20 people.
“Lehigh Gas $ 2 billion a year business with a place in six states,” Harbaugh said. “It would be unfair to require her to stay in the area for 30 years. Anything can happen. Center City Wholesale made the most sense.”
In fact, ACIDA stated that it makes the most of the dollars and cents.