City of Allentown raises questions with high real estate seizure prices
3/2/2012 | Real Estate Blog
Our Philadelphia readers may be aware of the new hockey arena to be built in Allentown. The new arena will reportedly be a multi-purpose complex, and is estimated that it will cost $160 million. The complex is set to open next year.
Interestingly, the city has had to make use of eminent domain powers to seize private real estate getting in the way of the project. The city of Allentown has paid $15 million to property owners located in the zone where the arena is to be built, and some are criticizing the city paid too much.
Some property owners were apparently offered far more than what they originally paid for the buildings. One business owner who paid $150,000 for his building five years ago reportedly received $852,000 for the building and relocation expenses. Another was paid $747,000 for a building for which he paid $400,000 only a year ago.
Critics are pointing out that taxpayers are ultimately the ones who will suffer from the high payments.
It hasn’t yet been determined for certain whether the city has overpaid the residents, though, as the city has not yet released the appraisals for the properties. Some say the city has not been transparent about the matter.
City officials defend the payments, though, saying that the appropriate amounts were paid. They also note that the pending development had the effect of raising prices in the district.
There has been speculation, as well, that the city paid as much as it did for the properties in order to avoid litigation.
Source: Fox News, “Pennsylvania city pays big bucks to buy off businesses, clear way for arena,” February 24, 2012.