Bethlehem, Pa. — Council members on Sept. 9 pressed city officials and discussed whether the long‑vacant Martin Tower property could be used to create affordable housing if the city granted a LERTA tax abatement, but city staff said the developer has reduced its proposed scale and is unlikely to build until financing conditions improve.

Councilman Kevin Callahan urged administration to resume talks with the property owners about an earlier offer that reportedly included land donations and millions in in‑lieu payments if the developer received Local Economic Revitalization Tax Assistance (LERTA). City staff responded that the property owner’s plans have been scaled back from earlier proposals and that the city does not currently own identified parcels of land suitable for affordable housing.

Why it matters: Martin Tower is a large, developable tract in Bethlehem with potential to add many housing units if a large‑scale redevelopment occurred. Council members said that underused land of that size is rare and that any negotiated package that included land or cash for affordable housing would be worth pursuing; staff and other council members cautioned that the project’s economics and tax abatements carry costs and tradeoffs.

Key points from the discussion

- Developer interest and scale: Council members said developer proposals discussed in previous years ranged as high as 1,700 units; city staff said the owner is now proposing a much smaller build (comments indicated roughly 880 units in current thinking) and that interest rates and construction costs have delayed activity.

- LERTA (tax abatement) mechanics: City staff reminded council that LERTA is a tax abatement program that reduces city tax revenue when used; earlier discussions envisioned payment‑in‑lieu formulas tied to units, and some council members said an earlier memo referenced millions in contributions from the owner if the abatement were granted.

- City land availability: The director of Community and Economic Development told council the city does not currently own identified land for affordable housing and that developable, privately owned residentially‑zoned land in Bethlehem accounts for less than 2% of city acreage.

- Options on the table: Council members suggested two basic choices — do nothing and let the property sit vacant, or negotiate an abatement package that would secure land and money for affordable housing. Staff emphasized that any LERTA would reduce short‑term tax revenue and that the city generally does not do one‑off LERTA deals without careful policy consideration.

Public commenters and council members also raised alternatives such as pursuing tiny home or accessory dwelling solutions on private parcels, and whether temporary or regionally located safe camping or tiny‑home communities could be part of the response to the housing crisis.

Next steps

Council members asked administration to continue conversations with the property owner to determine whether the owner’s reduced proposal could still include land donations or sizable in‑lieu payments and to report back on options. No formal council motion or vote was taken on Martin Tower at this meeting.