Council members on Sept. 16 pressed city administration to reopen talks with the owner of the Martin Tower site after learning the developer has scaled back previously announced plans and is not building while interest rates and construction costs remain high.

Councilman Callahan said the property has sat undeveloped for years and that, when the owner previously discussed the project with council, the developer had proposed an in-lieu payment tied to a LERTA tax-abatement package and had offered land for affordable housing. “Option a, we do nothing, or option b, we get land for affordable housing, we get money for affordable housing, and we get 50% of the new value over a 10‑year period,” Callahan said, urging the city to pursue an agreement rather than leave the site idle.

At issue: the developer’s earlier concept included up to 1,700 units under earlier zoning assumptions and a substantial in-lieu payment; according to council discussion, that number is now well under 900 units and the developer will not proceed while financing and building costs remain high. City staff said the property is a large and unique parcel, that the city itself does not own land zoned and identified for affordable housing, and that the administration has had some ongoing conversations with the property owner.

Why it matters: Martin Tower is one of the larger developable tracts within Bethlehem. A negotiated agreement could yield land set aside for affordable housing plus in-lieu payments and new tax revenue if the project advances; staying idle yields no tax revenue and little short-term housing benefit.

What council members said
- Callahan urged the city to re-open talks and suggested a LERTA zone could secure both land and millions in in-lieu funds, noting the property has produced no tax revenue while undeveloped.
- Other council members cautioned that any tax abatement via LERTA is a taxpayer subsidy and that details such as the number of units, parking structure requirements and payment-in-lieu formulas affect whether a deal is prudent.

What staff said
Director Laura Collins said the city does not own developable land identified for affordable housing and that an earlier LERTA discussion had contemplated a payment-in-lieu formula (previously discussed figures near $52,000 per unit under one formula). She said the developer had previously proposed 1,700 units under older zoning assumptions but had told city negotiators it now plans fewer units (figures cited in the meeting referenced roughly 880 units as a current planning target), and that the developer had already used remediation grants to abate asbestos and build two medical office buildings on the site.

Next steps and constraints
Council members asked administration and the mayor’s office to re-engage with the property owner to determine whether a land-and-payment package remains possible under current market conditions. Staff cautioned that a LERTA is a multi-year tax-abatement program that reduces municipal tax receipts in the near term and that any payment-in-lieu proposals and acreage offers must be negotiated carefully.

Ending note: council members on both sides said they want the long-vacant site to produce housing and tax revenue, but they differed on the appetite for tax abatements and on how quickly a complex, multi-ownership redevelopment can be advanced.