Council Minutes

May 18, 2005 Meeting Minutes

BETHLEHEM CITY COUNCIL MEETING
Bethlehem, Pennsylvania
Tuesday, May 18, 2005 – 7:30 PM – Town Hall

1. INVOCATION
2. PLEDGE TO THE FLAG
3. ROLL CALL

President J. Michael Schweder called the meeting to order. Pastor Don Quayle, Christ Church – United Church of Christ, offered the invocation which was followed by the pledge to the flag. Present were Ismael Arcelay, Jean Belinski, Robert J. Donchez, Joseph F. Leeson, Jr., Gordon B. Mowrer, Magdalena F. Szabo (arrived after the Roll Call), and J. Michael Schweder, 7.

Citations – Honoring David Schwartz and John Stefancin

President Schweder advised that the Citations honoring David Schwartz who retired from the Fire Department after 25 years and John Stefancin who retired from the Fire Department after 20 years will be forwarded to them since they were unable to be present this evening.

PUBLIC HEARINGS

Economic Development Liquor License – Sun Inn

Prior to the consideration of the regular Agenda items, President Schweder called to order the first Public Hearing to consider a request for an Economic Development Liquor License for the Sun Inn.

Jim Schantz, Executive Director of the Sun Inn Preservation Association, requested consideration of City Council for the privilege to obtain an economic development liquor license from the Pennsylvania Liquor Control Board (LCB). Mr. Schantz said the concept as developed by the LCB is a fairly new one, only four applications have been considered before the LCB to date. Mr. Schantz, explaining some of the details of this license, stated that Act 141 of 2000 and Act 10 of 2002 amended the Liquor Code to allow the LCB to issue a restaurant or eating place retail dispenser license for the purpose of economic development. The LCB can grant up to two licenses per county per year. Before issuing such a license the LCB has a few basic requirements that the applicant must follow. He said one is that a license will be issued when the applicant has demonstrated that it has exhausted reasonable means of acquiring a license in the county. The question to ask is what constitutes reasonable means. Mr. Schantz stated that two years ago he was before Council to request for an applicant an Intermunicipal Transfer of a Liquor License into Bethlehem and the purchase price at that time for the license was $72,000. He said today that licensee would gladly sell his license at the current market rate which is between $125,000 and $150,000. Mr. Schantz stated the reason the licenses have doubled in value is partly because Northampton County has been blessed by economic growth along the Route 33 corridor. Six chain restaurants have either opened or plan to open their doors shortly. This demand for licenses caused a current market rate to double in this short time. Licensees know that if the right chain comes along they would be able to request this price from the chain and sell their license for the asking price. The LCB can provide upon request of an applicant a listing of all the licenses currently in safekeeping with the LCB. These are licenses not in current use for one reason or another. By code, any establishment that closes its doors for longer than 15 consecutive days is required to place their license in safekeeping with the LCB. That listing includes establishments that are closed, remodeling, up for sale and/or have been approved under prior approval. The current listing has 23 restaurant liquor licenses in safekeeping. Of this listing there is one and possibly more that are transfers pending, 2 licenses that are waiting to open their doors and one or possibly more that will be sold only with the real estate that is attached to the license, and one license for the former Nazareth Speedway. When this list was cross-referenced with the prior safekeeping list from November 2004, 11 of those licenses appeared on both lists. When previously contacted, none of these 11 was available for sale. There currently might be only one license available for sale from this listing and the asking price for that license is rumored to be between $125,000 to $150,000. The question is now raised and addressed to ask the reasonability of that asking price. Considering the going price is now doubled the $75,000 of two years ago and is triple the $50,000 rate of the economic development license cost, it is very easy to argue that the Sun Inn Preservation Association does have a difficult time in obtaining a license at a reasonable rate. Mr. Schantz explained the second requirement by the LCB is that Economic Development Licenses may only be issued to premises that are located in an Enterprise Zone, a Keystone Opportunity Zone, or in the municipality where the municipality has voted to grant the issuance of such a license for the purpose of economic development. One of the elements that make Bethlehem a tremendous place to live and work is the diversity of our economy in our City with the tremendous role being filled by the tourism industry, and with Musikfest and Christkindlmarkt, literally one million visitors enjoy our downtown district. Our historic district is second to none in this region. Mr. Schantz said by adding a restaurant that can take an active role in the historical district by offering a historically accurate menu complete with a historic presentation of that menu the chances for economic growth increase dramatically. A restaurant in the historic Sun Inn would stimulate the tourism factor for the entire historic district giving visitors a chance to experience dining in a true colonial setting. Representatives of the Board of Directors of the Sun Inn, Forrest O’Brien, Chairman of the Board, and Bob Wilkins can also speak to the prospect of the proposal of the restaurant as well. Mr. Schantz, giving a brief explanation regarding the license itself, said according to Section 463 Subsection 6, this is a non-transferable license that is issued by the LCB with regard to ownership and location. The cost of the application is then $50,000, about the same rate that the average transfer was when this legislation was enacted. A possessor of this license cannot turn around and sell the license for a quick profit. The license must operate under a strict guideline with regards to the percentage of food sales versus alcohol sales. That percentage figure must be maintained at 70% food or higher, less than 30% alcohol. If the ratio falls below that 70% food mark, the LCB has the right to recall the license. Mr. Schantz thanked City Council for their consideration of the request for approval of a resolution of an Economic Development Liquor License for the Sun Inn Preservation Association.

President Schweder asked Mr. Schantz what his definition is of economic development, and asked if the legislation provides for what the definition of economic development is. Mr. Schantz said he does not know how the Code defines economic development. He said he could not give an accurate definition, but he said as far as the spirit that the legislature intended when this legislation was drafted, it was realized that there would be situations where there would be no licenses available. Several years ago when there were no licenses available a community had the option to apply as a resort community. A resort community could create a brand new license. He said resort licensing was done away with several years ago and that gave the LCB no option to create new licenses, especially in an area where a restaurant wanted to locate where they could not find a license. This Act gave them the chance to actually go in, create a new license, and put it in that community in order to help spur the economic growth in that community.

President Schweder asked what is unique about the Sun Inn that wouldn’t be true of any other building downtown to get this liquor license. Mr. Schantz said he thinks it is the whole spirit and the whole nature of the Inn itself, and that it operates as a non-profit organization and is a museum as well. President Schweder asked when talking about an economic development license, what is unique about this business from any other business downtown seeking to have a license claiming that it would enhance economic development on Main Street.

Forrest O’Brien, Sun Inn Preservation Association, stated that he thinks what is key to the economic development issue is the type of restaurateur they are trying to bring into town. When the last restaurateur left suddenly, Mr. O’Brien said he told the Board they would not bring anybody in town unless it was somebody significant who would have the wherewithal to be able to bring people down town. He said the gentleman who has provided a contract who they will negotiate with once they have a liquor license is Walter Staib of the City Tavern, who, he said, could not be here tonight. He said Mr. Staib is unique in that he is internationally known, he is on major network television a couple times per month, and he will advertise Bethlehem and the Sun Inn along with the City Tavern. Mr. O’Brien said with just one article last year in the New York Times mentioning the Sun Inn, he had phone calls asking whether it was open yet and could they come. Mr. O’Brien said he has the ability to pull people in from within far reaches of this region and beyond.

President Schweder said he appreciates that but it didn’t really answer the question. He said as best he can tell from Mr. Schantz’s presentation is that there are liquor licenses available but at a price they don’t want to pay. Mr. Schantz replied that they are at a price that some organizations cannot afford, and commented that he thought that right now key to any restaurant is the availability of alcohol. He said he thinks those that have gone BYOB usually wind up going out of business within a year. The cost of a license alone prohibits most developers nowadays from even attempting to venture into the restaurant business. They are spending $150,000 on a piece of paper before even being able to serve platter one. He said for an organization like the Sun Inn its economic viability almost forces them to go to another route with regard to this.

Mr. O’Brien added that he also looks at economic development in the ability to go and bring people to the downtown area. He said when he talked to some of the other restaurateurs over a year ago, they were all very supportive of the fact that was what they were trying to do and to bring somebody significant into the area. President Schweder asked if it is fair to other businesses in this community that another avenue is being taken to get a liquor license at this point, when there are liquor licenses available, but they are just at a price that they either cannot or don’t wish to pay.

Mr. Schantz said the nature of this license should be looked at as well because there are a couple of things that distinguish this license from other licenses. The Sun Inn can never sell this license, but another liquor license can be sold for any asking price. He said if he wants $2 million and someone is willing to pay $2 million, it is a done deal. The Sun Inn can be offered $2 million for their liquor license and they cannot transfer it, the license cannot leave that building. He said many restaurateurs may not be attracted to this type of license because of that nature of it alone. He said a restaurateur cannot resell this license. President Schweder said he understands that, but said it is an advantage being afforded. He said when you read the law, it says that if you have the opportunity, and according to the printout from the LCB, there are 19 licenses that are in escrow currently in the county. He said he understands that some of those may not be up for sale, but by what has been admitted that has not currently been exhausted.

President Schweder asked why the Sun Inn no longer has a license, since it did have one in the past. Mr. O’Brien replied that the license had to be leased to the restaurateur. Once the license is leased, the LCB changes the name on the license and only communicates with the restaurateur. The restaurateur did not, without the knowledge of the Board, renew that license. He said, in fact, the communications between that restaurateur and the Board continued, and it was not realized that it had gone into history. Also the restaurateur had owed back taxes when they ceased operation, so that issue is complicating that license.

President Schweder stated that going back in history in the 1970’s Mayor Mowrer secured a grant for a performing arts center in downtown Bethlehem that was supposed to be built at Broad and Main Streets. President Schweder said after Mayor Marcincin replaced Mayor Mowrer, Mayor Marcincin came to him, as a State Representative, and asked that the grant be converted to the restoration of the Sun Inn and the Grist Mill, which was done. Part of the agreement at that time that Mrs. Hughetta Bender agreed to was that there would never be either a restaurant or a liquor license in the Sun Inn at that time. What the buildings were to be used for were performances by individuals and young people in our community and to serve as a historical resource to the community. He said it was pretty evident at that time that that was not to be the use of the Sun Inn. He said he didn’t know if they were aware of that or not, it probably predates anyone currently serving on the Board, but that is what was discussed with the Department of General Services at that time when the grants were redirected to the restoration of the two buildings.

Mr. O’Brien said he was not aware of that language, but said he was aware of them going for the economic development license, but not the language about the initial acquisition of the money from the State. Mr. Schantz said that comes as a total surprise to him tonight. President Schweder said records could probably not be found because the people agreed to it at that time with the State and it was done orally.

Mr. Leeson stated that, pertinent to President Schweder’s inquiry, there is an agreement that was executed between the Sun Inn, the City of Bethlehem, and the Department of General Services, which he said he does not recall the contents of, but requested that before the vote on the matter the Law Bureau forward a copy to be circulated to the Members of City Council.

Mr. Leeson, on the issue of economic development and going back three or four years, said Mayor Cunningham made a request of the Sun Inn, in which he was involved at the time, to help the City with economic development in the area of coordination of festivals and events. The idea was to have a one-stop shop point in the City for when a festival comes to town, to set up in the courtyard, on Main Street and the historic area, and the City could coordinate all those festivals. Discussions were opened with the Sun Inn in the spirit of trying to get cooperation to coordinate this, and the discussions continued on and off, agreements were exchanged back and forth. Mr. Leeson said the cooperation of the Sun Inn was essential because the ownership of the Sun Inn Courtyard is divided up among three parties, and it looks like a puzzle when you look at it on a map. Mr. Leeson said the City was not able to put that all together with the Sun Inn’s cooperation and assistance. He said he wonders if those discussions have ended or if they are ongoing and where does all that stand.

Charles Brown, Director of Parks and Public Property, responded that it is a matter of the Sun Inn and the City and control of the area, and that is what the problem is. He said he thinks he should sit down with the Mayor and come up with a plan and go to the Parks Committee and address it and bring it back to Council. He said the matter is “dead flat” where it was left, and nothing has moved at all. Mr. Leeson added that a related problem has to do with the maintenance of the Courtyard which really leaves something to be desired. He said the City has historically been reluctant to invest a lot of time and money in keeping up the Courtyard when the City didn’t control it and the Sun Inn retained control over a major portion of that. He said that is essential to the downtown and could really be significantly enhanced over what is there now in a maintenance context. He said a large portion of it is publicly owned, but not all of it. Mr. Leeson said when talking economic development we need to be receptive to all economic development issues on the table, and this is one unresolved, and said he would like to see it get resolved. Mr. Brown said that possibly by the next Council meeting he could get something prepared with the Mayor and present it to Council. Mayor Callahan stated he did not know if it could be ready by the next Council Meeting, but said he has had discussions with the Sun Inn Board about this issue. He said it is the ownership or control of the Courtyard that is a bit of a sticky wicket given the puzzle pieces. He said the Redevelopment Authority owns a portion, the City has a right a way along the road, and the Sun Inn owns a significant portion as well, so it is somewhat complicated in terms of ownership and control. The Mayor said the Sun Inn has come to the City requesting that the City provide some assistance in terms of maintenance. Mayor Callahan said he thinks the Sun Inn Courtyard is underutilized currently and could be much more of an asset for the downtown. He said it does require a fair amount of maintenance and the City does not control the Courtyard, so the City has been reluctant to try to take that on as a task given the other issues and responsibilities that Mr. Brown has currently with the other City parks. Mayor Callahan said the City is willing to cooperate with the Sun Inn Courtyard provided the City has some input or control as to the events that they place there. He said people drive by the Sun Inn Courtyard and assume it is a City property. We are only going to let it get so bad before we step in and assist, and we have done that and we do it on an ongoing basis. He said we don’t want to formally take on that responsibility right now. Because of its central location and its importance to the downtown, the Mayor said he knows Charlie Brown makes an effort to make sure it has some level of respectability in terms of its maintenance. The Mayor said part of the problem in developing more of a long term plan for the Courtyard is that it is heavily utilized by delivery trucks and he said he would like to make a significant investment into the Courtyard. He said when it rains it gets very muddy back there and is used by garbage and delivery trucks for the restaurants, etc., that don’t have easy access from the front of the building. He said he is trying to develop some sort of a plan to limit, in particular, the garbage collectors to try to limit the wear and tear on the Courtyard itself so that it can become more of an amenity. Mayor Callahan said it does not make a lot of sense to continue on a year in and year out basis to invest a lot of money there if it is not going to be maintained and the trucks are going to continue to cause problems. He said the City is going to continue to work with the Sun Inn in that regard, but it is complicated given the Sun Inn and the City’s resources. The Mayor said he did not know if they would be able to have an answer by the next Council Meeting but they will continue to work on it.

Mr. O’Brien added that the Sun Inn gained control of their portion of the Courtyard from the City. When it was put in approximately 23 years ago, the Sun Inn gave right of use of the Courtyard to the City and the only request was that the Courtyard be maintained as it was originally put in place. He said that also hasn’t been done. The traffic started in the Courtyard three administrations ago when it was decided to put garbage collection inside the Courtyard, and that originally it was not inside the Courtyard. Mr. O’Brien said their garbage man would take their barrel down to Main Street and most everybody else would bring it outside of the Courtyard on Walnut Street. Mr. O’Brien said his request three administrations ago, because they are non-profit and do not have a great deal of resources, was that it would be brought back in some period of time to the condition according to what the original contract was. He said they have been trying lately to go in with their own resources to go in and clear it out. He said what is complicating the situation is the fire and the maintenance over the winter. The Courtyard took a severe impact with all the trucks that were allowed back in there so that the restoration of the buildings could be achieved. He said the main building on the corner still needs to be done. The Sun Inn is more than willing to open up either Courtyard to facilitate the reconstruction of anything that is damaged on Main and Broad Streets. He said they also need assistance from the people who have to have that work done and the Mayor has offered to assist in the north Courtyard because they are going to allow the contractor to utilize that. He said that is the history and what was asked for over three administrations ago. Mr. O’Brien said when he talks about economic development he talks about being able to bring people and interest into the community that doesn’t exist today. He said whether or not we agree on how the Inn has been handled in the past, Mr. O’Brien said what is key is to bring someone in with a stature that people take notice of who is downtown, and he said he thinks Walter Staib is that person. For the liquor license, he said Mr. Staib has the sole rights to the brewing of George Washington and Thomas Jefferson ales. Mr. O’Brien said he is the sole person importing the same wine that Jefferson imported from France and you can read his books about 1700 cuisine and the history of dining in this country. He is a significant individual, the City Culinary Ambassador of Philadelphia, does the major renovations of new operations for Hilton and other large chains, has started over 350 restaurants, and the consultant for two major cruise liners. Mr. O’Brien said he cannot think of anybody else out there that he has met, and said they have met many people who are interested, that have the qualifications and the ability to give us a window where we don’t have a window now, to bring people into Bethlehem.

Mr. Leeson said he would like to close his remarks by sharing a perspective. He said the City went to the Sun Inn four years ago and said they have a problem that is important. He said it is still not solved, and said he would like to see that solved before this matter comes up for a vote.

Mrs. Belinski stated that she has stayed overnight at her sister’s house on North Street and has had to call 9-1-1 because of the carrying on when 40 West on Broad Street leaves out. She said her understanding is that the lease is not going to be renewed and that liquor license will be available. She asked why can’t that liquor license be transferred to the Sun Inn. She also said that if Mary’s Shamrock Inn on Wyandotte Street closes down, that license will be for sale, and asked why can’t that one be transferred to Starter’s.

Mr. Schantz responded that the restaurateur with regard to 40 West does have his license for sale for $150,000. Mr. Schantz said that if the Board considers that to be a reasonable rate for the license, there is nothing the Sun Inn can do about that. The situation with Mary’s Shamrock Inn is that they are in the process of a pending transfer and the pending transfer was approved by the Liquor Control Board, the group opposing the transfer has sued the Liquor Control Board with regard to the transfer that took place of that license. He said that license is at a standstill and nothing can be done with that one until the lawsuit has been resolved. Mrs. Belinski asked what is the time line on that. Mr. Schantz said that is not even scheduled for court yet.

Mr. Mowrer said he was very involved with the Sun Inn, as was President Schweder, and from what he recalls is that from the beginning they wanted to have a restaurant in there. President Schweder said there is no question that Mrs. Bender wanted to have a restaurant in there, but as the Governor said we don’t spend a million and a half dollars to build new restaurants. Mr. Mowrer said he was not aware of the Governor’s comments.

Mr. Schantz, addressing that issue, said at the time the Sun Inn was completed, there were no liquor licenses available. The Liquor Control Board at that time had the avenue of going to a resort community. Bethlehem was deemed as a resort community in order to create a new license for the Sun Inn in order to have one. He said from his understanding that was done with the Governor’s assistance, in order to create a new license especially for the Sun Inn itself at the time.

Ms. Szabo, recalling that some years ago the Sun Inn had recipes that included John Adams’ favorite foods, communicated she would very much like to get the recipe for the cranberry pie, and she approves of the restaurant.

Ms. Szabo asked if there was still a school in the building at Main and Walnut Streets facing onto the Courtyard because she thought that liquor licenses were not allowed within a certain area.

Mr. Schantz said the Inn falls under several unique situations because technically the Inn had been previously approved for a liquor license prior to that school going into there. He said this application would require a posting by the Sun Inn to be done; an investigator would have to come out and ask the questions with regard to what restrictive institutions are within a certain radius of the Inn. He said that school would be listed on the application, and the investigator would go out and investigate the school. Mr. Schantz said what make this situation interesting is that since it had a prior liquor license, the location had already been approved for a liquor license by the Liquor Control Board, and under the circumstances, he said he doesn’t know what kind of impact that prior approval would have with regard to a new application, since a license had been in that premises once before. He said that factor alone may weigh in favor of the Inn to have another license granted there. Mr. Schantz said the mere fact that the school is within the radius does not necessarily mean that the Board has to reject the application. He said they can reject it, but the language of the code says they do not absolutely have to reject an application along those guidelines.

Ms. Szabo asked if the school was there when the license was there before. Mr. O’Brien responded that they were still operating with the license when the school came in. Ms. Szabo questioned the amount of $150,000 for a liquor license and thought that the Liquor Control Board controlled licenses, and therefore set prices. Mr. Schantz commented that a liquor license in the open market is up to the seller, it is supply and demand. If the seller requested $2 million and you found someone who wanted to pay $2 million for license, then the sale price could be $2 million. He said the State record is somewhere in the neighborhood of $500,000 when one of the large chains, possibly a TGIFridays, wanted a license in Dauphin County, they were willing to pay $500,000 for that license. He said currently it is a market driven price. The six chains that have come in along Route 33 have doubled the price of licenses because chains have come in, offer $100,000 to $130,000, the restaurateurs that have a previous license say okay, and that becomes the new market price. Ms. Szabo questioned what 40 West paid for their license. Mr. Schantz responded $72,000. Ms. Szabo said she thought it was $10,000 or $25,000 at the most.

Mr. Donchez asked if there are any economic development liquor licenses in the City right now or if this is a new precedent. Mr. Hanna replied no, this is new. Mr. Donchez questioned if two licenses can be issued per county. Mr. Schantz said two per county per year can be created. He said if two applicants would come forth, the LCB would go by the date of the last issue of the license to start a new year, and another license could not be issued for one year after the date of issuance of a previous applicant. Mr. Donchez asked then if the two before Council now are the two for the whole county. Mr. Schantz responded yes. Mr. Donchez asked if there are 23 licenses in safekeeping and if they are for Northampton County. Mr. Schantz said yes. Mr. Donchez then asked if there were any reserved for potential development for Beth Works. Mr. Schantz answered that there is still a plea before the Liquor Control Board for 10 licenses as part of the last remaining resort request plea for the Bethlehem Works Development site that has not been resolved before the LCB. He said a preliminary hearing was held with regard to the site and it has been tabled until such time when a new plan can come forth and a developer can actually present it because the Beth Works site changed hands and concepts several times. The plea is still there but they will have to go back and start that hearing procedure all over again. Mr. Donchez, saying then as of today there are 10 licenses reserved for Beth Works, asked if that is 10 out of the 23? Mr. Schantz said no, the Beth Works request is a separate request all unto itself. Mr. Schantz added that if that request fell through, the economic development licenses could be used for a situation like Bethlehem Works where a licensee could come before the same body, make a similar type of request, and could ask for a license to be put into an area like Bethlehem Works.

Mr. Donchez read from Advisory Notice No. 20 of the Pennsylvania Liquor Control Board dated June 5, 2002 regarding criteria for applying for an economic development license: “First and foremost, a license will only be issued when an applicant has demonstrated that it has exhausted reasonable means of acquiring a license in the county.” Mr. Donchez asked Mr. Schantz what has been done to exhaust all reasonable means to try to get this license. Mr. Schantz said again, there are 22 licenses in the safekeeping list, 11 of which have been previously contacted back in November or December, and of those 11 none were available at that time, those are still on the list of the 23. He said again there is one under a pending transfer, 2 that are waiting to open up that are separate from those previous 11, and one that is being sold with the real estate only. Mr. Schantz said that of those 23, there might be one that is available by Mr. Dieter and believes the asking price is $125,000. He said he tried to contact the owners of Reyray to see if their license is available, and the last time he said he spoke to them they were at a price of $125,000 to $150,000. He said there is a license available with Nazareth Speedway, a restaurant license, and he was unable to get a hold of International Speedway who was the actual owner, to find out if that would be available or not. Mr. Schantz said at one point or another the list has been fairly well contacted and exhausted with regard to availability. He said he could find only one possible available, and one definite available not even on the list, and both were asking at least $125,000 to $150,000 for the license.

Mr. Donchez said there was a license there before that was approved, but now the Sun Inn no longer has that license. He said he wonders about getting a license in the name of economic development for $50,000. Mr. Donchez said when he thinks of economic development he thinks of areas that are so-called “depressed” where you need economic development to bring in traffic, etc. He said he feels we are blessed that our downtown is vibrant and questions getting the license in the name of economic development for this location rather than getting a license and paying the full amount, but he said he understands the dollars and cents would be with the Board. Mr. Donchez, referring to Walter Staib who he said obviously has a very impressive resume, asked if the agreement with him is verbal or written. Mr. O’Brien replied that he has a written contract Mr. Staib sent to him that was to be negotiated, but without having a liquor license in hand he would not want to waste his time. Mr. O’Brien said Mr. Staib is interested in coming here and part of that is having a liquor license so he can. He said he is the only person who has come to Bethlehem repeatedly to meet, and has brought staff who are trained and to show what he does. Mr. O’Brien said he has no doubt in his sincerity in wanting to come up but he is looking to see that everything is in place so he can, and the stumbling block is the liquor license.

Mrs. Belinski commented that some years ago this same idea was tried at the Sun Inn with the colonial era type foods. She asked what happened to that. Mr. O’Brien replied that what he told the Board was that they would not bring in a restaurateur on good intentions. He said he interviewed about seven or eight different restaurateurs. He said he could put them into two groups, one group that said everything was perfect with the Inn and they would start up tomorrow, and another group that gave him a laundry list of what had to be done to the Inn along with the liquor license to make it a viable operation and be a viable part of the City. Mr. O’Brien said the one group that was ready to roll did not have any expertise or past history in running a full service restaurant, but everyone on the latter list were very experienced people. He said there was only one group in the Inn that really knew what they were doing, and that was the Holts, who now own the Apollo. Mrs. Belinski asked why they left. Mr. O’Brien said they left because of a disagreement with the Board back then, quite a few years ago, on when to be open. He said when he looked at that he told the Board members at the time that they cannot dictate to a business that they are going to lose money. So if they tell you that they cannot make money on Tuesday afternoons, then you listen to them and you close, so it is viable to them. Mr. O’Brien said he was not on the Board, but that is what he understands. He said there are only two board members left that were on the Board back then. He said a few of the older Board members were rather rigid in what they wanted to do. Mr. O’Brien, referring to the Colonial, said he feels that they did try. He said that when the White House wants authentic Colonial garb, they call Walter, they don’t call Williamsburg. He said they never had what they would have with him here, when it comes to Colonial garb. Everything in the City Tavern you can purchase and is licensed by qualified craftsmen and everything is done exactly the way it was done in the 1700’s. He said they do not have that here either. Mrs. Belinski commented that if the Sun Inn is willing to put all this money into getting this expert, she doesn’t understand why they can’t pay $150,000 for the license. Mr. O’Brien explained that if they pay $150,000 for the license, he said he cannot renovate the kitchen, and the kitchen has to be renovated because it is over 20 years old. He said they don’t have the money to do that.

Mr. Mowrer commented that the uniqueness of Bethlehem is its history and he thought the whole turnaround for the downtown was based on trying to bring everything back as much as we could to its original. He said that is what National Heritage recommended, and the Sun Inn was a major part of that. Mr. Mowrer said he thinks the City should bend over backwards to help any historic group we can to continue that process so that people from outside can come into the City and experience Bethlehem and its history. He said this is a unique gem we have in our downtown that helps build on that and anything we can do to help them in that process, we would be helping to revitalize our downtown and build that foundation based on history. Mr. Mowrer said he feels fairly strongly about that.

Ms. Szabo agreed with Mr. Mowrer and said she thinks it is a good idea to have that type of restaurant in Bethlehem, not only for the historic value, but for the goodies, too. She said what bothers her is that this type of license cannot be sold. Mr. Schantz said the license cannot be sold or transferred; it is actually tied to the building itself, and to the operation of that building. Ms. Szabo asked then why did the tour group demand that it be transferred to their ownership. Mr. O’Brien asked if she meant the previous restaurateur. Ms. Szabo said yes. Mr. O’ Brien said they didn’t demand it, the LCB said that the person that was controlling the liquor sales had to own the license, and what you had to do is lease that license for a dollar to them. He said what he found when he traced the history of this was that they leased the license, the LCB changed the name to that restaurateur, and the Sun Inn was cut out of the loop for communications. He said he called the LCB and asked them why, and their response was that they realized it was that way and that was the situation. Mr. Schantz added that this type of setup would prevent that situation from ever happening again, and the Sun Inn Preservation Association would be solely responsible for the license, all the correspondence would go to the Sun Inn Preservation, and it would be the property of the Association as long as the Association was still in business. It could not be transferred out of the Association’s hands, it could not be transferred to any other individual, and it could not be sold by the Association. Mr. Schantz said if they attempted to do any of those things the license would be pulled back by the LCB and cease to exist. Mr. O’Brien said with Walter, they are not talking about leasing the license to another organization or the Sun Inn. He said this is a management agreement they are negotiating with him. He said therefore the liquor license would stay in their name anyway. Ms. Szabo asked who would control the kitchen and get the proceeds, etc. Mr. O’Brien said they would manage the kitchen, their people are trained in Philadelphia, and they would have a manager up here. They would get a certain percentage of what the net profits are once a profit is made. Ms. Szabo said that clears things up a little because Council is being asked to approve the Sun Inn ownership of that liquor license and not someone else. Ms. Szabo again said she would like to look into the school situation, whether today a liquor license can be located next to a school. Mr. Schantz said the Apollo is also probably within 200 feet as the school as well. Ms. Szabo said she thought it seemed a greater distance than that.

Mr. Donchez asked if this license cannot be transferred and it is an economic development license, is there an expiration date on the license. Mr. Schantz said it would be for as long as the restaurateur is still in business and operating as that business. Mr. Donchez questioned what would happen if the restaurant closes and goes out of business. Mr. Schantz answered that it would be called back by the LCB and cannot be transferred to another entity. President Schweder asked if the money is returned by the LCB. Mr. Schantz responded no, the money stays with the LCB. President Schweder asked if that could be checked, since in discussions with people, he did not think that was the case.

Mr. O’Brien added that with regard to what he is trying to develop and bring together, the new Board feels strongly that Hughetta Bender, who basically was the sole person to go and start this process to save the Inn, always saw it as being operated as a human resource and a teaching center and an experience for people to learn how we lived in the 1700’s during the Revolution. He said that Inn has always had a restaurant, it would not have been an Inn in the 1700’s and John Adams wouldn’t have written Abigail back in Massachusetts telling her that the Sun Inn was the finest Inn in the thirteen colonies if it wasn’t for its ale and its venison, probably. Mr. O’Brien said this would help them to grow their organization and to bring something very significant to downtown Bethlehem. He said they are still in discussions with the Partnership and want to work together, and this is only going to facilitate and help the whole organization, and ultimately, all of the historical groups in town.

President Schweder, going back to what was said previously, said he was referring to this as a probationary license. He said they have to prove that they have at least 70% of their sales in food and during that time if they cannot demonstrate that, then the license is revoked and the money is returned. He said after it is made permanent they would not. Mr. Schantz affirmed that was correct.

President Schweder commented that he spent a year and a half trying to do that and bring it about in the late 1970’s and it was a tremendous fight. He said our then State Senator tried to prevent this money from coming to downtown Bethlehem, and a lot of people worked on that. President Schweder agreed with Mr. Mowrer on what he said. President Schweder said he would like to help the Sun Inn find a way, but what he has trouble with is in capitalism is the concern that we are saying to one entity at the expense of all the others that you get something that all the other licensees who are down there in restaurants now are not afforded. He said the only argument he can tell is that capitalism has driven the price of the licenses higher than the Sun Inn thinks they can afford and that is why this is being sought. He said but if that is where the market has taken it, it would be the same as if we decided that people moving in to Bethlehem because the price of homes has gone up significantly that we need to have subsidies for people coming in because otherwise they couldn’t afford to do that. President Schweder said if the Sun Inn can come back to show some reason that is driving this and if the City can feel comfortable that they can do something that doesn’t advantage the Sun Inn over all the businesses that are already here and functioning in the City, then he is willing to support that. He said short of that at this point, he does not think the Sun Inn has made the case for it.

Mr. O’Brien commented that last year when this process was started, before Edge was there, he thought they would be able to get a license through the section of the law that had museums. He said the LCB had told him they were a shoo-in, but then the legal department told them they had to have 60,000 square feet. He said prior to that he talked to the Holts at the Apollo, the Brew Pub, to Neville Gardner, to find out how they felt about the restaurant. Mr. O’Brien said at that time there wasn’t one of them who said they wouldn’t do anything they can to help open that restaurant, it would not be in competition, it is an entirely different venue, and they would like to get the Sun Inn operational so that people come and see their restaurants also. He said not one of them took exception to the Sun Inn trying to get a liquor license at that point in time. Mr. O’Brien said things may have changed with one individual and he doesn’t understand why, but he said he talked to the ones who were significant in that area before even meeting with the LCB the first time.

William Scheirer, 1890 Eaton Avenue, said that his understanding is that the restaurant business there would not pay real estate taxes, so that would be an additional advantage they would have over any other restaurants downtown. Also, he said on the other hand, when you compare $50,000 for a license they want versus $150,000 for one on the open market, and as pointed out the $50,000 cannot be sold, so it is intrinsically worth less than the $150,000 license. He said if they had to pay $150,000 they would be paying for something they would not necessarily want, the ability to sell it. So, whether or not the ability to sell a license worth $100,000 is something else again, and that is something that should be taken into consideration.

Stephen Antalics, 737 Ridge Street, commented that he strongly supports the Sun Inn’s effort, but said looking at it with a fundamental approach, 1700 is a long time ago, and a long time ago American Indians were here and American Indians were given rights categorically to build gambling casinos. In the 1700’s the Sun Inn, which is still the Sun Inn, sold ale and Mr. Adams said this ale was the best in the thirteen colonies. He said to him that is very significant, and the only institution that would compete with this would be the Crown Inn and the Crown Inn no longer exists. He asked what other institution in Bethlehem that serves alcohol has that historical precedent. He says there may be a legal argument here, if alcohol was sold by the Sun Inn in the 1700’s, that was earlier than the Pennsylvania Liquor Control Board, so how can the Pennsylvania Liquor Control Board tell an institution that has been around a lot longer that they cannot sell alcohol. The Indians can do a gambling casino under that precedent, so why can’t the Sun Inn appeal by legal precedent that they were selling alcohol a lot longer than before they were even around. He said there is an insult there. He said the Sun Inn is a name that John Adams spoke and we all know who John Adams is and we respect John Adams. Mr. Antalics said if Mr. Adams drank ale in the Sun Inn, why can’t he. Mr. Antalics said he thinks it is a simple argument and thought that to get politics into this is insulting to the Sun Inn. He said he thinks Council should look at it that way and cater to this group, and feels there is no question here as to what Council has to do. He said they get economic advantage, but it is a historical precedent. He said if the Indians can have a gambling casino, why can’t the Sun Inn sell ale, and that is what should be argued. He suggested that the Sun Inn look at that precedent and see that they are above the law because they were there before the law was enacted, so the LCB is child compared with this elder.

Raymond Bush, 226 East Wall Street, a member of the Sun Inn Board, and attending on behalf of the Sun Inn Board and the community, stated that he shares a love for history and one of the things that attracted him to the City was driving down Main Street on a Christmas Eve and seeing the ambiance and the charm of the town. He said this was not born of glitzy capitalistic ideas, it was born of an historical heritage that Bethlehem has and was attracted to that. Mr. Bush said he is a Revolutionary War Reenacter and represents the Pennsylvania Sixth Regiment which has appeared on behalf of the HBI, HBT, and the Sun Inn on a number of occasions and have been asked to be the Honor Guard for Martha Washington for the Strawberry Festival next month. Mr. Bush said he is the Board’s solicitor and appreciates the remarks concerning having the precedent on which we could hang our hat to be able to overcome the LCB regulation. Mr. Bush assured that he and Mr. Schantz have assiduously gone through each and every regulation and every roadblock that has been placed before them by the LCB, and this was the only viable option that appeared to be within their means to afford. Mr. Bush said that if this is being thought of as a capitalistic venture, he thinks that is misguided. He said he thinks this should be looked at as a very, very unique opportunity. He said John Adams was not the only one who stayed at the Sun Inn. He said the Crown Inn was mentioned and we don’t have the Crown Inn anymore. He said that virtually every Founding Father of this country stayed at the Sun Inn and are on the ledger book. Mr. Bush said in their lobby are copies of each of their signatures, including George Washington, Lafayette, Martha Washington, etc. He said this is no bar scene that is trying to be taken away from the other restaurants in town. This is a unique opportunity to foster a historic downtown that will draw people here and will have a spillover effect to each and every other business in town, and that is the spirit which Neville Gardner endorsed and why other restaurateurs in the area endorse it. Mr. Bush said he felt it was really a wrong direction to be coming down on the side of a purely economic capitalistic view of this. He said you wouldn’t apply that standard to one of the other historical organizations in town and he said they are, in this particular instance, under this unique set of circumstances that they are uniquely focused to be able to bring to this downtown the opportunity to mix historical heritage, interpretation, school programs, and all kinds of programming of a historical nature. He said one tool they are seeking is to be able to have it as a working restaurant. They’ve tried in the past to make it a working restaurant without a liquor license and that has not worked, and he said he doesn’t anticipate that working in the future. Mr. Bush said they are asking for an opportunity here, for something special, not just for the Sun Inn, but for Bethlehem. He said they are asking Council to recognize the historic character of the Sun Inn, to foster a historic downtown, and asking for the opportunity to share with the people of Bethlehem and the people who come here on tour buses and from other locations who want to shop in this downtown, that we can share with them historical cuisine, and share with them the Founding Fathers and Mothers of this country who stayed at the Sun Inn. Mr. Bush said he encourages Council to do this. He said they would give the grand tour to hear who stayed there, what their thoughts were, why they cared about it, why they kept coming back to the Sun Inn as opposed to going other places. He said Bethlehem, during the American Revolution, was the hospital, the medical center for the United States Continental Revolutionary Army. He said we have the historical banner here in Bethlehem recognizing Kasmir Pulaski and the Moravian women who sewed his banner that he rode into battle with at the Siege of Savannah in which he lost his left leg on behalf of this country. He was one of many ethnic groups that came to the defense of this country. He said they are not asking for anything more than that, they are asking for Council’s special consideration, not an economic advantage, to recognize the historical character and foster it. Mr. Bush added that some years ago Mr. Mowrer was very sympathetic to the Sun Inn and its purpose and said they are asking for Council to give them another look, to consider the historical nature in addition to the other considerations and not let this resource go by the wayside. He said do not turn it into a sterile environment in which it won’t be alive and in which it won’t be a draw to the downtown, and to make it something special. Mr. Bush said the liquor license is the first step and the Sun Inn can afford this one, he does not think they can afford $150,000 at this juncture. He said they have a vibrant new Board and are trying to go in a different direction and hopes that Council will support them.

The first Public Hearing was adjourned at 9:05 P.M.

Economic Development Liquor License – Starter’s Riverport

President Schweder called the second Public Hearing to order.

Attorney Frances X. O’Brien, representing Starter’s Riverport, stated their presentation would address the economic impact they would have. Attorney O’Brien said he could clarify the Liquor Code questions that came up previously. He said there are three sets of factors the Board can consider in turning down any liquor license transferred to a new location. He said they consider what is considered the 200 foot rule, the other liquor licenses within 200 feet of the premises proposed to be licensed, the 300 foot rule is restrictive institutions, church, school, hospital, daycare, public library, etc., within 300 feet, and the 500 foot rule is the general public health, safety and welfare of residents within 500 feet. He said those are factors the Board can consider, they are not mandatory, but basis for rejection.

Attorney O’Brien said he would like to point out the legal issue before Council. The question before Council is whether or not this liquor license application once made would promote economic development at the location it is intended to be moved into. He said it is the Liquor Control Board’s determination whether a reasonable effort has been made to get a license on the open market. He said that is something they will have to present a case to the Liquor Board on once the application is made, but the Liquor Board requires any such applicant to get their ticket punched by the local authorities to have their input on whether or not economic purposes would be furthered by approving this application. Attorney O’Brien stated that if and when Council were to approve this, and what he is asking Council to do is to certify this as an economic development engine, they would then be allowed to make the regular Liquor Control Board application. He said they cannot do anything until Council gives them the go ahead. Once the Liquor Control Board process is started, then they will have to go to another hearing at which time they will have to prove they have made reasonable efforts, and that would be the time at which anyone who wants to protest the issuance of this license would be given the opportunity to go in and testify before the LCB hearing examiner. Attorney O’Brien said Council has a narrow question to answer, and Council is obviously in a better position to answer that than the LCB sitting in Harrisburg.

David J. Rank, resident of Northampton, Pennsylvania, stated that he grew up in the Lehigh Valley and started his first business, a computer company, in Bethlehem in 1979. He said he took that company public in the early 1990’s, sold it in the mid-1990’s, and decided to move back to the Lehigh Valley. He said his family all worked in either a cement mill or at Bethlehem Steel. Mr. Rank said he saw the Beth Works project going on and chose to try to give back to the community. He said when he heard about the Riverport project, and before that the train station that was done, he said he was approached to look at opening a restaurant there. Five years ago he said he opened up Starter’s Pub in Saucon Valley. He said the restaurant business is more difficult and a lot different than the computer business, but chose to run it as he runs his computer business. Mr. Rank said he has been very successful at Starter’s, they are a family restaurant, sport’s grill, and have 72% of sales in food, 28% is liquor and he said they are a profitable company. Mr. Rank said they looked at the Riverport project two years ago and looked it as an opportunity to help revitalize the South Side of Bethlehem in that steel project.

Attorney O’Brien asked Mr. Rank what he intended to do at the project site. Mr. Rank displayed an exhibit showing Riverport, which he said is the building on the right when you cross the Fahy Bridge with the rear of the building facing the river. Mr. Rank described, when crossing the bridge, how to get to the entrance which is in the middle of the building when you come in. He said there are 172 condominiums and two courtyards inside. Some of the condominiums face the outside windows and there are condominiums in a hallway going down the middle which is in a u-shape. He said they are three stories high with 540,000 square feet. The square foot of the building itself is approximately 4-1/2 acres which equates to 180,000 square feet. Mr. Rank said he was asked to look at the entire left-hand side of the project, initially the intent was to put in retail space into that entire side of the project and have multiple units. He said what he decided to do is put Starter’s into the entire left side of the building. He said the footprint he is going in is 16,000 square feet on the first floor, there is a second floor, with approximately 23,000 total square feet with an outdoor patio that will be inside the courtyard. Mr. Rank said this an old Bethlehem Steel building, and said they meet the criteria of the Liquor Control Board because it sits in an Enterprise Zone. He said with regard to the licenses referred to previously that there are 10 by the Beth Works project and said he was originally under the assumption they could get one of those licenses. Mr. Rank explained that Attorney O’Brien used to be the attorney for the Liquor Control Board and helped write this law. He said the price of licenses can also be discussed and he can answer some of those questions from his perspective. Mr. Rank said he has spent a lot of money to do things that he was unaware of when he decided to go in. He said this is a historic building, so there is criteria from a building perspective that has to be met. For example, he said he could not build a wall six feet from the outside wall, he could not put a doorway in the front of this building, the entrance is actually inside the driveway, and you cannot add a door because of the historic preservation. He said there are problems that he is willing to accept because he is a business person and understands that. He said when he chose to rent this building he had to borrow money and allocate the dollars that have to go in to it. He said it is not easy to borrow money in the restaurant business. Mr. Rank explained that at the time he put together a business plan knowing that an economic development license was available. He said the license in his use of funds was allocated at $50,000 with still the intent that he could get a license. Mr. Rank said the Beth Works licenses are $2,000 but haven’t been approved yet. He said knowing that is a legal matter and will take a long time to get approved, he said he went out to look for a license. Mr. Rank said he intends to stay there and doesn’t intend to move, and hopes his license doesn’t become available for sale again. He said he wants to be there for 130 years. He commented that from a business perspective, three years ago the law changed and you could buy licenses in cities, that’s all. If you went to Northampton Borough, licenses cost $20,000 to $25,000, and if you went to the City of Bethlehem they ranged between $50,000 and $75,000. He said one person in Whitehall retired and he sold his license to Don Pablo’s for $400,000 plus. That is why the State changed the law. He said his opinion is the State controls the price of liquor, and when he buys liquor, there is no capitalism. He can only buy it at one place, yet they allow it to happen with licenses. He said you couldn’t open up a restaurant in Whitehall if you were an independent businessman, the chains have deeper pockets. He said they can do it because they have 300 to 500 restaurants. Mr. Rank said what the State had, and referred to by Mr. Schantz, was a resort license. He said you had an option to go to the Liquor Control Board and get a license, but the law had those licenses at $10,000. He said when the law was enacted, that was the price of a liquor license. He said it changed and now what they do is they sell them by county. At the time they made that change, all the licenses came in the range of $50,000 to $70,000. He said that was a great change, but he asked how you would feel if you were Don Pablo’s who just spent $475,000 for a license and tomorrow your license is worth $50,000. But, he said, that is capitalism. Mr. Rank said the Liquor Control Board can make those changes. He said he chooses not to sell his license. He said Northampton County is being developed and licenses are going up to $125,000 to $150,000, but he said he felt they had the opportunity through the Liquor Control Board to get this license as an economic development license simply because they sit in that Enterprise Zone.

Attorney O’Brien asked Mr. Rank to explain to Council what is the projected number of visitors at this restaurant each day. Mr. Rank pointed out, as indicated in the booklet he distributed, that listed in the introduction is what Starter’s is actually spending on this project and what the Riverport total project entails, which is over $30 million in the project. Starter’s is investing, exclusive of the rent they are paying, $3 million and that is in the restaurant itself. Starter’s is going to have 450 plus seats in its dining area, plus the bar area, and a 20 foot television. He said his turn count, the number of people he intends to bring to this area, is 5,350 people a week. Mr. Rank said when you look at the restaurant business there are only two things to focus on, how many people you bring into the restaurant on a daily or weekly basis, and how much money you can get them to spend when they come in. He said a fine dining restaurant might get $50 or $60 a person and can bring in less people, but a restaurant like his has to bring in a large volume of people because his average price per head is only $12. He said at his current restaurant the average per head is $13. Mr. Rank explained that here it is lower because besides the bar and dining he has a coffee shop. He said he contacted Starbucks and has the opportunity to open a coffee shop for which he is putting in Seattle’s Best Coffee and selling cappuccino. He said the coffee shop is going to be called the Cappuccino Factory.

Attorney O’Brien asked Mr. Rank how many people he anticipated employing. Mr. Rank responded that currently at Starter’s in Saucon Valley he employs 50 people throughout the year, because it is a part-time business. He said he does have quite a few full time employees, and at the end of the year he employs about 120 people. He said at the new restaurant he will have at any point in time 150 people employed, and his feeling is that there will be about 250 people throughout the year that he will employ. Attorney O’Brien asked of those 150 at any given time what would be the full-time equivalent of that. Mr. Rank replied it would be about 75 full-time people.

Attorney O’Brien, with reference to the booklet, asked Mr. Rank to explain what the buildings would look like. Mr. Rank showed a picture of the view of the center of the building of the courtyard. He explained the parking garage that sits at the back left side, is a 421 car indoor parking garage, and there are another 60 spots that are under the Fahy Bridge which would be controlled by the City of Bethlehem with the money that was given to the Riverport Project. He said they will be paying the City for their people to park there. Attorney O’Brien asked Mr. Rank to show where the entrance to the building would be. Mr. Rank showed on the plan where the entrance would be, and where Starter’s and a fitness center will be. The fitness center is 45 feet deep and the other side is 75 feet deep. Attorney O’Brien then asked where the apartments would be. Mr. Rank showed on the plan that the apartments would be in the back, also showing the courtyards. Attorney O’Brien asked how much money Starter’s will have to invest in the renovation for this project. Mr. Rank replied that Starter’s is putting in $3 million exclusive of the rent he is paying for the property. Attorney O’Brien asked what is in the building right now. Mr. Rank answered that it was the old Johnson Machine Shop, the building had to be cleaned out entirely on the inside, and was basically a shell with four brick walls, and explained that everything is built from there. He said there is no plumbing or electric, and everything is new inside the building. Attorney O’Brien asked if he knew how long the building has been empty. Mr. Rank responded he does not have the exact times, but said he was told it was used for a foundry, it did scarfing, which is taking the metal off the steel, and rail tracks came through there and took the blemishes off the steel. He said he was told after the steel was out of there it was used as a warehouse.

Attorney O’Brien stated that he thinks Council has been shown that Mr. Rank has taken an empty eyesore and is turning his portion of it into a restaurant that will draw from the morning coffee to the evening dinner with the family, many people from the neighborhood, and improve the street life and streetscape. He said he is going into an area where no one has been willing to take a chance and that is the purpose of economic development. Attorney O’Brien commented that here is an entrepreneur who is willing to take a chance, but the entrepreneur has to have the way to achieve what he needs, he has to have a liquor license. Attorney O’Brien said the way the liquor licenses have gone up over the last few years it has become unreasonable for someone in this situation going into a risky venture to pay $150,000. He said those are prices basically set in the marketplace by the large chains that go in and build new buildings out in the suburbs, large square footages, and that is not the situation on Second Street. Attorney O’Brien stated they are available for any questions and asked for Council’s approval on the request by Mr. Rank as an economic development project.

Mr. Mowrer stated that he was impressed.

The second Public Hearing was adjourned at 9:20 P.M.

4. APPROVAL OF MINUTES

The minutes of May 18, 2005 were approved.

5. COURTESY OF THE FLOOR (for public comment on ordinances and resolutions to be voted on by Council this evening)

None.

6. OLD BUSINESS

None.

7. COMMUNICATIONS

A. City Solicitor – Street Vacation – Portion of Brodhead Avenue

The Clerk read a memorandum dated May 13, 2005 from John F. Spirk, Jr., City Solicitor, to which was attached a proposed ordinance to effect the vacation of a portion of Brodhead Avenue. If there are utility service lines located in the right-of-way of Brodhead Avenue, it is the Solicitor’s Office position that, prior to final passage of the vacation ordinance, the utilities involved receive easements from Lehigh University insuring the continuance of the utilities’ rights to maintain the lines currently in place.

President Schweder stated that Bill No. 25 is listed on the Agenda this evening for First Reading.

B. City Solicitor – Street Vacation – Portion of Silk Mill Street

The Clerk read a memorandum dated May 9, 2005 from John F. Spirk, Jr., City Solicitor, to which was attached a proposed ordinance to effect the vacation of a portion of Silk Mill Street. If there are utility service lines located in the right-of-way of Silk Mill Street, it is the Solicitor’s Office position that, prior to final passage of the vacation ordinance, the utilities involved receive easement from Silk Mill Realty, L.P. ensuring the continuance of the utilities’ rights to maintain the lines currently in place. The City has received confirmation from PPL, UGI and Verizon that they have received any easements necessary for their utilities located within the area to be vacated. In addition, the Solicitor’s Office has forwarded to Silk Mill Realty, L.P. an easement agreement for any City utilities located within the area to be vacated.

President Schweder stated that Bill No. 26 is listed on the Agenda this evening for First Reading.

8 . REPORTS

A. President of Council

Executive Session

President Schweder reported that City Council met as an Executive Session this evening, Wednesday, May 18, 2005, at 6:30 PM in the Mayor’s Conference Room, to consult with the Law Bureau regarding information in connection with litigation.

B. Mayor

Mayor Callahan congratulated the Council Members who were successful in the election and said he looks forward to working with them throughout this year and hopefully the next coming four years.

C. Public Safety Committee

Mr. Leeson, Chairman of the Public Safety Committee, presented an oral report of the Committee’s meeting held this evening, on the following subjects: Lease Agreement – Police Substation – 1337 East Fifth Street; and Amending Police Civil Service Rules – Physical Fitness Requirements.

Mr. Leeson stated that Resolution 11 B concerning Amending Police Civil Service Rules – Physical Fitness Requirements will not be voted on this evening and will be tabled for a future meeting because the Police Department and Law Bureau have some more work to do on that item.

9. ORDINANCES FOR FINAL PASSAGE

A. Bill No. 21 – 2005 – Amending General Fund Budget – Purchase of Vehicles and Injury Prevention Program

The Clerk read Bill No. 21 – 2005, Amending General Fund Budget – Purchase of Vehicles and Injury Prevention Program, on Final Reading.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. Bill No. 21 – 2005, hereafter to be known as Ordinance 4322, was declared adopted.

B. Bill No. 22 – 2005 – Amending Non-Utility Capital Budget – PPL Grant – LED Traffic Lights

The Clerk read Bill No. 22 – 2055, Amending Non-Utility Capital Budget – PPL Grant – LED Traffic Lights, on Final Reading.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. Bill No. 22 – 2005, hereafter to be known as Ordinance 4323, was declared adopted.

C. Bill No. 23 – 2005 – Amending Liquid Fuels Fund Budget – 2005 Allocation

The Clerk read Bill No. 23 – 2005, Amending Liquid Fuels Fund Budget – 2005 Allocation, on Final Reading.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. Bill No. 23 – 2005, hereafter to be known as Ordinance 4324, was declared adopted.

D. Bill No. 24 – 2005 – Amending Community Development Budget – CDBG and HOME
Programs

The Clerk read Bill No. 24 – 2005, Amending Community Development Budget – CDBG and HOME Programs, on Final Reading.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. Bill No. 24 – 2005, hereafter to be known as Ordinance 4325, was declared adopted.

10. NEW ORDINANCES

A. Bill No. 25 – 2005 - Street Vacation – Portion of Brodhead Avenue

The Clerk read Bill No. 25 – 2005, Street Vacation – Portion of Brodhead Avenue, sponsored by Mr. Mowrer and Mr. Arcelay, and titled:

AN ORDINANCE AUTHORIZING THE VACATION,
DISCONTINUANCE AND STRIKING FROM THE
CITY'S GENERAL PLAN OF STREETS OF A
PORTION OF BRODHEAD AVENUE IN THE
SECOND (2ND) WARD OF THE CITY OF BETHLEHEM,
COUNTY OF NORTHAMPTON, PENNSYLVANIA.

Mr. Leeson asked if the reason Lehigh University wants this is because of the new parking garage they are building, and if that is the only reason.

Gary Falasca, Director of Facilities at Lehigh University, responded that is the driving reason. Mr. Leeson asked how many cars the new parking garage will accommodate. Mr. Falasca answered 317. Mr. Leeson asked if that was for staff and Lehigh employees. Mr. Falasca said yes and for visitors. Mr. Leeson asked if it was for any of the Lehigh students who live in that area. Mr. Falasca, said it is not, that is not planned right now. Mr. Leeson questioned what the need is to vacate this portion of Brodhead Avenue. Mr. Falasca replied that they are actually extending Brodhead Avenue beyond where it currently ends to connect with Eighth Street and University Drive so that they will have a complete operating ring road around the core of the University’s main campus. He said in conjunction with this project they are also eliminating vehicular traffic on the road that goes from Packer Avenue between Packer Church and Packer Lab. Mr. Falasca said they are in the process of eliminating vehicular traffic on the core of the main campus to create a pedestrian campus and the extension of Brodhead to Eighth and University Drive then creates that ring road for using vehicular movement around the perimeter. Mr. Leeson asked why it needs to be vacated and why it is necessary to the plan. Mr. Falasca said it is in part necessary because the way the garage is sited, there is an exterior screen wall that would intrude into the setback of the original road right-of-way, so this accommodates that. Mr. Leeson asked if it is into the road right-of-way, and that it is not into the road itself. Mr. Falsca answered yes that is correct. Mr. Leeson said that he still did not understand the necessity for this action. Mr. Falasca said because they own the land on both sides that are connected to a network of University-owned roadways, it made it more viable for Lehigh to be able to control what goes on there, exclusive of restricting anybody from driving on it as well as the need for the screen wall intruding into the setback. Mr. Leeson stated that it is his understanding if it is approved that Lehigh University agrees in perpetuity that the portion of the street vacated will remain open to public vehicular traffic without any limitation or restriction. Mr. Falasca said that is correct and it is similar to what was done on Taylor Street, Eighth Street and University Drive. Mr. Leeson asked if the Administration supports it. The Administration responded yes.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. Bill No. 25 – 2005 was declared passed on First Reading.

B. Bill No. 26 – 2005 – Street Vacation – Portion of Silk Mill Street

The Clerk read Bill No. 26 – 2005, Street Vacation – Portion of Silk Mill Street, sponsored by Mr. Mowrer and Mr. Arcelay, and titled:

AN ORDINANCE AUTHORIZING THE VACATION,
DISCONTINUANCE AND STRIKING FROM THE
CITY'S GENERAL PLAN OF STREETS OF A PORTION
OF SILK MILL STREET IN THE EIGHTH (8TH) WARD
OF THE CITY OF BETHLEHEM, COUNTY OF
NORTHAMPTON, PENNSYLVANIA.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. Bill No. 26 – 2005 was declared passed on First Reading.

11. RESOLUTIONS

A. Authorizing Execution of Lease Agreement – Police Substation – 1337 East Fifth Street

Mr. Donchez and Mr. Arcelay sponsored Resolution 14,607 that authorized the execution of a Lease Agreement between Community Action Committee of the Lehigh Valley, Inc. and the City for use by the City of a 225 square foot commercial office unit on the first floor of 1337 East Fifth Street for a police substation for the duration of three (3) years, according to the terms and conditions of the Agreement.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. The Resolution passed.

B. Amending Police Civil Service Rules – Physical Fitness Requirements

Mr. Leeson made a motion to Table Resolution 11 B for the reasons mentioned earlier in the report of the Public Safety Committee Meeting of May 18, 2005. Mr. Donchez seconded the motion. Voting AYE on the motion: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Mr. Mowrer, and Mr. Schweder, 6. The motion passed.

12. NEW BUSINESS

Congratulations to Election Winners

Mr. Arcelay extended his best wishes and congratulations to the re-elected Mayor and Members of Council that ran again. He said thank you to the challengers and to Karen Dolan. Mr. Arcelay stated that it has been a pleasure and honor to work with everyone and he wishes much success and continued commitment to the betterment of Bethlehem.

Mrs. Belinski said Council has enjoyed having Mr. Arcelay here, and until the end of the year, and it’s a pleasure having him on Council.

Street Cleaning at Lehigh University

Mrs. Belinski said she got a complaint from a South Side citizen who lives near Morton and Fillmore Streets who watched the City’s street cleaning equipment come across the bridge, go up to Lehigh University, clean all around the peripheral area of Lehigh and that was all. The resident asked why Lehigh is getting preferential treatment. Mrs. Belinski asked if there was an explanation why there is special treatment given to Lehigh University in cleaning the streets. Michael Alkhal, Director of Public Works, said he did not think there was, but he will check into it.

13. COURTESY OF THE FLOOR

Florence Avenue

Joyce Kloiber, 345 Grandview Boulevard, explained that Grandview Boulevard is about four blocks long, a dead-end street, all residential, and she lives on the corner of Grandview and Florence Avenue. She said Florence Avenue is about 500 feet and then next to that are woods. She said in about two months or so there will be 54 twin homes built there. On the other side of the woods is Juanita Street in Allentown. She said she and her neighbors are asking if it is possible, because of the construction vehicles that will be coming in there, for Florence Avenue to go through to Allentown. Tony Hanna, Director of Community and Economic Development, said they will take a look at it, discuss it with the City of Allentown, and follow up.

Rezoning Easton Avenue

Kathy Glicas, 2548 Easton Avenue, stated that she has resided in Bethlehem her whole life and on Easton Avenue for 31 years. She said when you look out her front door you see the lot where Valley Market used to be and where the Wawa building is proposed. She said she is responding to a letter that has come to the Members of Council as well as to the Planning Commission regarding 30 residents in her area who oppose the erection of the Wawa and listed all their concerns. She said she and her neighbors are very upset with the Morning Call article of May 11 where it states “planners delay vote on 24 hour Wawa” and that the very last sentence is “City Council plays no role in this decision”. Her question is if that is the case, why is a meeting being held on May 23 at Messiah Lutheran Church for the neighbors to meet with Wawa, the developer, if they have already made up their mind that Wawa is going in there, and if City Council has no role in the decision, why is all this happening, and said it seems futile.

President Schweder responded that he thinks the reason the meeting is being held is because at the Council Meeting weeks ago Council was then notified that the meeting had been set up for 3:30 in the afternoon on the given day at the site location and that the invitation list was severely restrictive. Ms. Glicas said they got a letter for the new meeting, but her concern is why is there a meeting when the Planning Commission is telling them in this article that the meeting is so that Wawa can negotiate with the neighbors. She commented that she did not see how one could negotiate with a Wawa who wants to put 12 gas pumps in with a supermarket. She said it is zoned for a supermarket, but when you put 12 gas pumps in there, it now becomes a gas station. She asked how can the neighbors go and negotiate with Wawa when Wawa is certainly not going to agree to not put the gas pumps in there.

President Schweder said that Council would like to have the meeting go forward because he said he thinks there should be a public airing of the concerns that the people in the neighborhood have. He said he did express at the meeting before that he has concerns about how this all came about when this was not proposed. President Schweder said he did not think a response has come from the attorney for the Commission with respect to whether the hours of operation were spelled out as part of the approval at that point. President Schweder said with respect to that, he thinks Council is very responsive to what people in this community are saying and there may be many innovative ways that Council may become involved in this should there not be an acceptable resolution to this. Ms. Glicas asked if they then should not give up hope. President Schweder said, regrettably, he is out of town that evening and cannot be there, but said he would hope that they have as many people as possible there and that there be a full airing of the concerns. Ms. Glicas said their concern was that the newspaper said they already had a bill of sale, and they already have their mailbox address, so she feel there is no hope. She said the Planning Commission has said they are tabling their decision but everything you read is that decision has been made. Ms. Glicas said they are now saying that City Council plays no role in their decision. Ms. Glicas said if the decision is already made and they are just tolerating them and having the meeting because it was requested, and if it is going to go through anyway, she said maybe honesty is the best policy. She said maybe they should just be told by everybody that if they cannot live in the neighborhood with a Wawa, they should just put their houses up for sale. She said she does not want to move, and if she is told to keep up the fight, they will. President Schweder said he would encourage her to do that.

Mr. Leeson said he wanted to ask the Administration about a report he received from someone who asked for anonymity but is a reliable source. He said there may be nothing to this but that it is serious enough to inquire about. The report he got, he said, was that when Wawa appeared before the Zoning Hearing Board and requested some type of approvals, and also appeared before the Planning Commission and at one or both of those hearings supposedly one or both of the Boards voted to grant whatever the relief was that was requested by Wawa subject, however, to hours of restriction on the operation of Wawa, and somehow or another that did not make it into the paperwork of the Planning Commission or the Zoning Hearing Board. Mr. Leeson again said there may be nothing to this, but he said it did come from a very reliable source. He asked that it be looked into to see if there is anything to it and report back.

Mrs. Belinski, directing her remarks to Mrs. Glicas, stated that she found out in the past that large numbers of people do make an impression. Mrs. Belinski said she would make every effort to get people there. She said she has already spent a whole week on the phone, afternoons and evenings to get people to meetings, before she was even on Council. She said presenting good arguments, having the facts, and a large group of people, will get attention.

Economic Development Liquor Licenses for Sun Inn and Starter’s Riverport

Stephen Antalics, 737 Ridge Street, said his comments are an epilog to prior comments regarding the liquor license. He said having heard comments on both the Sun Inn and the Starter’s Riverport, he said he thinks it is astounding, and that if this was a high school or college course, you couldn’t have a better example of two extremes addressing the same issue. He said Starter’s Riverport addresses what Mr. Schweder was concerned about, economic advantage, and the Sun Inn Preservation is about preserving historical precedent. He said both are arguing for the same thing but for contrasting reasons. Mr. Antalics said the Sun Inn is asking for restoration to original use, Starter’s Riverport is asking for relief, although an existing viable economic development in another site. He said what needs to be looked at is the age of the oldest business doing business in Bethlehem with a liquor license and when was that liquor license issued. He said Starter’s Riverport requires Council’s professional deliberation as to whether they should be granted that relief, but in the Sun Inn situation there is no deliberation. He said he thinks Council has a responsibility to preserve history and grant it categorically.
Congratulations and Support

Diane Herstich, 861 Media Street, said she would like to offer her support to everyone who won the election, Mayor Callahan and Members of Council, and said she has always been a loyal Democrat and even though she lost, she said her support goes beyond the Democrat ticket.

Dean Bruch, 625 Hawthorne Road, said he would quote an old cliché by saying to the Mayor, “four more years”. He said congratulations to everyone and thanked Mr. Arcelay saying he was sorry he did not make it but told him he did a marvelous job in the time he was on Council.

Sun Inn

Mr. Bruch, commenting on the Sun Inn’s request, said he thought it was very interesting what was being requested and respects what they want to do to make their endeavor flourish.

Eighth Avenue

Mr. Bruch then asked what was happening with a Lowe’s proposed on Eighth Avenue and if anything can be expected in the near future. Mayor Callahan replied that he thought some development can be expected there in the next month or two.

Mr. Bruch commented on the Wawa on Eighth Avenue and said he thought gas stations should not be in residential communities. He thought it was okay for a convenience store but not for gas stations.

Various Matters

Mr. Bruch said he enjoys listening at Council meetings and being a referee. He said he listens and tries to understand the judgment of the other person and put it in perspective.

Mr. Bruch said he can’t understand to having the Sun Inn do what they want to do and then have somebody wanting to pull slots on the other side of town.

Mr. Bruch said looking at Washington and Harrisburg, we need to address their problems and said they have a lot of them.

Mr. Bruch commented on the good job Steve Samuelson is doing and said he is still waiting for someone to make a recommendation to give an acknowledgement to Steve Samuelson.

Economic Development Liquor License for Starter’s Pub

Mr. Frances O’Brien asked when Council will be voting on the Starter’s Pub proposal. President Schweder replied that it will be scheduled for the June 7 City Council Meeting and anyone can comment on either of the liquor license requests at the first Courtesy of the Floor at that meeting.

Economic Development Liquor License for Sun Inn

Mr. Schantz asked what Council would like to see from the Sun Inn with regard to further information. President Schweder said that it would be helpful to him if he could see a listing of the steps that were taken to try to get the license and that is the case that needs to be made. President Schweder, commenting on the historical context of the discussions and what went on 25 years ago, said he thinks the argument comes down to the economics of it and thinks if the good faith effort has been made, a listing of the steps that were taken since the last round where that was done would be very helpful.

Mr. Leeson, commenting on the Courtyard, said he would like to see a signed agreement and all the issues resolved to the satisfaction of the City. Mayor Callahan commented that he has an idea of what he would like to see there, but asked Mr. Leeson what he would like to see. Mr. Leeson said he would borrow from former Mayor Cunningham who said the City would like to have the authority to schedule events and festivals throughout the downtown, including the Sun Inn Courtyard and the historic Bethlehem area. He said if a festival was requested for downtown, the City would have the authority to schedule and sublease the Sun Inn Courtyard. He said the Sun Inn has made previously some requests on its own along those lines, and that he said he would leave that to the Administration to negotiate the details. Mr. Schantz asked if Mr. Leeson would be willing to sit in on that meeting. Mr. Leeson responded he would defer to the Administration and trust them on that, but if they have any questions for him, they can be relayed. Mr. Schantz then asked if an agreement between the Sun Inn and the Administration would be satisfactory. Mr. Leeson said to address all outstanding issues. Mr. Schantz then asked if the matter would be tabled until that time. Mr. Leeson responded he did not say that, but it would be important to him.

14. ADJOURNMENT
The meeting was adjourned at 10:05 p.m.