Allentown and Washington Borough hope to join in what's both a regional and national trend.
View full sizeApartments at the former Pomeroy's department store rented easily. Mark Mulligan’s purchase of Easton’s former Pomeroy’s department store was his big test.
The Hunterdon County-based developer was interested in the city’s real estate market but didn’t know what to expect of it when he revitalized the long-stalled Pomeroy’s redevelopment more than three years ago.
What Mulligan found surprised him: Two months after he finished 22 apartments in the Northampton Street building, all had been rented, and at costs between $950 and $1,250 a month.
The quick turnaround inspired Mulligan not only to build another 22 apartments at Pomeroy’s but to purchase the Alpha and Governor Wolf buildings and the Simon Silk Mill property for additional redevelopment projects with significant high-end apartment components.
Mulligan already has a waiting list for the next round of Pomeroy apartments — some of which will be done later this year — that’s greater than the amount of remaining rental units.
“You’re really seeing a lot of groundswell support in living Downtown,” he said. “Some people use the term that Easton feels like a little Hoboken, and I absolutely agree. It’s pretty amazing to me how it’s turned out like that.”
Bethlehem also is experiencing strong interest in high-end downtown apartments and it’s a movement developers in Allentown and Washington in Warren County also are now banking on.
Twenty-four high-end apartments that opened in Bethlehem’s former Farr’s shoe store at New and Broad streets in spring 2012 rented so quickly that the developers bought another Center City building earlier this year to create an additional 21 rental units.
ALT Realty, the listing agent for both buildings, didn’t have to do much marketing for Farr’s besides put a “for rent” sign outside the building, representative Amy Pektor said. The company already has a seven-person waiting list for the 21 apartments being built inside the Dodson Building at New and Walnut streets, where the only marketing has come from media reports, she said.
“It’s just amazing how many people have called in,” she said.
Market's growth sector
Allentown’s current Center City redevelopment is focused on a minor league hockey arena and office space, but chief developer J.B. Reilly also has proposed 168 luxury apartments as part of his Seventh and Hamilton streets complex. The city’s proposed large Waterfront complex along the Lehigh River also includes 172 high-end apartments.
In Washington, a developer is proposing plans to build 90 high-end apartments in the heart of the borough’s downtown on West Washington Avenue, Mayor Scott McDonald said. A separate developer also is working to build the second phase of apartments at the downtown Midtown at Washington complex, where a first phase opened five years ago.
“Rental housing has been the real growth sector of the housing market,” said James Hughes, dean of the Rutgers Edward J. Bloustein School of Planning and Public Policy.
Downtown rentals are especially flourishing in cities that also are home to downtown restaurants, galleries and shops, he said.
“If there are restaurants and some galleries, things of that nature,” he said. “But if you don’t have that, the housing’s not going to work downtown.”
Bethlehem has had a thriving Center City for more than a decade now, but Easton’s resurgence is more recent. Allentown is trying to build up its commercial and office base before opening the apartments — which are proposed for later phases.
Washington for the first time in several years has just about every downtown storefront — aside from those in uninhabitable buildings — filled, McDonald said, putting the borough on an upswing.
Appeal of walking
View full sizeRoss, left, and Kristen Brown, along with their dogs Kaiser, left, and Scurby, have lived for 14 months in a new high-end apartment at the former Farr's shoe store building in Bethlehem. Bethlehem resident Ross Brown said he loves the central location of his apartment in the Farr’s building. The Arkansas transplant had been directed to Lehigh Riverport — a South Side complex of condominiums and apartments — but he and his wife found they liked Farr’s better because Riverport at the time was also home to a large bar.
“It’s a little bit of a better spot,” he said of the Farr’s building. “We walk down to Main Street all the time.”
Brown, 31, and his wife, Kristen, 32, moved to Bethlehem 14 months ago when Brown started his residency at St. Luke’s University Hospital’s emergency room. They’re not sure if they’ll stay in the Lehigh Valley after Brown’s stint at St. Luke’s is done in another two years because his wife is a recent law school graduate now on the job hunt.
“We were kind of on the fence about buying because we didn’t know how long we would be living here,” Brown said.
The Browns are emblematic of downtown renters both in the Lehigh Valley and nationally. Many 20-and early 30-somethings are either in the beginning of their careers and mobile or can’t qualify for a mortgage because of hefty college loans and increased requirements, Hughes said.
“This is a generation that wants activity environments,” he said. “Compared to their baby boom parents, they have a different perspective of downtown because a lot of (cities) have stabilized and come back.”
Young adults are the majority of renters at both Farr’s and Pomeroy’s, but both buildings’ developers also have seen interest from older adults, as well.
About one-third of the Pomeroy’s residents are retirees who have sold homes on College Hill and in Easton’s suburbs both to downsize and to live in a more "walkable" neighborhood, Mulligan said. In Bethlehem, the Dodson building, which will have larger apartments than Farr’s, is especially attracting some older adults, Pektor said.
“We saw a push of young professionals but now we’re seeing other professionals who don’t want to do the whole homeowner thing,” she said.
Residential revival
Downtown residents are critically important to successful business districts, both Bethlehem and Easton officials said. While the cities’ restaurants can attract customers from surrounding neighborhoods and towns, downtown residents are more apt to dine and shop there on a regular basis, officials said.
“It’s unbelievably important,” Joe Kelly, Bethlehem’s director of community and economic development, said of having downtown residents. “The more people you can have 24 hours a day, seven days a week, the better you do.”
While the Dodson and Farr’s apartments are certainly welcome additions to Bethlehem’s Center City, the neighborhood has been home to high-end apartments and condominiums for many years, Kelly said, pointing to the many condominiums inside Walnut Street mansions and the apartments atop most Main Street storefronts.
The planned influx of high-end and even market-rate downtown apartments will be an important change for Easton, however, Mayor Sal Panto Jr. said.
“It gives us exactly what Downtown has lacked since urban renewal, which is people living Downtown,” he said. “When they rent here, they bring in earned income tax and they bring revenue downtown.”
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High-end apartments on the horizon
Allentown: The Waterfront complex along the Lehigh River is slated to include 172 high-end apartments, and another 168 luxury apartments are planned near the new minor league hockey arena at Seventh and Hamilton streets.
Bethlehem: Twenty-four high-end apartments were completed last year in the former Farr’s shoe store building at New and Broad streets and the same development team is creating 21 more high-end apartments in another building at New and Walnut streets.
Easton: Another 22 apartments are under development at the former Pomeroy’s department store on Northampton Street, where 22 high-end apartments opened last year. The Pomeroy’s developer also has purchased the Alpha and Governor Wolf buildings and the Simon Silk Mill properties to create more high-end apartments.
High-end apartments also are being built in the former Lipkin’s furniture store at Third and Ferry streets and inside 118-120 Northampton St. Also, 24 market-rate apartments are being built in the former WEST and A&D Tile buildings in the 400 block of Northampton Street.
Washington Borough: A developer is proposing plans to build 90 high-end apartments in the heart of the borough’s downtown on West Washington Avenue and another developer is working to build the second phase of apartments at the downtown Midtown at Washington complex.