Hampered by a stagnant economy, the Lehigh Valley generated action in 2011

Merger and expansion shaped the health care industry, while several regional projects advanced.

Growth by leaps and bounds it wasn’t.

The region, like much of the country, muddled through a shaky economic recovery in the past 12 months that produced only mild progress in the job and housing markets. But traces of momentum could be found.

Stagnant economy notwithstanding, several key projects shaping the Lehigh Valley landscape advanced in 2011.

The health care industry, among the few sectors that weathered the recession in relatively strong shape, continued to evolve and expand.

St. Luke’s acquires, grows

St. Luke’s Hospital & Health Network agreed in April to acquire Warren Hospital for $25 million, promising to boost the financial health of the debt-laden Phillipsburg hospital and also pay for upgrades.

Though the acquisition was received warmly, it did not proceed without controversy.

Easton Hospital parent Community Health Systems Inc. sought to raise stakes in August, offering $40 million to purchase Warren Hospital and turn the Phillipsburg facility into a for-profit organization.

Warren Hospital trustees swiftly rejected the offer, sparking dissent from critics who said Community Health’s offer deserved a closer look. Warren Hospital officials later said that despite the additional money, it preferred St. Luke’s for its local ties and reputation for reviving struggling hospitals.

The New Jersey Attorney General’s office in December approved the merger, now one step from consummation. It still needs approval from New Jersey Superior Court.

The Roseberry Street facility would mark St. Luke’s fourth hospital in the Lehigh Valley area and sixth overall.

St. Luke’s grew organically as well with the addition of its Anderson campus in Bethlehem Township, Pa.

The $200 million complex overlooking Route 33 opened this fall, first with medical offices and a cancer treatment center in September followed by the 108-bed community hospital in November.

The new hospital marked only the fifth, new full-service acute care hospital built in Pennsylvania in the last five years. It is estimated to employ 400 staffers, plus about 100 physicians.

Urban projects advance

The region’s urban areas saw varying progress on core projects.

Allentown unveiled plans for a $100 million hockey arena at Seventh and Hamilton streets. The nearly 10,000-seat arena would be home to the Philadelphia Phantoms, the minor league affiliate of the Philadelphia Flyers.

Projected to open in 2013, the venue would host concerts and other entertainment year round.

Sands Casino Resort Bethlehem expanded attractions around its gambling centerpiece on the city’s South Side.

The company opened a 10-story, 302-room hotel in May, followed in November by a soft opening of the Shoppes at Sands, a 200,000-square-foot retail center. Formal opening for the mall is set for February.

Nearby at former Bethlehem Steel land, ArtsQuest Center at SteelStacks opened a four-story venue dedicated to arts and music along with three outdoor plazas. Easton saw incremental advances on ongoing projects.

Workers demolished the former Marquis Theater, paving the way for a South Third Street parking deck and bus terminal. LANTA will operate the estimated $14 million facility.

Restoration continued at the Pomeroy's building on Northampton Street, a former department store vacant for 30 years, now planned for a mix of apartments and commercial use.

Across the Delaware River, Phillipsburg moved to take possession of the Ingersoll-Rand property off Route 22 in attempt to spark development on the vast but largely unfilled tract.

Town council in December introduced plans to buy the roughly 200-acre parcel, once the home of industrial giant Ingersoll-Rand, for $1 in exchange for tax forgiveness from owner Preferred Real Estate, which had struggled to find tenants to develop the land. The town hopes to fare better.

Comings and goings

Several leadership changes altered the makeup of key Lehigh Valley institutions.

The authority that manages Lehigh Valley International Airport in August hired AFCO AvPORTS Management LLC to jumpstart operations.

The Dulles, Va.-based firm filled a void at executive director that began with the departure of George Doughty in 2010. Doughty’s deputy, Larry Krauter, filled in on an interim basis until leaving in February to run Spokane International Airport in Washington state.

Lehigh-Northampton Airport Authority inked AvPORTS to a two-year deal starting at $325,000 annually. Its job is to spark travel at a regional airport where passenger volume lags compared with Philadelphia and Newark, despite nearby convenience.

The region’s largest utility, Allentown-based PPL Corp., also named a new boss. PPL hired CEO William Spence to replace the retiring James Miller. Spence was chief operating office since joining the company in 2006.

In the meantime, the Lehigh Valley Economic Development Corp. is laying the groundwork to replace CEO Phil Mitman. The board of directors said it will begin succession planning for its next chief executive in 2012.

LVEDC also weathered controversy in June when Mitman fired social media specialist Vanessa Williams, who said via the group's Twitter account that staffers often leave work early as part of a flexible summer-hours policy.

The organization issued several clarifying statements afterward that no staffers leave early for the week unless they have already logged 40 hours. Williams has since hired an attorney in attempt to have her name cleared of wrongdoing.

The Warren County Regional Chamber of Commerce will search for new leadership as well. Robert Goltz, CEO for the past eight years, stepped down at year’s end to pursue other opportunities.

Further ahead, Jeff Parks, founder and president of ArtsQuest, said he will retire in 2015. The Bethlehem-based nonprofit organization runs Musikfest and other arts-oriented attractions.

Bottom line: slow growth

Amid these developments, economic fundamentals changed little.

Now two and a half years since economists formally declared the recession over, job growth was slow. The region’s unemployment fell to 8.6 percent in November — the most recent month available — almost a percentage point less than one year ago.

The drop coincides with a similar decline in the national rate. Joblessness is still well above the 5 percent unemployment rate that was typical before the recession.

Regardless, layoffs appear to have abated. There were no announcements of massive reductions, while some companies even added jobs.

Buoyed by increased demand, Mack Trucks in May called for 300 additions to its Lower Macungie Township plant.

Meanwhile the housing market, whose decline precipitated the recession, showed scant progress.

Sales were light most of 2011, perhaps a hangover after the expiration of the previous year’s temporary tax credit, though activity picked up late in the year.

Homes that are selling are competing with foreclosures and short sales, keeping prices down. The average price for a home in November was $182,000, down 9 percent from $200,000 at the same time in 2010.

Many economists say a genuine recovery can’t take off without a housing rebound, which in turn would spark the finance and construction industries.

For buyers, interest rates remain at historic lows. But that incentive is somewhat offset by tighter lending standards.

Ultimately, a revival in consumer confidence is linked to the health of the job market. Most economists project slow to moderate growth in 2012. Stay tuned.