A review of Pat Browne's role in Allentown State Hospital sale
The anticipated sale of the Allentown State Hospital property to City Center Investment Corp. for $5.5 million caps an arduous process that began in 2013.
The key player, on the legislative side, was Pat Browne, the now-former 16th District state senator from Allentown.
It was Browne who in 2017 introduced the first bill, which authorized the state Department of General Services to negotiate a sale directly with TCA Properties, a Doylestown company.
After the state never completed the sale to TCA, it was Browne who in 2019 wrote a second bill to solicit competitive bids. It required demolition of the 44 buildings on the 195 acres of land before advertising for bids.
With the state rejecting the two bids last year, it was Browne who in September 2022 once again drafted legislation – this time to sell the property directly for $5.5 million to City Center, one of two companies whose bids earlier were rejected by the state. The company’s president and co-founder J.B. Reilly is a childhood friend of Browne.
City Center also has been the major player in downtown Allentown’s Neighborhood Improvement Zone, created by a 2011 law written by Browne that allows developers to tap most taxes generated in the designated area to help pay construction loans on office, apartment and other structures they build.
After Browne introduced the bill to designate City Center as the buyer, he and state Rep. Michael Schlossberg, D-132, who also worked to find a developer for the site, released a statement to the media: “After an open bidding process and considerable review of available options, the Department of General Services and the Allentown State Hospital Committee made the decision to convey the state hospital site to the most successful developer in Allentown’s modern history, City Center Allentown.
“Their knowledge and outstanding success in redeveloping challenged sites within the city make them the most qualified entity to undertake this promising task. We are confident that their development of the state hospital site will lead to positive results for our residents, our community and the City of Allentown.”
The state hospital legislation was the last major bill written by Browne, as he was a lame-duck senator after losing the Republican primary last May in a huge political upset by 24 votes to newcomer Jarrett Coleman, then a Parkland School Board member.
Bidding process review
Much of the 2022 bidding process was shrouded in secrecy, as General Services declined to make public relevant documents requested by The Morning Call. After the newspaper appealed the decision, the Office of Open Records last week ordered the release of the documents within 30 days. The state can appeal the decision in court.
Coleman, who was elected to the Senate in November and sworn in Tuesday, plans to review the bidding process.
“It’s all a matter of transparency,” he said in an interview last week. “We want to be able to understand what happened. We are fully exploring all of our options, and those options include repealing the portion of the law that allowed for the sale without the competitive bid.” He wants “to ensure that the public gets answers.”
Coleman acknowledges it may be too late to stop the sale, the finalization of which has yet to be announced. Once the sale goes through, the law authorizing the sale could not be repealed.
Allentown State Hospital history
The 195-acre Allentown State Hospital property is the largest piece of undeveloped land in Allentown. Located at 1600 Hanover Ave., it’s a bucolic site that sits on a hill overlooking the north bank of the Lehigh River.
The hospital opened Oct. 3, 1912, as the Pennsylvania State Homeopathic Asylum for the Insane at a cost of about $1.9 million. As the state’s first homeopathic hospital, its 1,000 beds quickly filled up, leading to expansions.
It added a Mental Health Institute for Children in the 1930s and reached its peak of just over 2,000 patients in the 1950s.
The grounds once featured a majestic block-style hospital with several buildings connected by corridors. Among its 44 buildings and structures were two for patients with tuberculosis.
Self-sustaining, the hospital had its own electric power plant, ice plant and dairy farm, according to historical accounts written by The Morning Call, the blog Lehigh Valley History and others.
But by the 1970s, changing attitudes and law led to a move to community-based care for persons with mental health diagnoses.
By 2009, the number of patients in the Allentown hospital had fallen to 170, according to The Morning Call. The facility closed on Dec. 10, 2010, with patients being transferred to other facilities. It was the state’s eighth psychiatric hospital to close.
How the sale happened
According to various media reports, the property cost the state about $2 million a year in upkeep.
Lehigh County records show it is assessed at $5,656,000 based on the year of 2013. The state, which had the site appraised in 2022, said the land was worth $5.5 million.
On Dec. 22, 2017, Gov. Tom Wolf signed into law Browne’s Senate Bill 921, which authorized General Services to negotiate the sale of the land to TCA Properties. At the time, Browne said a direct sale would allow the state to have more control over development, The Morning Call reported.
The state never reached an agreement with TCA, and in October 2018 General Services sought bids to demolish the buildings on the site, estimating the cost to be $15 million.
On July 2, 2019, Gov. Tom Wolf signed Browne’s Senate Bill 701 into law, establishing a competitive bid process, prohibiting a casino on the land and creating a committee to oversee the sale. Committee members included Browne, Schlossberg, an Allentown City representative and the secretary of General Services.
The next month, General Services again sought bids to demolish the buildings, this time estimating the cost at more than $10 million. Demolition began in late 2020 and was completed early in 2021 under a $12.7 million contract, Lehigh Valley Press reported.
Also in 2020, at the request of the City of Allentown, a feasibility study on the reuse of the property was conducted by Michael Baker International, which outlined three proposals for mixed-use development and recommended inclusion of senior housing.
On Jan. 19, 2022, General Services announced it would accept proposals for the purchase of the hospital property by May 18. City Center was one of two bids, both of which were rejected.
In a statement recently to the Pennsylvania Capital-Star, Reilly said City Center proposed a mixed-use development and offered the $5.5 million minimum bid on the condition that it be given time to do additional due diligence on the property.
In September 2022, Browne introduced the final legislation regarding the hospital property. Senate Bill 1328 authorized General Services to sell the property directly to City Center for $5.5 million. The bill was rolled into House Bill 121, existing legislation that included the sale of four other state properties.
In October, it passed the Senate, 46-3, and House, 156-44, with all Lehigh Valley legislators but Rep. Gay Day, R-187, who lost in the May primary, voting yes. Gov. Wolf signed the bill into law on Nov. 3.
The 16th District Senate primary
Browne served as state representative from the 131st District when he won a special election in 2005 to represent the 16th Senate District. He completed the nearly two years left on the term of Charlie Dent, who was elected in 2004 to the Lehigh Valley’s congressional seat.
Last year, Browne sought a fifth four-year term as senator. But the district, under the once-a-decade redistricting, changed markedly for the 2022 election. A large chunk of Allentown was lost, with only a small section of the city left in the district; western and southern Lehigh County remained and northern Bucks County was included to complete the district.
It was the first time he faced a primary challenger - Coleman, a relative political newcomer, having been elected to his first public office, on the Parkland School Board, seven months earlier.
Coleman’s primary campaign was funded largely by $376,885 in donations and in-kind contributions from Citizens Alliance for Pennsylvania, a political action committee that, according to its Facebook page, works “to restore the Constitutional principles of limited government, economic freedom, and personal responsibility.” The PAC is linked to Jeffrey Yass, co-founder of the Susquehanna International Group and, with an estimated value of $12 billion, making him Pennsylvania’s wealthiest resident.
Browne, as a longtime incumbent, also had a well-financed campaign. The largest donor to the the Citizens for Patrick Browne committee before the May 17 primary included three contributions totaling $102,500 from the Pugliese PAC, run by Rocco Pugliese, the head of the Harrisburg lobbying firm Pugliese Associates.
On June 15, about four weeks after the primary, the Pugliese PAC sent another $150,000 to Browne’s campaign. In total, the campaign received $252,500 from the PAC.
The only contributors to the PAC before the primary were Pugliese, Reilly and his wife ($100,000 on April 26, 2022); Joseph V. Topper Jr., CEO of Dunne Manning of Allentown and a co-founder of City Center, and his wife ($100,000 on April 26); and Michael Perrucci, partner in Florio Perrucci Steinhardt Cappelli Tipton & Taylor, a law firm with an office in Bethlehem ($50,000 on April 28). City Center and Dunne Manning are listed as Pugliese Associates clients on its website.
The year 2022 was by far the PAC’s most active, raising the most money raised and distributing the largest total to candidates in a single year dating back to 2000, the first year the PAC’s online records are available on the Department of State website.
The PAC contributed to a handful of candidates in 2022, mostly deceiving $500. The only candidate other than Browne to receive more than that was state Rep. Seth Grove, a Republican whose campaign took in $5,000 from the PAC on Oct. 17. Grove in November was elected to his eighth term representing the 196th District which comprises part of York County.
Pugliese, who started the Harrisburg lobbying firm in 1980, has known Browne for many years, which he referenced in his podcast with the senator in 2017.
On the firm’s website, he also relates how his firm worked closely with Browne to create Allentown’s Neighborhood Improvement Zone, which led to a billion dollars of investment in the downtown area.
After losing the primary, Browne’s campaign had about $500,000 left. What did he do with the money since he no longer had a November election campaign to run?
After paying $67,301 for expenses related to his campaign, according to campaign finance reports, Browne contributed to the election campaigns of Dean Browning ($5,000), who was unsuccessful in his quest to fill the new 14th District Senate seat; Joe Emrick ($1,000), who won a seventh term representing the 137th House District; and Antonio Pineda of Whitehall ($1,000), who was elected Lehigh County commissioner from District 1 in 2021). He also sent $20,000 to the Bucks County Republican Committee. Another $170,000 went to Republican candidates elsewhere in the state.
No money went to Coleman, who easily defeated Lehigh County Controller Mark Pinsley in the election.