March 13–Three months after Hotel Bethlehem's expansion plans soured at a public meeting, the hotel owners and a city agency could reconcile their differences this week and revive the $37 million project.

The Bethlehem Revitalization and Improvement Authority, which oversees a tax incentive critical to the project, is scheduled Thursday to reconsider the expansion, which would double the size of the 1920s-era hotel on historic Main Street.

The resolution reflects conditions attorneys for the authority and the hotel reached behind the scenes since the Dec. 5 meeting, according to Alicia Miller Karner, executive director of the authority.

Under the resolution, the hotel project would be included in the City Revitalization and Improvement Zone if the developers adhere to conditions aimed at ensuring the expansion is done as pitched and provides more public parking.

Bruce Haines, managing owner of the Hotel Bethlehem, said the conditions look like something he could support if it ends up like the resolution that was being tweaked Monday afternoon.

But even if the authority approves it, Haines said there were many other obstacles that would have to be cleared to make the project a reality.

"If the city supports this, I will do what I can to make this happen," Haines said.

Mayor Robert Donchez, who supports the project, declined comment on the specific conditions but highlighted the importance of the hotel expansion to Bethlehem: drawing an estimated 70,000 additional visitors each year in the historic downtown.

"I think the expansion of the hotel is important not just to Main Street and the business district but the entire city and the Lehigh Valley," Donchez said. "It's a first-class hotel bringing in a first-class [conference] center."

Under plans unveiled last fall, the 100-spot deck behind the hotel would be replaced with a 460-spot garage topped by four stories of guest rooms and meeting space. The addition would connect to and be built in the same art deco style as the original, nine-story hotel, which was built under the direction of Charles Schwab, then chairman of Bethlehem Steel.

In the resolution, the authority requires these conditions be met within two years for the project to be included in the CRIZ, which allows developers to pay off construction loans with certain state and local taxes:

* The hotel owners would have to get land development plan approval for the project as proposed last year.

* The hotel would have to agree in writing to set aside 50 parking spots for public use 300 days a year and to charge no less than the going rate at other garage parking in the city.

* The developers would have to show sufficient public and private funding was secured to complete the project.

The resolution makes no mention of the Hotel Bethlehem allowing the city parking authority to use a lot the hotel leases on Spring Street. Authority members raised that issue in December.

Haines said there are several other key approvals he needs from the city, including buying land from the Bethlehem Redevelopment Authority to build an access road to Old York Road. That, he said, would eventually require approval from City Council.

Even if all that goes smoothly, Haines said the conditions have changed a lot since he first pitched it to the mayor more than a year ago. He said his preferred investors have moved on and there could be a change in ownership with the Sands casino on the South Side. If the new owners decide to build a conference center there, he said, that could derail the Hotel Bethlehem's plans.

The meeting comes more than three months after Haines said he would shelve plans for the expansion after some sharp exchanges at a Dec. 5 meeting with James Broughal, chairman of the authority.

Broughal interrupted Haines' remarks to written concerns the authority had with the project, saying he should submit the answers in writing. He added that Haines's negotiating style is the "Haines way or the highway."

Haines later said he wasn't "feeling the love" from the authority about the project and couldn't sell it to out-of-state investors if everybody wasn't on board. He then told the authority to "take the acreage and put it somewhere else." He walked out of the meeting before the authority formally voted to table the proposal.

The authority members said they supported the project but had questions as to parking issues and the lack of land development plans — crucial should the hotel be sold before the project is completed.

Donchez said after the meeting he wanted to find common ground and get the deal done.

Haines said in December he was working on "Plan B" — boosting revenue by turning the existing hotel into a luxury boutique facility instead of a conference center. He said that idea is still attractive if the conference center doesn't materialize.

Under the conference center project proposed last year, meeting room space would go from 10 rooms, totaling 14,000 square feet, to 24 rooms, totaling 38,553 square feet. The number of guest rooms would grow from 128 to 201.

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