Archive for category Abe Atiyeh

Why The Morning Call Delayed Atiyeh Story

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On July 31, in a story entitled “Fed Ed and Miked Fleck Funneled $1 Million to Honest Abe Atiyeh“, I broke the story that entrepreneur Abe Atiyeh, Fed Ed and Miked Fleck cooked up a scheme that would enable him to buy the billboard company he always wanted. Fed Ed simply had his bobbleheads on City Council pay Atiyeh $1.4 million for land it does not need. They ignored their own appraiser in doing so. He had warned them the land was only worth $580,000. This story was picked up by WFMZ-TV69 pretty quickly, adding a few details that I missed. But The Morning Call downplayed the Atiyeh story until August 15, even though it was brought up during a City Council. I think I know why.

Toward the end of its account, The Morning Call parenthetically notes, “(Under an agreement with Digiview this spring, The Morning Call became the exclusive sales agent for Atiyeh’s billboard network.)”

It did not want to bite the hand that feeds it.

Atiyeh is no longer discussing the matter, which seems like a smart thing for him. It is thanks to him that we know he used Miked Fleck as a consultant.

Fed Ed Paid Atiyeh $1.4 Million For Property Appraised at $580,000

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Abe Atiyeh a few years ago, in Bethlehem  zoning spat.

Around this time last year, colorful entrepreneur Abe Atiyeh purchased the assets of a company that has a billboard deal with Allentown at 13 different locations. It was a sudden turnaround. Previously, Abe had been on the warpath over this and several other matters, including the controversial Neighborhood Millionaire Improvement Zone. When news of peace broke, Mayor Edwin Pawlowski, aka Fed Ed, denied that there was any “deal that was made here, per se, and in any way, shape or form.”  But that was untrue. Atiyeh had hired Fed Ed’s political consultant Miked Fleck to be his business consultant. Very obviously, a deal was made.

On Friday, I told you that Fed Ed spent $1.4 million to buy two Atiyeh properties the City did not need. Atiyeh walked away with a $999,000 capital gain that certainly would help him make the purchase. But guess what? Fed Ed actually paid him $820,000 more than these properties were worth. The City’s own appraisal valued the two properties at just $580,000.

By paying Atiyeh nearly three times what these properties were actually worth, it appears that Fed Ed deprived Allentown citizens of their right to honest services.In some contexts, this can be viewed as a federal crime.

Raymond C Geiger, Jr., who is a well-respected certified general appraiser, was hired by Allentown and submitted a report on January 23, 2014, a few months prior to the City’s purchase. (You can read it here). He valued the Basin Street property at $360,000 and the Martin Luther King, Jr. Highway property at $220,000. The City never bothered to get a second opinion.

Julio Guridy, Cynthia Mota and Edwin Pawlowski

Basin Street property – $360,000. – Geiger makes clear that the billboard easement on this property is not part of his valuation. Atiyeh first purchased the Basin St tract  in 1996 from RJ Gorman Railroad for $200,000. Over 18 years, he was unable to develop it. He sold it to Isaam Elias in 2005 for $350,000, but Elias was unable to do anything with it, either. He conveyed it back to Atiyeh in 2012 for $350,000, the same sum Abe had been paid for the property.

Atiyeh provided a plan for a flea market at the site, but Geiger notes that “there is no evidence of demand for such use or the financial feasibility of such use. If it were a viable use, the question is why take eighteen years to develop it? No development plans have ever been approved.”

Geiger observes that the site is low-lying and “extremely flood prone.” Most of the land is “100% undevelopable.” Before doing anything on the property, it would need six feet or more of fill, compacting and a one-year settlement period.

Martin Luther King, Jr. Highway Property – $220,000. – Atiyeh purchased this old fertilizer company in 2007 for just $51,000, before the prior owner received an Act 2 release from environmental liability. That was subsequently obtained, and obviously makes the property more valuable than it was when Atiyeh bought it.

Geiger could see signage on the property soliciting “storage use.” In addition, Atiyeh provided him with plans for a three-story office building. Geiger thinks that use is unlikely. “Such use would compete directly with the rising offices in the NIZ and as such would not have a favorable cost-value relationship. I note, no development plans have ever been submitted or approved.”.

Like the Basin Street property, this one is also “extremely flood prone. Much of it is within the 100-year flood plain and 100% undevelopable. About two acres can be developed, but would require 10 feet of fill, compacting and a one-year waiting period. In Geiger’s view, development here is at a “disadvantageous cost-benefit.”

After receiving nearly three times what these properties are worth, Abe began throwing his money at anyone that Miked Fleck or Fed Ed directed him to support. He really has no choice. He has a three year contract for those billboards, and would like to see that contract renewed and perhaps expanded. So in some ways, Atiyeh is a victim here, too. If he does not pay, he does not play.

Fed Ed and Miked Fleck were the predators. The biggest victims, of course, are the people of Allentown. The Mayor and City Council both have a fiduciary duty to safeguard the public’s funds. City Council, with the exception of Jeanette Eichenwald, rubber stamped this proposal. I have no idea if they were provided with or looked at Geiger’s appraisal. In fact, Ray O’Connell actually complimented the Administration. Cynthia Mota, who may have worked for Atiyeh and testified on his behalf in a zoning dispute, voted in favor of the purchase.

The first duty of a public official should always be to the people. The Romans would say semper pro populus – always for the people. In Allentown, that has been perverted.

Others will decide whether this denial of the right to honest services is criminal.

Atiyeh Real Estate Deals Approved by Allentown City Council

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About two years ago, Allentown bought two properties it does not need from Abe Atiyeh, giving him at least a $1 million capital gain. This money certainly went a long way toward helping the colorful entrepreneur in acquiring the assets of an existing billboard company that already had 13 locations. That company, Clinton Street Media, was the beneficiary of a new zoning ordinance that enabled Mayor Edwin Pawlowski, aka Fed Ed, to change the uses of city-owned property at his own whim. And he did. In a zoning challenge filed by Atiyeh, Pawlowski was subpoenaed to testify concerning what exactly happened. But he never did. The matter was resolved when Atyeh ended up owning the company about which he was complaining.

Mickey Thompson, a lawyer and Atiyeh’s COO, had called the Mayoral exemption a “get out of jail free” card for special developers who are on Fed Ed’s good side. Speaking of the blindfold on Lady Justice, Thompson added, “That blindfold’s been ripped off and the City is picking winners and losers.” I guess now that Atiyeh has been selected as one of the winners, the blindfold can stay off. Abe Atiyeh has suddenly transformed from being one of Fed Ed’s harshest critics – one who actually sued over the Neighborhood Millionaire Improvement Zone (MIZ) – into being a lapdog who has resumed making political contributions to Fed Ed and all his puppets.

Real Estate Deals Approved By Council

On Friday, I told you about the real estate deals (Union and Basin, Martin Luther King Highway) in which Honest Abe’s capital gain was at least $999,000. At the time, I was unable to determine whether this was actually approved by Council. But thanks to Richard Fegley, who was there, I know the spending plan was approved at Council’s April 16, 2014 meeting, although there was no indication at that time of what exactly was being purchased. Jeanette Eichenwald cast the sole No vote. The money did come from the City’s lease of its water and sewer funds.

This matter had been discussed in more detail the previous week, at a meeting of the Council as a Committee-of-the-whole. At that time, as noted by Randy Kraft in an exhaustive report for WFMZ-TV69, the proposal was opposed by residents Bonnie Bosco and Fegley.

Managing Director Francis Dougherty stated that a nearly nine vacant tract at the southwest corner of Union and Basin Streets, complete with a pre-existing billboard, was being purchased as an area where several trails can eventually connect.

I see.

Abe spent $350,000 to buy this property in December 2012. In June 2014, he sold this vacant tract, encumbered by a billboard easement in his favor, to the City for $950,000. How the hell does that happen?

The other property, nearly seven acres along Martin Luther King Highway, is the old Lebanon Fertilizer Company. Atiyeh walked away with $399,000 after unloading that property

There is no indication that any appraisals were provided to City Council so they could determine whether the City was being paid a fair price.

Suffice it to say that with $999,000 in hand, Honest Abe was clearly in a position to purchase the assets of Clinton Street Allentown Media LLC, the company that did have contracts with the City for billboards at 13 different locations.

Why Was Fed Ed So Afraid To Testify?

Why was Fed Ed so willing to give Honest Abe such a sweetheart deal? I doubt seriously that he was concerned very much about the legality of a new zoning ordinance that gave him incredible powers. But for some reason, he did not want to testify. He postponed his first appearance, and then the matter was just postponed generally.

Fed Ed may have been leery to discuss how he chose to deal with Clinton Street Allentown Media. I’ve been informed that Fed Ed’s campaign manager, Miked Fleck, was working as a “consultant” for that company.

Fleck later would become Atiyeh’s business consultant.

Clinton Street, a very successful cell tower company, was made up of Attorney Nicholas Pullen and Engineer Larry Romanowski. Pullen needed no consultant. He was an early Pawlowski campaign contributor and also was appointed by former Governor Ed Rendell as his Chief Counsel to the Pa. Comm’n on Crime and Delinquency. He managed Jim Eisenhower’s bid to be Attorney General. He’s currently a principal at Edgewater Partners, which describes itself as “[n]avigating the confluence of business and politics.” Pullen already appears to be a first class crony capitalist with no need for someone like Fleck. But he used him.

Fed Ed and Miked Fleck Funneled $1 Million to Honest Abe Atiyeh

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Sewage diving wil be part of next year’s Sportsfest

When Edwin Pawlowski first ran for Allentown Mayor, colorful entrepreneur Abe Atiyeh loved him. But things quickly changed. J.B. Reilly’s urban growth regime killed Atiyeh’s dreams of a hockey arena in Allentown, somewhere along Airport Road. The crony capitalists who really run Allentown wanted it downtown as an anchor for their newly created MIZ (Millionaire Improvement Zone). Then city officials even began throwing up roadblocks to Digiview, Abe’s billboard empire. But that’s old news. Honest Abe is in love again. And he has a million reasons.

Honest Abe sings Fed Ed’s praises now, calling him “the best mayor in the history of the city. I’ve never expected or gotten anything in return for a donation. I’ve never gotten any city contracts.” Of course he did. As I explained earlier this week, Honest Abe bought the billboard company with city contracts for billboards at 13 different locations. Fed Ed denied that the City was involved in any way. “There was no deal that was made here, per se, and in any way, shape or form,” he insisted. But there was. The City actually helped him purchase the company by buying two properties it did not need from Abe, allowing him to realize a $999,000 capital gain.

The first property, a series of three parcels along Union and Basin Streets near the city sewage plant, was purchased by Atiyeh’s Basin Street Development Company in December, 2012, for $350,000. In May, 2014, he sold it to the City of Allentown for $950,000. He also imposed a billboard easement, which would allow him to advertise at that site.

His capital gain here is at least $600,000, and is probably more because he encumbered the City’s property with a billboard easement in his favor.

The second property, located around 1900 Martin Luther King, Jr. Drive, is the remnant of an old fertilizer company, not very far from where a WPA wall recently collapsed as a result of City neglect. Much of this land, around 60%, is actually located in Salisbury Township instead of Allentown.

Atiyeh’s Cedar Holdings LLC purchased this property in February 2007, for $51,000. In May 2014, he sold it to the City for $450,000, for a $399,000 capital gain.

His total capital gain from both purchases in $999,000. The City paid him enough money to purchase the billboard company he wanted.

The person who made all of this possible, by Atiyeh’s own admission, is Miked Fleck, the Fed Ed campaign consultant who also acted as a business consultant.

It’s unclear to me whether Allentown City Council was ever asked to approve these purchases. I see no evidence of it in any of the City Council minutes during that time period. It might be there, but I’m unable to locate it.

Allentown blogger Michael Molovinsky, unaware that the City was buying these properties from Atiyeh, speculated at the time that the funding source was actually the water and sewer lease with Lehigh County Authority. Fed Ed has apparently been using it as a slush fund. Since Miked Fleck’s sister-in-law works as a “compliance” officer there, I’m sure every t is crossed and i is dotted.

Since that time, Atiyeh has been very grateful. He’s donated $12,500 to Pawlowski or his puppets. How much he has paid his “consultant” Fleck is a question best left to the Feds.

The ostensible reason for these purchases was so that the City could add to its parks. Cuz as you know, we all love to picnic next to a sewage plant or an abandoned fertilizer company. In fact, sewage diving is being added to next year’s Sportsfest. Instead of an A-town Throwdown, it will be the A-town Throwup.

The real reason for this purchase was to funnel $1 million into Honest Abe’s pockets.

Blogger’s Note: I have linked to a story written by Michael Molovinsky at the time these purchases were made. Although he was unaware that Abe Atiyeh was the  seller, or that he was walking away with a cool million, he knew something was wrong with this deal. This story just completes the puzzle.

Fed Ed’s Atiyeh Connection

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When you think of developer Abe Atiyeh, you might be thinking rehabs, nursing homes or even private prisons. But in recent years, he’s really begun to focus on billboards. He was trying to get his foot in the door in Allentown, but Doylestown-based Premier Media beat him to it with plans for a series of electronic billboards. Abe Atiyeh now operates those billboards himself. How did this happen when the City and Mayor both have vendettas against him, as Atiyeh has claimed?

Two words.

Miked Fleck.

Atiyeh hired Fleck.

“Mike had access to the mayor and the approval process, why not use a consultant for that?” argued Atiyeh.

Because it sure smells bad. Though Fleck and Pawlowski both insisted there would be a separation between Fleck’s business and political consulting, it’s very clear that Atiyeh was brought on board to sprinkle different campaigns and PACs with money.

Atiyeh insists there was no quid pro quo. Fleck was wearing a wire for 90 days, and I’m sure he has no reason to be worried at all.