A prominent Lehigh Valley developer is suing Allentown’s redevelopment authority after his bid to buy the former Allentown Toy Factory building was rejected.
Nat Hyman, owner of Hyman properties, filed a lawsuit in early August, claiming that the redevelopment authority’s “arbitrary, capricious, biased and bad-faith actions” led them to reject his “superior, higher-priced, unconditional cash” offer for the building.
The Redevelopment Authority paid $400,000 to acquire the building at 725 N. 10th St. in 2022. The toy factory closed in 2021.
This year, the authority sought bids from developers demonstrating “innovative, community-focused proposals that align with our redevelopment goals and deliver lasting value,” according to a statement from board Chair Christopher Raad.
According to court documents, Hyman offered $410,000 cash for the building, which he planned to convert into 20 studio apartments with rents averaging $900 and amenities including an exercise room, lobby, storage facilities and laundry facilities on each floor and 20 parking spaces.
However, the city selected a competing offer from developer Miln LLC, which was a “dual option” proposal. The first option would be a 12-unit “mixed income” apartment building with six designated affordable units at a purchase price of $350,000. The second option would convert the building into a childcare center and artisan studios for a price of $300,000.
Hyman argued that his offer is superior because it would create more units, offer the redevelopment authority more money for the building and offer more parking spaces in the dense Eighth Ward neighborhood.
“It would defy the entire purpose of the RFP for a proposal to be accepted which creates substantially less affordable housing units and which also provides less funds to RACA for the purchase,” Hyman’s attorney James Scanlon argues.
Further, the lawsuit alleges that developers with Miln LLC were invited to a private meeting with redevelopment authority officials June 10 to discuss their bid; Hyman was never offered the same opportunity. Hyman also alleges that redevelopment authority officials “made several disparaging comments” about Hyman Properties before his bid was considered.
Hyman’s lawyer is seeking an injunction against the redevelopment authority, asking the judge to set aside the authority’s offer to Miln LLC and name Hyman Properties as the successful bidder based on the city’s request-for-proposals criteria.
Redevelopment authority officials did not respond to requests for comment about the lawsuit.
Charles Smith, an attorney representing the redevelopment authority, has filed preliminary objections to Hyman’s lawsuit, arguing that the developer failed to establish himself as a party to the lawsuit and failed to include updated paperwork when submitting documents to the court, and asked the judge to dismiss the case.
Hyman’s lawsuit is not the first time the former toy factory building has been the subject of controversy.
An earlier plan to redevelop the factory failed in 2023, when the authority’s board was split 2-2 on an unsolicited offer by the Islamic Society of Allentown to buy the building and convert it into affordable housing units with a worship space on the first floor.
Advocates for the sale said it would provide a much-needed space for Allentown’s Muslim community, while opponents said that the sale would not be a financial benefit to the authority, and was unfair to other prospective buyers who did not have a chance to submit an offer on the building. The split vote meant the sale did not go through.
A hearing on Hyman’s complaint is scheduled for Sept. 17 in the Lehigh County Courthouse before Judge Thomas Capehart.
Lindsay Weber can be reached at Liweber@mcall.com.