Bethlehem Township Commissioners are expected to discuss the Allentown arena project and their role in a lawsuit that could halt the project during a public meeting tonight at the township office building.

The “City of Allentown Neighborhood Improvement Zone,” is on the commissioners’ agenda as a “discussion item” tonight. The Morning Call reports that commissioners expect to discuss – for the first time publicly – Allentown’s offer to settle the lawsuit out of court.

The city plans to build a $220 million arena, office and hotel complex at Seventh and Hamilton streets. The project is being funded by a special 130-acre tax zone where all state and local income taxes will be used to develop properties inside the zone.

The use of this income from suburban residents who work inside the zone is what led 11 townships in Lehigh and Northampton counties -- including Bethlehem Township -- to file and join a lawsuit to stop the NIZ. They have been joined by a school district and the Pennsylvania Association of Township Supervisors.

The lawsuit has prevented Allentown from obtaining the financing it needs to complete construction.

In the settlement offer, the municipalities would get to keep their current earned income tax revenue and share in the anticipated increasing revenue from the zone in exchange for dropping the lawsuit.