The State College Town Centre project inched forward this week as borough council took steps to get two parcels for redevelopment into the hands of the project developer.
As required by the Pennsylvania Urban Redevelopment Act for implementation of a redevelopment area plan, borough council authorized conveying the borough-owned former Verizon Building at 224 S. Allen St. and the metered parking lot on Allen Street to the borough’s Redevelopment Authority.
The Redevelopment Authority will next enter into a development agreement with Highland Holding Company, which was selected in 2017 as the project developer. The borough will net $1.93 million from the sale, with $1.098 million going into capital reserves, and $832,000 to the Parking Fund to replace the 32 spaces located on the Allen Street Lot.
Highland Holding Group developed several options and in October 2018 presented a proposal for the project if it only includes the two borough-owned parcels. Plans included a new seven-story building with a cafe, hotel, apartments and a rooftop restaurant on the site of the current metered parking lot next to Cozy Thai. They also include a six-story building at 224 S. Allen St. with a restaurant incubator and food hall — akin to Pittsburgh’s Smallman Galley — community tenant space and co-working or office space.
The former Verizon building at 224 S. Allen St. is currently leased by Penn State for Happy Valley LunchBox, but the university already has plans to move the business accelerator to the planned new Center for Innovation, Making and Learning when it opens in 2021.
Highland Holding Group’s Alex Sahakian said last fall that the concept for a new 30,000 square feet building at the former Verizon building site is for a first floor with a dining hall and several restaurant kiosks in which selected chefs could test restaurant concepts in one or two-year intervals. Two floors would be for one or more community tenants, with discussions including the possible return of Discovery Space to downtown, and the fourth and fifth floors dedicated to co-working or office space.
A proposed 115,000 square foot building on the parking lot property could include a cafe and outdoor seating, 60 hotel rooms on three floors, condo units on two floors and a rooftop deck, possibly with a restaurant. It would have three levels of underground parking.
The borough’s agreement for conveying the properties includes restrictive covenants that will prohibit student housing, ‘sin’ uses and dangerous or noisy manufacturing activity.
The town center concept is meant to develop around and complement existing locales such as the Municipal Building, Schlow Library and Sidney Friedman Park.
Established in 2015 as the Allen Street Civic District, the redevelopment area is designed to also encompass the First National Bank property at 222 S. Allen St., the U.S. Post Office distribution facility off Fraser Street, and the Verizon central switching facility at the corner of South Allen Street and West Foster Avenue.
The project could grow if the bank and postal distribution properties are acquired and incorporated into the plans. Sahakian said last fall that discussions have been held with representatives for both, but that neither could entertain negotiations until Highland was in a position to move the project forward. Earlier discussions of the project have suggested while the distribution center could move, the post office could be incorporated into a new building.
If the additional properties were acquired, the project could also include a marketplace and additional parking, retail and restaurant spaces.
The switching facility is likely off the table because, Sahakian said, ‘It’s literally the hub of all the phone and data wiring in State College,’ and the cost redeveloping it would be nearly impossible.
Per the terms of the authorization for conveying the borough-owned properties, State College has repurchase options if the parcels are not redeveloped. If the parking area were destroyed but returned to the borough, State College would keep the $832,000. Highland also has a two-year option to expand the project if it acquires additional property in the certified redevelopment area.
This is the first Redevelopment Area proposal to be executed in the borough and its roots go back to the 2006 creation of the State College Redevelopment Authority, an entity authorized under the Pennsylvania Urban Redevelopment Law to focus on re-planning and redevelopment of certified areas for a variety of reasons. It acts as a kind of bridge in development of public-private projects.
Initial planning for the Allen Street redevelopment area encompassed Fairmount Avenue to Highland Alley, bounded by Fraser and Allen streets. As the town center concept came into focus, that area was split in half and the certified redevelopment area — the Allen Street Civic District — was bounded by Foster Avenue, Highland Alley, Allen Street and Fraser Street.
Planning director Ed LeClear said at the June 5 State College Planning Commission meeting that the borough will soon be looking to certify a second redevelopment area, the Fairmount Civic District, from Fairmount to Foster and Allen to Fraser.
Creating the redevelopment area is being done in preparation for whatever the future may hold for State College Area School District’s Fairmount Building. Long ago the home of State College High School, the Fairmount Building more recently housed the Delta program, which will move to the high school’s new north building on Westerly Parkway when it opens this coming school year.
SCASD has not decided on what it will do with the building, which is eligible for the newly established Local Economic Revitalization Tax Assistance. LERTA offers a graduated tax implementation on improvements to designated historic buildings in the borough to encourage rehabilitation for commercial purposes instead of demolition and new construction.
LeClear said the Redevelopment Authority has moved forward with feasibility studies for the Fairmount Building.
‘We had dialogue with the school district and they’ve got five other major construction projects they’re working on right now, so Fairmount not a high priority,’ LeClear said. ‘We’re trying to take some proactive actions so when it does come to a point where the school district has an idea of what they want to do with the building we’re best prepared to be nimble to interact with that, however that would be. I don’t know what their longterm interests are with that parcel.’
Planning commission is the entity charged with certifying a redevelopment area and adopting a plan. LeClear said the Fairmount Civic District will be brought to planning commission in July to start the process and a joint meeting with the Redevelopment Authority to discuss possibilities could be held in August.
