A decade after Penn State constructed one building at the Philadelphia Navy Yard and renovated another, the university is selling both properties for $18.5 million.
Penn State plans to sell 4960 S.12th St., known as Building 661, to the International Brotherhood of Electrical Workers Local 98 for $11.25 million and 1101 Kitty Hawk Avenue, known as Building 7R, to the Electrical Workers Joint Apprenticeship and Training Trust Fund for $7.25 million. The trustee Committee on Finance, Business and Capital Planning recommended approval during a meeting on Thursday, and the full board is expected to approve the sales during its meeting on Friday afternoon at the Penn State Behrend campus in Erie.
The buildings had become underused while still costly to own, according to university officials.
The board approved in 2013 developing the two buildings for a total project cost of $39 million, funded in large part by state and federal grants. University spokesperson Wyatt DuBois wrote in an email on Thursday that the cost included work to meet specific needs, such as construction of “advanced laboratories with the latest technology for research and teaching.”
Building 661 is a 38,000-square-foot structure constructed by the Navy in 1942. Building 7R is a 25,200-square-foot facility that opened in 2014. Located across the street from each other in the mixed-use business and industry development, the two facilities were developed for energy-efficient building research and served as home to the Consortium for Building Energy Innovation, a collective of university, national and private sector researchers, until the initiative ended in 2016.
In addition to research, the complex was used for academic programming, administrative offices, Agricultural Extension, a startup business incubator and event space.
When the buildings were renovated and constructed, then-Vice President for Research Hank Foley said the project was expected to be an “economic engine” that would “continue for many years to come.”
A brief presentation to the board committee on Thursday stated that “carrying costs are significant for Penn State and use of buildings and planned revenues have not transpired.”
The properties “were underutilized recently,” DuBois wrote, and Penn State offices that remained were moved to other locations so the Navy Yard buildings could be sold.
“The sale will allow Penn State to recoup all of the university funding used to renovate and construct the buildings,” DuBois added.
State officials approved the university’s request to sell the buildings, and because of outstanding tax-exempt debt, the IRS requires the proceeds to go to the commonwealth.
Sara Thorndike, senior vice president for finance and business, said the commonwealth will then give the proceeds to Penn State for new capital projects within the next two years.
