STATE COLLEGE — A boutique hotel, restaurant incubator, the possible return of Discovery Space to downtown and more are among the latest plans for State College’s long-discussed Town Centre project on the 200 block of South Allen Street.
At a joint work session of borough council and planning commission Oct. 8, Alex Sahakian, of Highland Holding Group, the State College developer selected last year by the borough for the project, gave an overview of potential plans for two borough-owned properties and the next steps needed to move forward.
Sahakian said if the project proceeds, the current plans call for a new seven-story building with a cafe, hotel, apartments and a rooftop restaurant on the site of the current metered parking lot. They also include a six-story building at 224 S. Allen St. with a restaurant incubator and food hall — akin to Pittsburgh’s acclaimed Smallman Galley — community tenant space and co-working or office space.
“Being local, we had the advantage to meet with really a wide variety of stakeholders,” Sahakian said. “What we saw was so much enthusiasm in the community to do something here that would be transformative.”
The Town Centre concept officially dates back to 2015 with the establishment of the Allen Street Civic District, but its roots go back even further to the 2006 creation of State College Redevelopment Authority, an entity designed for focused redevelopment initiatives. From there, the Fairmount Civic District was created and later narrowed to the Allen Street Civic District, which also is bordered by West Foster Avenue, South Fraser Street and Highland Alley.
The concept is meant to develop around and complement existing locales such as the Municipal Building, Schlow Library and Sidney Friedman Park.
Plans to move forward include two parcels in that district — the metered parking lot next to Cozy Thai and the former Verizon building at 224 S. Allen St., which is currently leased by Penn State for Happy Valley LaunchBox. Penn State already plans to move Happy Valley LaunchBox, which has leased the existing building since 2016, to a new building planned for the site of the current James Building on South Burrowes Street.
The district also is designed to 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.
For now, the bank and postal distribution properties are not included in the plans. Sahakian said that discussions have been held with representatives for both, but that neither can entertain negotiations until Highland is in a position to move the project forward — which will require approvals from borough council. Previous discussions of the project have suggested while the distribution center could move, the post office could be incorporated into a new building.
The Verizon switching facility is off the table.
“Due to the amount of fiber optic and copper wiring that terminates there, it’s literally the hub of all the phone and data wiring in State College,” Sahakian said. “Redeveloping that site would almost be impossible to cost-justify.”
The new building at 224 S. Allen St. would be 30,000 square feet, with the 7,000-square-foot first floor dedicated to a restaurant incubator and dining hall. Sahakian explained that it would have three or four kitchen kiosks, and in one-to-two year intervals, chefs would be invited to submit ideas. The process would be curated and selected chefs would have the opportunity to test their concept without having to commit to the expense of opening a restaurant on their own. It also would give patrons a variety of new dining experiences.
“Hopefully, it’s not only a cool and happening place right now, but it also leads to four or five or six or seven restaurants over the coming years that wind up landing and becoming permanent fixtures in our community,” Sahakian said.
Two floors totaling 15,000 square feet would be for one or more community tenants. That could be Discovery Space, which the borough has long envisioned as part of the Town Centre concept. The interactive children’s science museum moved last year from its original space on West Foster Avenue to a larger location on North Atherton Street. Sahakian said his group has met with Discovery Space and “they’re very interested in pursuing discussion.”
The fourth and fifth floors would have 8,000 square feet for co-working or office space.
The new building on the Allen Street parking lot property, meanwhile, would be 115,000 gross square feet, with a cafe and outdoor seating on the first floor, as well as the hotel lobby. The next three floors would have 60 hotel rooms, and floors 5 and 6 would have a total of 12 studio and two-bedroom condo units. A rooftop deck with shared amenities, potentially with a restaurant, would be set back and not visible from the street. Three levels of underground parking would have 75 spaces for hotel guests and residents. Sahakian said his understanding is that the lost public parking will be made up in the parking garage being planned as a partnership between the borough and Days Inn.
He added that the condos would be higher-end, but would not be in the $1 million range like those at Fraser Centre. As part of the terms of the project, a deed restriction would be placed on the building preventing it from use as undergraduate student housing.
“There’s a lot of enthusiasm in our community to do something that’s not targeting students,” Sahakian said. “We need the students here, obviously. But at the same time it’s also OK for us to start to plan to have another avenue of development.”
Council member Theresa Lafer said she would like to see the apartments be priced to be affordable to middle-class residents. Sahakian said Highland is willing to explore lower costs, but noted that as sale prices for the residential units come down, other areas would have to be found to mitigate financial impact.
He also said that the hotel brings some financial certainty to the project. A feasibility study already has been completed and a bank has shown interest in financing.
Sahakian said that community members have expressed a need for a better variety of food options and more spaces for art in the downtown. Barry Gordon, of OGP Architects, which is working with Highland on the project, said the facade of the hotel could have a large decorative art piece and that local art could be incorporated throughout the lobby and rooftop.
Leaders from Penn State’s College of Arts and Architecture and the Art Alliance of Central PA, as well as others in the local arts community, have expressed enthusiasm about being involved in the project, Sahakian said.
“We can get all these people to the table and really do something interesting,” Sahakian said. “But we can’t do it at this stage. We need to know we can move forward and be able to dedicate the time and resources to get everybody there.”
He said he hopes that in November the borough will convey the two properties to the Redevelopment Authority, which in turn will draft an agreement with a binding option for Highland to purchase them. The estimated sale price, based on a borough-commissioned appraisal, will be $1.8 million, Sahakian said.
From there, Highland would have two years to purchase the properties, and during that time would work to acquire the bank and post office sites as well. The developer would have three years from the end of the option period to complete construction.
Borough planning director Ed LeClear said based on whether the other properties can be acquired, it will be a process requiring approval of two or three proposals. Other potential features discussed in the past have included a marketplace and retail spaces, as well as additional restaurants and residential units.
LeClear added that it does not appear eminent domain can be used to acquire the other properties and that the bank has not been interested in working through the Redevelopment Authority.
“I think now we’re at a critical juncture to try to move to the next step,” Sahakian said.
