Penn State Set to Buy University Club Property for $4 Million

Update: The Penn State Board of Trustees approved the purchase during its meeting on Friday, Feb. 18.

Between Porter Road to the east and North Atherton Street to the west, only one property on the north side of College Avenue through the heart of downtown State College is not owned by Penn State.

That’s about to change.

Pending approval by the full Board of Trustees on Friday, the university plans to purchase the .64-acre University Club property at 331 W. College Ave. for $4.07 million. The trustee Committee on Finance, Business and Capital Planning unanimously recommended approval of the acquisition during its meeting on Thursday morning.

The university intends to demolish the 108-year-old University Club building because of the extensive costs that would be required for renovations, which Senior Vice President for Finance and Business Sara Thorndike said was estimated to be “a couple million dollars.”

Demolition cost is estimated to be “just shy of a million dollars,” including “a fair amount” of asbestos abatement, according to Bill Sitzabee, vice president for facilities management and planning.

James Collins, president of the nonprofit University Club board, told StateCollege.com that the club will evaluate options for a new location. Proceeds from the sale will be maintained by the club, which is a 501c7 organization as a nonprofit social club, and will not be disbursed to any individuals.

The University Club is surrounded entirely by other Penn State properties, with the West Campus Steam Plant to the east, 101 N. Atherton St. (which was purchased by the university in 2020) to the west and the Applied Research Lab to the North.

What Penn State plans to do with the parcel remains unclear. The trustees’ meeting agenda states “the intent is to assemble the parcel with the adjoining University-owned property.”

“Our purpose really is to have the land for future opportunities,” Thorndike said, calling the property a “critical connection point.”

A Penn State spokesperson said the university is “evaluating various plans for the property” and will release information when a final decision is made.

Penn State sold the parcel to the University Club for $1 in 1913 for the sole use of constructing and operating a social club with residential rooms. The deed gave Penn State right of first refusal should the club sell the property.

The University Club hosted social events for club members, rented out its space for other events, and rented rooms to university students, faculty and staff with short-term lease options.

Collins said that as a deal neared the club stopped renting rooms. It has two tenants who were aware of the pending sale and are moving out by the end of the month.

The club has had no employees in recent years, instead contracting out for services.

A confluence of circumstances led the club to offer the property for sale to the university, Collins said.

Prior to the COVID-19 pandemic, the club had done well financially and accrued reserves it planned to use for renovations to the aging building. But with the pandemic “our population dwindled,” Collins said, and the reserves were needed to keep the club afloat.

At the same time, one of the University Club’s primary draws for renters was its location, but it “couldn’t compete” with the boom in construction of modern downtown apartment buildings, Collins said.

Those factors, along with the aging demographic of the club’s members and the condition of the building requiring extensive upkeep and renovations, led to the decision by the club’s board to offer Penn State what Collins called “an awesome gateway” to the University Park campus.

“We felt we were doing a good thing for us and for the university,” Collins said.

With the sale in the offing, the University Club has been donating furniture and other items from the building to local nonprofit organizations, including Out of the Cold: Centre County, Interfaith Human Services and Habitat for Humanity.

“We’re excited for our future, whatever that may be, and to see Penn State’s plans [for the property],” Collins said.