State College, PA - Centre County - Central Pennsylvania - Home of Penn State University

More State Money Secured for Fraser Centre Project

on September 15, 2010 8:10 AM

The planned Fraser Centre project has secured an extra $1.5 million in government grant funding via the state Redevelopment Assistance Capital Program, or RACP, a downtown executive said.

Jody Alessandrine, executive director for the Downtown State College Improvement District, said the additional grant money was secured in mid-August. He said he asked for the money, delivered through the office of Gov. Ed Rendell, back in May.

The added money will bring to $4 million the total amount of RACP support received by the $50 million project. It won a $2.5 million RACP commitment back in 2007.

Alessandrine said he understands the new $1.5 million is coming from RACP funds that had been allocated to other projects in Pennsylvania but went unused.

"We hope that (the extra state support) will help with the financing" from private lenders, Alessandrine said. "That will be an even better sell to the lending institutions that Susquehanna Real Estate is dealing with."

York-based Susquehanna Real Estate is leading the multi-use redevelopment project, planned for the 100 block of South Fraser Street. Work was to have begun in 2008, but complications with financing and a weakened economy have helped to delay a groundbreaking, organizers have said. They're still aiming to begin construction this fall, Alessandrine said.

He said the public money will go toward elements of the project dubbed public -- notably the infrastructure for an anticipated 10-screen cinema -- and not the upscale condominiums planned there. The cinema is to include public space, including a public meeting room.

In addition, the state grants need to be matched by an equal financial commitment on the local level. Matching the $2.5 million pledged by the state in 2007, local officials have already committed to a tax-increment-financing plan. That TIF plan, worth $2.5 million in local funds, will allow a portion of the new property-tax revenue generated by the project to go toward its debt obligations.

Alessandrine said project planners are identifying privately financed parts of Fraser Centre that can serve as a local match for the new, $1.5 million state pledge.

He said that new state money also will send "an even stronger message" to retailers and hotel operators, which Susquehanna is trying to draw into Fraser Centre. The Borough Council generally has supported the project as a means for revitalizing the downtown and rejuvenating the borough's stagnant tax base. 

Also advocated and supported by the Downtown State College Improvement District, it's expected to include a mix of condominiums, residential parking, offices and stores.

But the state funding has not been without controversy, as skeptics for years have wondered whether the project is sustainable and an appropriate use of taxpayer funds.

Still, separate of the RACP monies, the borough this summer applied for another stream of state support for Fraser Centre -- this one through the state Housing and Community Development Program. That application seeks as much as $480,000 in supplemental funding. As of last week, there was no word on whether the application has been accepted.

Overall, total government support for the project, including the TIF initiative, has reached at least $6.5 million.

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