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New Commitments Critical for Fraser Centre; Erickson Comments after PSU Reversal

on December 21, 2011 9:43 AM

With Penn State having backed out of the planned Fraser Centre, the timing of anticipated construction now hinges on two things.

One is how quickly the lead developer, Susquehanna Real Estate, can fill the two office-space floors that the university had committed to using, Susquehanna Marketing Manager Kim Lentz said.

The other, she said in an e-mail message, is "whether our cinema operator is willing to stay in the project without the PSU daytime theatre/classroom leases." (The university had, until Tuesday, planned to hold some daytime classes in the 10-screen cinema that's anticipated at Fraser Centre.)

Overall, Penn State had planned to use 34,000 square feet in Fraser Centre -- not including the cinema. That represented about 18 percent of the total commitments that Susquehanna needs in order to secure construction financing for the project.

Susquehanna had announced in October that it had just reached the commitment threshold it needed to obtain construction financing. Having reached that threshold -- 80 percent of total square footage -- Susquehanna planned to secure financing and begin construction this winter, it reported at the time.

Now, though, that expectation is uncertain at best.

Reached Tuesday, university spokeswoman Annemarie Mountz said the Penn State pulled back from the project for financial reasons. The university is looking to "better utilize the space we have on campus"; plus, "we have some serious reservations about establishing classrooms outside the core campus," she said.

Fraser Centre is to be located in State College at Fraser Street and West Beaver Avenue, about a block from University Park.

Contacted via e-mail, Penn State President Rodney Erickson said the university didn't actually ever finalize lease arrangements for Fraser Centre. Thus, he wrote, "it's not possible to say precisely" how much money Penn State will save by removing itself from the project.

"There have been on-again, off-again internal discussions about our involvement (in Fraser Centre) over the past several years along with the ebb and flow of the project," Erickson wrote to StateCollege.com. "Over the course of the past few months, we began to look even more intensively at our classroom and office-space requirements and our future on-campus capital plans and how Fraser Centre might or might not fit into those plans."

Erickson also responded to allegations made by Michael D. Ross, executive of Minnesota-based United Entertainment Corp. A longtime critic of the Fraser Centre plans, Ross has alleged that Penn State, under its prior leadership, engaged in questionable back-room dealing to support the downtown project. (Ross owns two Centre Region cinemas that would compete with Fraser Centre for big-screen business.)

Answering succinctly, Erickson said the university has not engaged in any kind of untoward dealings or negotiations with regard to Fraser Centre.

Lentz has said Susquehanna is forging ahead with the project and has seen substantial interest in Fraser Centre from the retail sector. More details are available via the news story posted Tuesday.

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