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Penn State Won't Do 'Land Swap' for Toll Brothers Development

by on December 21, 2017 3:12 PM

After two years of protests, legal battles and attempted negotiations, it appears that Penn State's sale of 43.5 acres of land on Whitehall Road in Ferguson Township to developer Toll Brothers will move forward.

The university said in a statement on Thursday that it will not be selling to Toll Brothers a proposed alternate site on West College Avenue near the Penn State Blue Course for the developer's planned luxury student housing development.

Toll Brothers made an offer on the West College Avenue property in November with a letter of intent to the university. The offer came after the Nittany Valley Water Coalition, a group of residents opposed to development on the Whitehall tract because of potential effects on source water, offered several possible, university-owned alternatives for a "land swap" for the developer's planned 264-unit project, called The Cottages.

The university said it recently informed Toll Brothers that it has deemed the West College Avenue property "strategically important to the long-range health and growth of the University."

"Although Penn State has no immediate plans for the parcel, it would be irresponsible of the University to enter into negotiations for the West College Avenue property without an evaluation of the best use for the property and related impacts," the university statement said. "If and when the University decides the timing is appropriate to develop or sell the West College parcel, it will be through a responsible and deliberative process that will involve an open solicitation, as well as engagement with the impacted municipalities and community."

The university said it remains in a legally binding contract for sale of the Whitehall Road property. That agreement, the university says, was "the result of a complex process of requirements and approvals — including meeting numerous water, environmental, zoning and traffic regulations — that have involved a number of entities over the course of more than 12 years, including the township, state and the University’s Board of Trustees."

Toll Brothers, meanwhile, said in a statement on Wednesday night that it will honor the obligations of the Whitehall Road contract and remains interested in the West College Avenue property.

"Toll Brothers is bound by, and will meet, the contractual obligations on the Whitehall site with Penn State," the statement said. "We are, however, interested in the West College Avenue parcel, believe it is a viable site and have submitted an offer to Penn State. We are committed to continued dialog regarding the matter."

A Penn State spokesperson declined to say when the two parties would close on the Whitehall property, saying the school "does not share specific details of business transactions."

The finalization of the Whitehall Road sale could mean new legal action from the Nittany Valley Water Coalition, which has vowed to sue the university if the deal closed.

The group says it will ask a court to rule that Penn State is a a trustee of the Commonwealth with fiduciary obligations to protect public resources under the state's 1971 Environmental Rights Act. If a court were to rule that Penn State is not a state agency with those obligations and has "transformed itself from a public land grant institution into a fully private, non-governmental corporation," the coalition would ask that the university be stripped of its tax exemptions and public subsidies.

"We’ll be striking at the root of Penn State's hybrid legal status that has allowed it to become a tax-exempt, publicly-subsidized, privately-governed, for-profit corporation,” said coalition President Kelli Hoover, a Ferguson Township resident and an entomology professor at Penn State.

The action would be a Constitutional challenge, not a regulatory challenge, as the previous legal action was when the coalition argued the land development approval by Ferguson Township violated township ordinances and the state's Municipal Planning Code.

Penn State entered a contract in 2012 to sell the land to Toll Brothers for $13.5 million, contingent on approved use of the land by Ferguson Township. That approval came in late 2015 and spurred nearly two years of legal battles and protests by the coalition and its supporters, who say that stormwater and construction runoff would harm Slab Cabin Run and the nearby Harter-Thomas well fields, the source of drinking water for the majority of homes served by the State College Borough Water Authority, which provides water to the Centre Region.

Toll Brothers and Penn State said the site has undergone extensive testing and that the development plans meet or exceed local and state stormwater management regulations.

A victory for the coalition in the Centre County Court of Common Pleas was overturned earlier this year by Commonwealth Court, which ruled it had not appealed early enough in the approval process. In November the state Supreme Court denied the residents' petition for appeal. During the summer and early fall protestors camped out on the site before being evicted by the university in October. 

Members of the coalition, meanwhile, entered into talks with Toll Brothers and Penn State over potential alternate sites and in November, after two months of site study, the developer sent the university a letter of intent for its interest in the parcel on West College Avenue, also located in Ferguson Township. 

Coalition members have described Toll Brothers representatives as willing to work with them since proposing alternatives.

Earlier this month, the coalition said in a press release that it proposed mediation with Toll Brothers, Ferguson Township and Penn State to work out the details of zoning and land use on the West College property. Penn State has refused to participate, according to the coalition.

The university said in a statement last week that it had received the developer's letter of intent for the alternative site but that since then "no additional information has been provided regarding the development plans and related impacts and there have been no formal discussions or negotiations with Toll Brothers on the West College parcel."

Hoover said the coalition believes the Whitehall Road land deal exemplifies Penn State's "record of buying ecologically-sensitive farmland at artificially low prices (or accepting land donations), holding the land as tax-exempt while upzoning to increase its sales value, and then selling it for massive profit and risky development."

Coalition Vice President Katherine Watt said Penn State's status allows it to escape the accountability to which both public and private institutions would be subjected.

“As a quasi-public, quasi-private corporation, it evades both public accountability through public elections of trustees, transparent, due-process decision procedures, and compliance with state Right to Know and ethics laws, and private corporate accountability through share issues, purchase and sale of shares by shareholders, and shareholder elections of governing directors,” Watt said.



Geoff Rushton is managing editor for StateCollege.com. Contact him at geoff.rushton@statecollege.com or find him on Twitter at @geoffrushton.
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