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State College Borough Council Takes Major Step to Purchase College Heights School

by on July 07, 2014 10:25 PM

Despite many concerns and questions raised, State College Borough Council decided Monday night to purchase the College Heights School and then lease the property to an alliance of non-profit groups.

With a 5 to 2 vote, council agreed to exercise the borough's right of first refusal with the North Atherton Street property owned by the school district. Council members Tom Daubert and Peter Morris voted against the measure.

The move requires the Collaboration of Arts, Social Services and Education (CASE) to sign a memorandum of understanding with the borough, which includes taking on the financial responsibility of roughly $1.5 million in estimated repairs, as well as signing a 20-year lease covering the $450,000 purchase cost.

All documents must be signed by council's next meeting on Monday, July 14. If CASE cannot sign the agreements by Monday, council could revisit its decision.

Council made the decision after architecture firm Fernsler Hutchinson estimated repairs, including bringing the building up to code and remove hazardous materials, would cost the borough between $1.55 and $1.75 million – in addition to the cost to purchase the property.

At issue for the last six months has been the pending sale between the State College Area School District and Penn State. The university agreed to pay the school district $400,000 for the property to house University Press offices, which the district hasn't used as a school in years. However, the borough has first right of refusal on the property, a right it has until July 16 to exercise.

After the school district announced its intent to sell the school to Penn State, CASE also expressed interest in buying the property. The group's 11 organizations, from social services groups like Centre County United Way to education groups like Mid-State Literacy, want to operate under one roof and share expenses. The intent is to make College Heights School a sort of community center that offers classes and services.

Council member Theresa Lafer has been a major proponent of the borough buying the building and then leasing to CASE. While many other council members questioned whether CASE could handle the financial responsibilities at the property, Lafer remained confident.

"One of the things we have to think about here is: Is this good for the community, whichever way we go and how does the community feel about it," Lafer says. "I believe CASE is capable of paying their rent and paying their share of the repairs over time."

Lafer acknowledged the borough would have to pay $450,000 upfront for CASE to pay back through rent over 20 years, however, she says the investment is necessary.

"I think that's exactly what local government is for, to make possible centers that are good for the community," says Lafer. "I'm not saying this is cheap and I'm not saying it's easy. I do think it's doable."

Councilman Evan Myers says the borough purchasing the school is a financial risk.

"It's still a million dollars. The money is the money. Somebody still has to make good on that money. We can slice this a whole bunch of ways, but fundamentally that's the issue," says Myers. "If CASE is unable to pay this over the long-term then the fiances come down to the government and the citizenry."

Still, later in the meeting, Myers said the measure is worth the financial risk.

"Maybe, if it's a big leap of faith, it's one we should take," says Myers.

On the other side, Daubert said the financial risk was too great for him to support the measure.

"There are so many thing that we don't know about. One of the most important things is I don't think we want to be landlords, I really don't," says Daubert. "I have a very difficult time on this. While I agree with the goals, I certainly do not think at this time and with the information we have we should exercise our right of first refusal"

Morris agreed the measure was too costly.

"I think that the problem is the amount of money is horrendous. The buckets of money ... are pretty full. It's a lot of money. And one of the things that we're supposed to be up here is prudent about the borough's money," says Morris.

Morris says he supports the concept of a community center downtown suggesting the borough visit the idea separately, perhaps appointing a committee to tackle the issue.

"After much soul searching I plan to vote against exercising first right of refusal with the understanding that once it's done we ought to start working on this idea of a community center," says Morris.

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Jennifer Miller is a reporter for StateCollege.com. She has worked in journalism since 2005. She's covered news at the local, state and national level with an emphasis on crime and local government.
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