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State College Council Considers Purchase of College Heights School

by on May 12, 2014 9:10 PM

There's another twist in the debate over which group should be allowed to buy the old College Heights School.

Under a new proposal, State College Borough Council would buy the property and then become a landlord by renting it out.

Council members discussed their options at a public meeting Monday night.

At issue is a pending sale between the State College Area School District and Penn State. The university wants to house University Press offices in the old school, which the district hasn't used as a school in years. Penn State has offered the district $400,000 for the property. The district wants to close the deal. However, the borough has first right of refusal on the property.

Making the situation more complicated, the Collaboration of Arts, Social Services and Education (CASE), which is an alliance of several non-profit groups like the United Way and AAUW, hopes borough officials will take ownership of the building and in turn possibly give CASE an opportunity to purchase the building.

Over the past several weeks, council has held several meetings regarding the property. A final decision is expected in June. During Monday's discussion, Councilwoman Theresa Lafer said one option is for the borough to purchase the property and then lease it to a variety of community service groups.

"It is at least something else that we should explore as a possibility," says Lafer. "I think it's something that should be looked at closely as an option."

The building needs significant renovations and repairs. Councilwoman Catherine Dauler argued that by the borough purchasing the property and then leasing it, it would make the costly repairs more feasible.

If the borough sold the property at auction, the borough would have less control over the ownership and use of the property, which seemed to be an undesirable outcome among council members.

"It would be completely out of our control and we would have put a lot of money into it without knowing how it would go," says Councilman Peter Morris.

Ultimately, council asked borough staff to obtain more information regarding the borough's options. Specifically, council wants to know what the taxing options for the property would be depending on which entity owned the property. Under the school district's ownership, the borough does not currently collect taxes on the property.

Additionally, council asked staff to obtain a more detailed explanation as to how interested parties would fund the purchase and necessary repairs.

In addition to the $400,000 sale, Penn State says the university would spend roughly $600,000 for initial renovations and then another $1 million in renovations over time. So far, CASE only has $200,000 donated by the United Way and OLLI. CASE says a bank has agreed to a $200,000 loan. Additionally, if CASE were to acquire the property, the group says additional donations would come in and the group would be eligible for various grants.

Another issue surrounding the property is the use of the property. Initially, when the school district obtained the property, it was mandated in the covenant that the property be used for an educational use. Borough Solicitor Terry Williams said Monday that requirement has now been met and an educational use moving forward is not required.

In April, Penn State, CASE and the school district spoke to council regarding their plans for the building.

Council will hold a public hearing June 2 to further discuss the proposed sale and whether the borough should exercise its right to first refusal. The general public will have another chance to speak about the issue at that meeting.

Any additional discussion will happen on June 9. Borough council will make a final decision on June 16.

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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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