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State College Council Delays Decision on College Heights School

by on June 09, 2014 9:46 PM

State College Borough Council informally agreed Monday to order an inspection of the College Heights School before making a decision on what to do with the property.

At a public work session Monday night, a type of meeting the state's Sunshine Law prohibits council members from taking any official action, council gave administrators the go ahead to hire an inspector by the act of several members nodding their heads in the affirmative.

That move allows the administration to spend roughly $5,000 to hire an engineer inspector to take a look at what renovations are necessary for the school.

At issue is a pending sale between the State College Area School District and Penn State. The university has 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.

At the same time, the Collaboration of Arts, Social Services and Education (CASE), which is an alliance of several non-profit groups, hopes the borough will take ownership of the building and in turn give CASE an opportunity to lease the building.

Over the last several weeks, council has solicited feedback from Penn State, the school district, CASE, the College Heights Neighborhood Association and residents.

Monday night was supposed to be council's final opportunity to discuss the matter before taking a final vote at its June 16 meeting. However, council's apparent decision to hire a building inspector will delay the decision. Borough Manager Tom Fountaine says such a step would require the vote to be delayed until at least July 7. Council must make a final decision on the matter by mid-July.

Several council members expressed concern regarding the financial stability of CASE. Specifically, council questioned whether the non-profit group could afford the building's repairs, which Penn State estimates would likely be more than $1 million.

Meanwhile, CASE says it has $200,000 donated by two members, the United Way of Centre County and OLLI. CASE also says a bank has agreed to a $200,000 loan. If CASE were to acquire the property, the group says additional donations would come in and the group would be eligible for various grants.

Several council members said Monday night they want CASE to present more concrete financial plans before council votes on the matter.

If council decided to acquire the property and then lease it to CASE, borough Solicitor Terry Williams says in advance of the purchase, CASE would sign a memorandum of understanding with the borough.

Under the document, CASE would agree to maintain taxability of the property and pay rent over at least a 20 year lease with the idea that the accumulated rent collected would cover the roughly $450,000 the borough spends to acquire the property.

Additionally, Williams says the agreement would require CASE to be responsible for renovations to bring the building up to code as well as address storm water issues. CASE would also be required to maintain the building's façade and front sign.

Meanwhile, Williams says Penn State has agreed to address storm water issues, maintain the building's façade and signage, and establish a landscaping buffer between the rear of the property and nearby residences. The university has also agreed to provide the borough with first right of refusal should Penn State sell the property in the future.

Council also addressed the public's concern over the possibility of the borough purchasing the property and becoming a landlord. Specifically, Councilwoman Catherin Dauler noted the borough has previously purchased the current borough building and owns municipal parking garages with leased space.

"We are in some ways landlords," Dauler says. "This is not something that we've never done before. ... We certainly have the legal standing, I believe to do it again."

Councilman Peter Morris said Monday night he is opposed to the borough purchasing the building. However, he says he may change his mind before a final vote. While Morris says he is a strong supporter of CASE, he thinks there is a risk CASE could face financial troubles and subsequently place the borough in a poor financial position.

"It could well be the building is at that point sitting empty and that worst case scenario really bothers me and ... I can't take that risk," Morris says.

Meanwhile, Lafer says if the borough decides not to purchase the building, officials should assist CASE with finding a headquarters in the borough.

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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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