$1.8 Million Payment Due For Fraser Centre; Developer ‘Plugging Ahead’

Seventeen months since the projected groundbreaking for Fraser Centre, it remains unclear when construction may begin on the downtown State College project.

But there is one certainty.

By December 31, the development group leading the $50 million complex is required to make a $1.8 million payment to the borough government.

That payment, dictated under an agreement signed in October 2008, would finalize the group’s purchase of the land needed to build Fraser Centre.

Led by York-based Susquehanna Real Estate, the development group already made an initial payment of $1.475 million for the land. It includes just more than an acre at West Beaver Avenue and South Fraser Street, spanning several parcels owned by the borough.

Susquehanna CEO Jack Kay told StateCollege.com that ‘we sure hope’ to make the final, $1.8 million payment on time. He said the group is seeking the financing necessary to cover construction, land-acquisition and related expenses.

‘We’re plugging ahead as hard as we can,’ Kay said, lamenting the ‘very, very tough’ economic conditions.

‘It costs us time and money to not move forward, and no one wants to start this thing more than I do,’ he said. ‘ … We think this is a tremendous plus for the community. We’re committed to sticking it out and making it work.’

To help keep the plans viable, Susquehanna has tweaked some details. Condominiums, first expected to fill as many as seven floors of a 12-story tower, may be reduced to three floors. Four floors once tagged as residential may instead become office space and a 50-room boutique hotel.

Meanwhile, an enclosed pedestrian bridge has been added tentatively to the plans — at a projected extra cost of $375,000 to $400,000. The bridge would connect the Beaver Avenue parking garage to Fraser Centre, encouraging public use of both facilities, Kay said.

But two Borough Council members told StateCollege.com that the elected body should be receiving more details about the evolving plans. If the development group is unable to make its $1.8 million payment by December, the borough could begin to reclaim the property for another use.

Council member Don Hahn has asked for a formal, updated report on the project. The subject is scheduled for discussion at the council meeting on Monday night.

‘I do think they have been acting in good faith,’ Hahn said of Susquehanna. … (But) I don’t think Susquehanna has been acting with the utmost transparency, especially with regard to Borough Council.’

If the council sees no substantial progress on the project by summer’s end, Hahn said, ‘I think we should seriously consider our alternatives.’

Council member Silvi Lawrence said she wishes the council would receive more timely updates on Fraser Centre’s progress.

‘I’m sure the council would have other ideas that we could sort out, to see which would be most valid,’ she said. ‘ … It’s obvious that what was initially proposed isn’t going to work.’

Hahn and Lawrence have long voiced skepticism toward the Fraser Centre plans, though a majority of council members have supported the redevelopment concept. Kay said he would be happy to address all of council’s questions and concerns.

The borough partnered with the Downtown State College Improvement District several years ago to encourage Fraser Centre’s development. In turn, the DID joined forces with Susquehanna, trying to bolster the borough’s tax base, diversify downtown business and add jobs.

Already, Fraser Centre has received $2.5 million in state grant funding and another $2.5 million pledged through tax-increment financing. The borough Redevelopment Authority is attempting to secure $480,000 more in state support, money that would help finance public-infrastructure elements of the complex. 

It is expected to include a 10-screen movie cinema, retail and some green space.

Borough Council President Ron Filippelli said the plans are ‘in a critical phase.’ He said he doubts a groundbreaking will happen this summer, as some have hoped.

But speaking optimistically, Filippelli said, he thinks it could happen by the fall.

‘The project is changing somewhat to reflect the realities of the housing market,’ he said. ‘ … I think that’s promising.’

Likewise, borough Manager Tom Fountaine said he does not believe ‘there’s anything approaching default’ in the Fraser Centre planning process. He expects the project’s progress to be more clearly assessed within the next couple months, he said.

‘I think the positives well outweigh some of the delays,’ Kay said. ‘ … We’re working through the worst economic situation since the Depression.’

Earlier coverage: Borough Seeks More Money For Fraser Centre; Hotel Sought, Too