State College Borough Working on Deal to Acquire Addison Court, Maintain Low-Income Senior Apartments

State College Borough is working on an agreement to buy Arnold Addison Court and ensure it is maintained as low-income apartments for seniors and people with disabilities, a move that would end months of uncertainty and angst for the downtown building’s residents.

“During the past few months, the borough has been meeting with the owner of Addison Court to discuss the continuation of the Low Income Housing Tax Credit and the safe continued occupation by the residents,” Borough Council President Evan Myers said at the start of Monday night’s meeting. “At this time, the legal agreements are still being worked out, but the borough and the owner are close to an agreement for the borough to purchase Addison Court and work with the current owner to keep the building as affordable senior housing.”

Myers did not disclose specifics of the potential deal, saying that no additional information could be provided yet because it is an ongoing negotiation.

Any tentative agreement would be voted on by council during a regular meeting, he added.

Ferguson Township-based real estate developer PrimeCore put the 120 E. Beaver Ave. under contract late last year and completed the purchase in June for $6.9 million from Beaver Court Associates LP. PrimeCore initially submitted a land development plan in December to raze the existing building and construct a new seven-story development that mirrors the neighboring Pugh Centre, with ground-floor commercial space and six floors of apartments geared toward college students.

In May, however, following months of criticism from community members and concerns from the building’s tenants, PrimeCore CEO Ara Kervandjian said his “plan A” is now to pursue Low-Income Housing Tax Credits that would subsidize rehabilitation of the existing building and require that it remain income-limited and rent-restricted for another 40 years.

The previous affordability requirements of the tax credits used to construct the building in 1994 expired at the end of 2024, and in December tenants received notice from property manager Calibre Residential informing them that all current leases would have an end date of Nov. 30, 2026.

Staff from the borough and the Pennsylvania Housing Finance Agency, which administers the federal LIHTC program in the commonwealth, reviewed legal documents related to the property and determined a deed covenant prohibits the eviction of tenants who resided there as of Dec. 31, 2024 without cause before Dec. 31, 2027 because of a required three-year wind-down period after the affordability requirements expired.

PrimeCore’s pivot to pursuing the tax credits provided another measure of relief, but uncertainty and concerns have remained among tenants and their advocates.

Kervandjian has been successful in obtaining LIHTC for multiple low-income housing projects in Centre County, but they aren’t guaranteed. If awarded, he said he believes the building would require substantial renovations, some of which would be mandated by the tax credit program, and he was unsure whether the work would require the temporary displacement of residents.

When PrimeCore was pursuing the new building as its primary plan, Kervandjian pledged the company would help Addison Court tenants find new homes. If a temporary displacement were required for renovations, he has said his company would work with the tenants to ensure they had somewhere to live during the construction and to help those who wished to move permanently to different housing.

If the tax credits were not awarded, though, Kervandjian said he expected PrimeCore would return to the original plan of constructing a new student apartment building, and the company continues to seek a zoning change that would increase the height limit for potential new construction on the Addison Court site.

Addison Court is 75 feet high, but in 1999 council amended the zoning to lower the height limit for any future building to 65 feet. In 2007, council further updated the zoning to limit building heights to 45 feet on the south side of Beaver Avenue within 200 feet east and west of the 200 block of South Allen Street. The aim was to prevent tall buildings that would create a “canyon” effect at the corners of South Allen Street and Beaver Avenue.

The change bifurcated the Addison Court property so that the height limit is 65 feet on the eastern half of the site and 45 feet on the western half. PrimeCore requested a zoning text amendment to reduce the area for the 45-foot height limit to within 100 feet of Allen Street, arguing that it would maintain the intent and have no impact on other future development.

Kervandjian told the State College Planning Commission that he will make a good-faith effort to obtain the credits, but that the process is costly and time-consuming. If it is unsuccessful, he said at a meeting in June, constructing the new building with a uniform height of 65 feet, rather than one split by differing height limits, will “be more efficient in design and in structure and aesthetically.”

The commission voted 3-2 to recommend that Borough Council deny the request.

Kervandjian added that if the tax credits weren’t awarded, the property would likely be redeveloped, whether by him or someone else, and it would not be for low-income housing.

A deal with the borough to acquire the property would prevent that from happening. Still, the zoning text amendment request remains on the table.

Council voted unanimously and without discussion on Monday night to schedule a public hearing on the proposed change for Sept. 9.