Even Ed LeClear, the State College Borough director of planning and community development, is wondering when the market for luxury high-rise apartment buildings will dry up.
He said the borough hasn’t seen any new plans for more luxury developments downtown in the past year, but with three new projects underway, State College continues to grow upward.
“I often wonder when are you going to run out of that market, but what do I know? These guys are still building it,” said LeClear.
He said the groups who are building the high-rises have done their research and feel there is a market for the luxury apartments in the area. That goes along with a national trend in the country.
“But, when you look at 6,200 to 6,400 beds (3,200 beds downtown and 3,200 beds in surrounding townships) coming into the region when [Penn State] enrollment is essentially stagnant, you have to think at some time that, yes, maybe we are under-supplied for a while historically, but you have to think that now we will have over-supply.”
LeClear said State College was actually a little behind the initial boom of luxury apartments for students, and that may be why there is such a high number of the projects in recent years. With the 12-story high-rise The Standard set to join the Fraser Centre and Metropolitan on the west side of town, and the 12-story high-rise and Penn State Hillel under construction on Garner Street joining the Rise on the east side of downtown, the landscape of State College is changing.
MAINTAIN THE SMALL TOWN FEEL
But the goal of the borough is to maintain the small town feel, especially in the heart of downtown on the Allen Street block.
“The focus has always been to push the higher development to the edges and create something of a U, because we didn’t want to damage that Main Street feel and context that we have, while also recognizing that the borough did need somewhere to grow, so those areas made the most sense,” said LeClear.
He said that after a 2013 change in zoning that allowed projects like the Standard on the corner of College and Atherton across from the Metropolitan, the borough removed the 2013 amendment so as to not have more student high-rise apartments on that side of town.
“You can still build Fraser Centre, but you could not build the Metropolitan on that side of town any longer,” said LeClear, as the Fraser Centre includes a hotel and condominium instead of student housing. LeClear said there is opportunity to build student high-rises on the east side of town, east of the McAllister Street parking deck, which is what is happening on the Garner Street lot currently under construction.
PARKING
With all the new housing units, parking is something that is a concern for the borough. LeClear said most of the new projects are required to have parking garages underneath the structure, but he said this causes the height of the building to increase. He said the borough is looking at potentially building lots downtown that can provide parking for business and commuters, but they need to be in areas that are visible and close enough to businesses. He said more parking would help encourage business to come to or stay in the borough, which is something State College is trying to promote.
“To get to a scale that would encourage development has a lot to do with how parking is being handled, and right now the code drives all the parking into the subsurface lots, so when you are seeing all these 12-story buildings, they could be built at a lower height, if we weren’t requiring all the parking to be on sight. We are trying to find a better recipe for how we handle parking while still maintaining spaces that are going to be within the system, so to speak” said LeClear.
“One of the things that worked well for Fraser Centre was we allowed some of the hotel spaces to be in the Beaver Garage, so we are looking at how we can potentially build some additional decks that are publicly owned and publicly available, and then some of those spaces are privately contracted. … If we really want to see, say five-story redevelopment, we need to find some ways we can get that parking so it doesn’t have to be built right on that parcel.”
Another parking issue is the influx of Uber and GrubHub drivers who are idling in parking spaces waiting for customers to call or dropping off orders. While LeClear said there is no data showing this as a problem or not being a problem, many business owners are seeing a growing occurrence of these drivers in metered spaces waiting and not paying the meter. As new buildings are constructed, developers are looking at including areas where commercial drivers can wait. LeClear said this is a common concern around the country, so the borough is looking at other municipalities’ plans concerning the issue for guidance.
ENCOURAGE BUSINESS
Long-term, as far as the space that is being built, the hope for the borough is to encourage more business downtown, including not just commercial retail spaces, but office space for companies, as well. He said the area in general has a lot to offer startups, and with second-floor office space now being marketed at the Metropolitan after first working on the residential and retail aspect of the building, it will be interesting to see what happens.
“This is something of an experimental time as far as that square footage. Council has made it a priority for a while to get Class A office space back into downtown, and now we are going to finally see it. And, our hope is with the work with Penn State and Invent Penn State and the innovation ecosystem that we are trying to build, that we are going to see more of these startups and hopefully we will have space for them to go,” said LeClear.
With the office space available there, and also with the upcoming Standard having 50,000 square feet of commercial space, along with other projects, State College is looking at a total of 253,000 feet in newly constructed commercial square footage between 2016 to fall 2021, so there will soon be plenty of space available for these potential companies.
“We are finally going to have some space built, so now we are looking at what it is going to take to get some businesses in there at the price point that they need to be,” said LeClear.
LOANS
Another way they borough is looking to encourage businesses to come in, is to potentially help them with fitting their rental space to their business needs through low- or no-interest loans.
Furthermore, some of the older buildings also need a lot of costly work in order to meet ADA and other code restrictions. This is another thing the borough is potentially looking to help businesses handle through loans, so that they can make older building more viable. An example is the luxury hotel that was planned for Glennland Building on Pugh and Beaver.
“When they sat down and really looked at what was necessary to do that from a building code stand point, it was too cost prohibitive. So that is a good example of how the public may need to be involved to bridge some gaps financially to make the project work,” said LeClear.
“There has been a of interest in the building, so I am hopeful that someone will step forward that has the resources to do it, but I am concerned that there will be too big of a financial gap. So it may be something that we need to look at how to help. There are a number of ways that local governments’ tax authorities can assist.”
HOUSING
With all the business that they hope to draw in, housing for employees is a concern. LeClear said the borough is aware that it is already a problem, with workers and families competing with the student housing market that doesn’t necessarily line up, leaving costs high and units not available.
“We really do have a need for non-student rentals. It is very challenging. We hear this from a lot of businesses that want to relocate or grow in the region who are saying that their workforce just has an incredibly hard time (finding housing) because they are competing with the student housing market,” said LeClear. “But, you have seen a lot more for-rent signs in the last couple of years, so I think that is starting to open up a bit, but that is a need that we continue to hear.”
When he talks about affordable workforce housing, he said the need is for all — middle-income families and workers, not just low-income.
“This is going to be an opportunity in the coming years. How do we get more good-quality, safe and affordable space? We obviously are not going to be competing with the high-end luxury.”
A space that he sees as a possible solution is in some of the older student housing units. He said with assistance from nonprofits such as Housing Transitions, the borough has been looking at potentially buying some smaller traditional student housing units and rehabbing them to make them into mixed-income workforce housing.
