Updated 4:50 p.m. on Feb. 21 to reflect approval by the full Penn State Board of Trustees.
An approximately 5-acre parcel at Penn State’s Innovation Park will be leased to a developer for construction of an acute care rehabilitation hospital.
The Penn State Board of Trustees Committee on Finance and Investment on Thursday morning recommended approval of the ground lease to Catalyst Healthcare Real Estate, the development partner of Cumberland County-based PAM Health, which would operate the 42-bed physical rehabilitation facility at the northeastern fringe of the University Park campus.
The full board unanimously approved the deal on Friday.
Under the terms of the agreement, Penn State will receive a lump sum payment of $875,000 at the start of the initial 50-year lease followed by $67,518 per year, with a 5% escalator every five years. The lease will also include two 15-year renewal options.
The property, located along Innovation Boulevard near Interstate 99, is part of an 85-acre parcel acquired by the university in 1990 for $1 million.
Phil Schuck, executive vice president of Catalyst, told College Township Council in January that the estimated $40 million in-patient rehabilitation hospital is expected to be two stories and about 50,000 square feet.
It would employ about 120 people and would have an average patient stay is 12.5 days.
“It’s typically a patient coming from a hospital — either complex surgery, stroke, could be a spine event, brain injury — and they’re not quite ready to go home but the hospital is ready to [discharge] them out of the hospital,” Schuck said. “This is kind of a transitionary step to get better and then go back to their homes.”
PAM Health is a national health care provider founded and led by Penn State alumnus Anthony Misitano. The Misitano family and PAM Health recently donated $25 million to Penn State’s Beaver Stadium renovation project.
Catalyst and PAM Health hope to begin construction in October, Schuck said in January, but beyond completing the ground lease, the project will need to get through a few planning and zoning requirements.
It will require a subdivision of the 5 acres from the larger parcel and a rezoning from University Planned District 14 to Research and Business Park District, which permits hospitals and medical centers.
The land sits adjacent to the existing Innovation Park boundary and just outside the Regional Growth Boundary (RGB) and Sewer Service Area (SSA). Though extending the RGB is often a lengthy endeavor, the rehabilitation hospital project is one of several planned in College Township that can go through a shortened, streamlined process.
Under the 2023 Centre Region RGB and SSA implementation agreement, each Centre Region municipality can expand the boundary by up to 12 acres and 50 equivalent dwelling units (the measurement for wastewater system usage) over five years. Such smaller expansions require review by the Centre Regional Planning Agency and the Centre Regional Planning Commission before municipal approval, but do not have to go through the longer process involving General Forum approval.
A proposed Penn State Applied Research Lab building at Innovation Park and ClearWater Conservancy’s new Community Conservation Center are also expected to go through the shortened RGB/SSA expansion process.
