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CORE COMMITMENT: It starts with residential

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Susquehanna Township-based Vartan Group Inc. opened the mixed-use 1500 Condominium at Sixth and Reily streets in Harrisburg last year. Photo/Amy Spangler
Susquehanna Township-based Vartan Group Inc. opened the mixed-use 1500 Condominium at Sixth and Reily streets in Harrisburg last year. Photo/Amy Spangler

Grocery stores and more national brands, including retailers, are often answers that come to mind when the question “What are we trying to attract to Harrisburg?” is brought up to the city's core developers.

"I think there is a trend nationally to reurbanize," said H. Ralph Vartan, CEO of the Vartan Group.

As new construction and redevelopment of residential sites help add to the population and bolster the look of various neighborhoods in Harrisburg, property values are likely to go up, which should entice other development projects, said Matt Tunnell, senior vice president at GreenWorks Development LLC.

"They do look at demographics," he said of retailers and grocery chains. "Residential development will help to drive it."

However, he said he sees more "mom-and-pop" shops before there is growth in national logos.

Dan Deitchman, owner of Brickbox Enterprises Ltd., said continued growth in the student population downtown will help. Fast-food chain Subway was attracted to one of his Market Street properties, where student housing for Harrisburg University of Science and Technology is expanding.

"More people means more things happening, which means people want to be there," he said. "The No. 1 thing the city can do is bring people back to live in the city. The big names will see that."

Vartan said he believes the population base is there now to attract big-box stores. He also believes the high concentration of people in the city during the work day is a factor that should not be overlooked.

Continuing to build the social scene also is key, said Alex Hartzler and David Butcher at WCI Partners LP. Hartzler was the first president of Harrisburg Young Professionals, a civic-minded organization he co-founded in 1998.

The city-focused organization, which continues to experience its own growth, has supported many developing businesses in Harrisburg. That support has helped foster other dining and entertainment ideas.

Harristown Enterprises Inc., the owner of Strawberry Square, a major mixed-use development in the downtown, said its sale of the Hilton Harrisburg last year will help it with future projects that involve education, medical and residential uses.

"We understand there is an order of priority of things," Brad Jones, Harristown's vice president, said of the court-approved recovery plan for the city.

Receiver William Lynch has said he expects economic development initiatives will be addressed once asset deals are finalized. Deals involving the city's troubled incinerator and parking system could be done this quarter, Lynch has said.

Jones also said bringing in more residents will help accelerate filling the gap on the business side.

"We're all in it together," Tunnell said of the city's core development group.

There are definitely defined territories, he said, but neighborhood connections are slowly being made, because the committed investors are communicating and planning for the future.

Hoping to do more to grow the city's economic base, Vartan is heading an economic development advisory council for Mayor Linda Thompson.

The private group is made up of business leaders in the city. Its task is to advise and assist the mayor with economic development policies and priorities.

Vartan said he hopes what he and other developers have done and are doing in the city will make it easier for everyday investors to buy and fix up property to sell or rent, which will help Harrisburg reach its potential.

"You have got to have a system in place, and policies and a plan in place, that unlocks the potential of that little guy to want to invest here and be successful at it," Vartan said.

Factors that affect development

The top three factors that drive development are almost always taxes, parking and crime.

Their rank depends on the investor.

Parking and taxes often are the top two, city developers said.

"You could have zero crime and the city would have to address the other issues," said H. Ralph Vartan, CEO of Vartan Group Inc.

The high costs associated with each — compared with a suburban location — can make it hard to justify a development project in the city financially.

That's where tax abatement and other incentives come into play, city developers said.

New construction is one deterrent to crime, because it brings with it other improvements, developers said, including streetlights and maybe security measures. Adding more people also can make an area safer.

"We hope to create synergy and attract others to do what we do," said Dan Deitchman, owner of Brickbox Enterprises Ltd.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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