Harrisburg gears up for major projects
The skyline of the state capital could soon become more crowded: Construction on not one but two new large buildings is slated to begin in early 2019.
The U.S. General Services Administration expects construction will start in January on a nearly $200 million federal courthouse complex at Sixth and Reily streets in Midtown Harrisburg.
Harrisburg University of Science and Technology is hoping to start a month or two later on construction of what could end up being the tallest tower in the city. The proposed university building, at Chestnut and S. Third streets in downtown Harrisburg, could cost as much as $150 million. It is designed to support growing enrollment at the school and to house new educational programs in health sciences.
“The next two to five years could bring exciting growth and economic development,” said Brad Jones, CEO of Harrisburg-based Harristown Enterprises, which owns the mixed-use Strawberry Square complex in downtown Harrisburg.
Projects that exceed $100 million are few and far between in Central Pennsylvania. To have two starting at the same time means a lot of consultants and contractors could be in town spending money during the construction period, which will take two to three years, Jones said. And during that time, he believes demand will pick up for housing and retail.
Since 2015, Harristown has built 60 apartments downtown and has plans that could soon take the number to about 100 units.
He also believes the HU and courthouse projects will give other investors the confidence to buy properties in Harrisburg for additional housing.
Many of the current units are being filled by people working in health care and technology, he said, citing the growth at UPMC Pinnacle and Harrisburg University.
H. Ralph Vartan, CEO of Susquehanna Township-based Vartan Group Inc., called the $350 million in investments a “big deal” and “transformational” for Harrisburg.
He and Jones said the two big construction projects are starting at an ideal time. Other building and infrastructure initiatives also are underway in Harrisburg, which a few years ago was floundering under a mountain of incinerator debt.
Among the improvements is a planned $15 million makeover of the Harrisburg Transportation Center on Market Street. There also are efforts underway to address flooding concerns along nearby Paxton Creek. Creek improvements could lead to more mixed-use development around the train station.
Other efforts are looking to turn Market Square at Second and Market streets into a more pedestrian-friendly public plaza. New affordable housing and retail construction is taking place in a section of South Allison Hill that is connected to downtown by the Mulberry Street Bridge.
There also are planned projects to redesign Second Street as a two-way street north of Forster Street, and additional traffic improvements that may include roundabouts along Seventh Street.
Better traffic connections and greater walkability between downtown and Midtown could entice more people to live and do business in the city, advocates like Vartan and Jones said. But developers also recognize that cities like Harrisburg tend to be more expensive than suburban locations when it comes to property taxes, parking fees and utility costs.
Despite the higher costs, many people are drawn to city living because of a vibrant social scene, as well as cultural attractions within walking distance.
Businesses are often drawn to Harrisburg because it’s the state capital. Indeed, for financial services firms and state contractors, a downtown location is almost essential. Restaurants and retail shops pop up to support that captive workday audience.
For Midtown Harrisburg, the start of courthouse construction would be a major milestone. The project has been cited for more than a decade as a potential catalyst for new building activity in the area around it. Also in the works is the new Pennsylvania State Archives on Sixth Street.
“Time will tell whether or not a courthouse several blocks away generates foot traffic outside of the courthouse itself,” said developer Josh Kesler, who owns the Millworks, a farm-to-table restaurant a few blocks from the courthouse site.
Still, he hopes the project will lead to more development along Third Street near the Broad Street Market, which is at North Third and Verbeke streets.
In addition to new business opportunities, Kesler said he believes there will be increased demand for housing in Midtown.
Developers and city leaders have long viewed the Seventh Street corridor between Reily and Maclay streets, which was widened to four lanes five years ago, as the next key area for development in Harrisburg.
There is plenty of room in Midtown for development. Vartan owns about 11 of the 25 prime acres around the courthouse site, including hundreds of parcels between Sixth and Seventh streets and Reily and Maclay streets. His late father, John Vartan, began buying properties in that area back in the 1980s.
Ralph Vartan also built the mixed-use 1500 Condominium across the street from the courthouse property and Vartan Group developed the site for the archives building.
On the flip side, what becomes of the existing courthouse in downtown Harrisburg is still very much a mystery. Jones said he hopes to see it repopulated with other federal agencies.
“It could be a significant work to redevelop it for more professional offices,” he said.
That said, Harristown has been able to attract professional service firms like RGS Associates as tenants over the last three years. Harristown also brought in hundreds of workers from the state Department of Human Services. They moved into the Commonwealth Tower downtown after leaving the former Harrisburg State Hospital grounds near the Pennsylvania Farm Show Complex and Expo Center.
Jones believes the downtown could be a good fit for remaining state employees at the old hospital site, known as the DGS Annex.
Nick Smith, a GSA spokesman, said the agency is evaluating the future use of the existing federal building in Harrisburg. The goal is to save taxpayer money through better management of federal real estate, Smith said, a sign the old courthouse could eventually be sold.
HU tower timeline
June 2018: Harrisburg University of Science and Technology’s board of trustees is expected to approve the final team for development of a new mixed-use high-rise in downtown Harrisburg. HU owns property at the corner of Chestnut and South Third streets, where it plans to build the new tower. The site, which is near UPMC Pinnacle’s Harrisburg Hospital, is currently a parking lot.
July 2018: University President Eric Darr expects the project will enter the design process.
February/March 2019: Construction could begin on the new tower. The building could be as tall as 36 stories. Construction is expected to wrap up in 2021.
Cost: $130 million to $150 million. The price tag will be determined this summer as part of negotiations on building size and uses.
Scope: The tower is designed to give HU a state-of-the-art health science education center, where the university can begin to offer degree programs in nursing, pharmaceutical sciences and other allied health programs to help regional health care providers find employees they will need as they continue to grow.
HU’s goal is to have about 200,000 square feet for the new education center. The university also wants more student housing, a public parking garage and other amenities that could benefit the broader community.
The university’s early wish list included a boutique hotel, restaurant and conference center. Interested developers also were free to include other uses they would like to see attached to the university, such as residential condominiums or apartments and retail.
History: HU issued a request for proposals for the tower in November. Eight development teams responded to the RFP, as of February. Officials have since narrowed that list down to two teams.
March 2018: Congress passed a federal budget bill that included $137.2 million in funding for the new Harrisburg courthouse at Sixth and Reily streets, the last piece of funding needed to start construction.
December 2018: The U.S. General Services Administration expects to have a final design in place for the 243,000-square-foot courthouse complex.
January 2019: Construction is slated to start. The new courthouse is expected to be finished in 2022. Pittsburgh-based Mascaro Construction has been selected as construction manager.
Cost: $192.8 million, which includes about $26 million that Congress allocated in 2004 for site acquisition and design of a new courthouse in Harrisburg. GSA received an additional $29.5 million in 2016 for “continued feasibility studies and preparation work.”
Scope: The new Midtown facility will replace the current courthouse at Third and Walnut streets in downtown Harrisburg. The new courthouse will contain eight courtrooms and 11 chambers. Tenants will be the Pennsylvania 3rd Circuit U.S. Courts, U.S. Courts, U.S. Marshal Service, U.S. Attorneys and U.S. Trustees.
History: The Sixth and Reily site was officially chosen for the project in 2010. But federal funding delays and other courthouse needs nationally have put Harrisburg on the back burner.