Facebook LinkedIn Twitter Vimeo RSS

Citing high costs and declining enrollment, HACC to leave facility in Midtown Harrisburg

By ,
HACC plans over the next four years to relocate its trade and technology programs out of its Midtown 2 building in Midtown Harrisburg. HACC leases the building at Third and Reily streets from Greenworks Development.
HACC plans over the next four years to relocate its trade and technology programs out of its Midtown 2 building in Midtown Harrisburg. HACC leases the building at Third and Reily streets from Greenworks Development. - (Photo / )

As real estate expenses soar and enrollment declines, HACC has decided to vacate one of its buildings in Midtown Harrisburg.

HACC said late Friday it plans to move its trade and technology programs over the next four years from its so-called Midtown 2 facility at Third and Reily streets to other buildings on its Harrisburg campus or other HACC campuses in Central Pennsylvania.

The programs, which use about 48,000 square feet of space, have less than a 20 percent classroom utilization or occupancy rate, making it an expensive facility to maintain.

The move is expected to save HACC about $1.9 million per year in rent, maintenance and utility costs.

"After a detailed financial analysis, it was determined that it does not make good business sense to continue to lease or purchase Midtown 2, which is the only leased space at the campus," HACC President John "Ski" Sygielski said in a statement.

The relocation, HACC officials added in a statement, is tied to the end of a 15-year lease that expires June 30, 2022. 

HACC signed the lease for Midtown 2 with Harrisburg-based GreenWorks Development in 2007. 

Three years later, by fall 2010, HACC saw enrollment at its Harrisburg campus — which includes Midtown 2 — grow to a peak of 10,747 students. Enrollment has since been on the decline.

HACC does not track student enrollment by building. However, it does track credit hours. Officials said usage at Midtown 2 peaked in fiscal year 2011-12 at 12,254 credit hours. For the 2016-17 fiscal year, credit hours at Midtown 2 declined to 8,323.

Credit hours are usually based on the number of classroom hours per week throughout a term or semester. Students receive three credit hours for most classes.

Sygielski said no programs are being cut as part of the relocation. The transition out of Midtown 2 will occur at times that have the least impact on classes, he added. The move is expected to begin in the summer of 2019 and be completed in phases by 2022.

"Furthermore, HACC remains strongly committed to the Midtown area with the college's robust workforce development and continuing education and credit welding programs at Midtown 1 at Fourth and Reily streets," he said.

HACC owns the nearby Midtown 1 facility and its adjacent parking lots. HACC said a portion of the Midtown 2 savings initially will be used to renovate spaces for the relocated programs.

"By moving out of Midtown 2, the college will eliminate leased space and free up cash flow to invest in maintaining the other facilities at the Harrisburg campus," Sygielski said.

Doug Neidich, CEO of GreenWorks Development, said he had been in conversations with HACC and was not surprised by the planned move. He believes the facility will be reused for educational purposes and this gives him four years to attract a new institution. The facility was once the Evangelical Press Building.

"It's a strong location and the building is fit out for educational uses," he said. 

The building also could work for other institutional or office uses, said Brad Jones, president and CEO of Harristown Enterprises. HBG Realty LLC, a Harristown affiliate, manages the property for Neidich.

Jones said he could also see some type of mixed-use opportunity at Midtown 2. The neighborhood - which is home to the Broad Street Market, the Susquehanna Art Museum and a collection of shops and restaurants - will soon be home to a new federal courthouse and state archives.

"In some ways, the fact that HACC had made this announcement now is helpful," Jones said. "It's possible that someone could come in and negotiate an early termination and buy out the lease."

HACC serves about 19,000 students at its Gettysburg, Harrisburg, Lancaster, Lebanon and York campuses.

More From This Industry

Jason Scott

Jason Scott

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

Leave a Comment

test

Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy

Comments

Dorrah November 20, 2018 2:22 am

From this post, i came to know that HACC has decided to vacate one of its buildings in Midtown Harrisburg. We know that nowadays the real estate expenses soar and enrollment declines. I think the HACC has taken a good decision on that. Keep share more updates here.fargo dtc 4500e

MelBrandle November 12, 2018 11:08 pm

Expansion is always a scary thing to do - especially when you're not so sure if your business can afford all that extra space at the moment! I have always been blessed with good business at my facility for storage in Adelaide and expanding my capacity has always been on my mind. But if I don't have enough demand to do so, likely we'll end up in the same situation as HACC has with this facility they're vacating now!

peter November 12, 2018 9:07 pm

the nice game

KevinCandelaria October 10, 2018 12:45 pm

The building looks very luxurious. As per the custom writing uk service, the decision was really good. It is good to vacate house to save the money.

close