Harristown hopes to start its largest housing projectCitywide housing study begins in Harrisburg
One of downtown Harrisburg's most active developers is eyeing a 2019 start for its largest apartment project yet.
Harrisburg-based Harristown Enterprises, owner of the mixed-use Strawberry Square complex, is in the process of buying two large office buildings in the capital city, at 116 and 124 Pine St. Harristown wants to convert both to apartment buildings with first-floor retail space.
The plan calls for spending $12 million and creating 68 apartments, which will more than double Harristown’s rental portfolio downtown.
Brad Jones, the company’s president and CEO, said demand remains high for downtown apartments. But supply has been an issue, with development centering mostly on office and retail projects around the state Capitol.
Over the last three years, Harristown and other city investors have been adding housing by renovating older, empty office buildings.
Known for retail and office development, Harristown first got into apartments in 2015 and has built 60 apartments to date. All of those units are occupied and rent from $775 to $1,450 per month. Harristown is currently renovating a building at North Second and Cranberry streets, dubbed The Bogg on Cranberry, which will add another 12 apartments this fall.
“There is still a lot to do here,” said Jones, who expects even more demand for housing as two major construction projects get underway in the city.
Site work for a new federal courthouse at Sixth and Reily streets in Midtown Harrisburg is underway, while a proposed mixed-use tower for Harrisburg University of Science and Technology is in the works for next year.
The development comes even as city leaders wrestle with the Pennsylvania Legislature over Harrisburg’s potential exit from Act 47, a state program that allows financially distressed municipalities to levy higher taxes.
Jones said he has a goal of getting Harristown to 200 apartments over the next three years, a goal that he believes is attainable. He also recognizes that Harristown has a role to play in building more affordable apartments. Some city officials have been critical of the more upscale units going into downtown so far.
City Council President Wanda Williams has raised concerns at council meetings this year that city residents who want to live downtown may be unable to afford the higher rents.
Harristown’s Pine Street apartments are projected to cost between $995 and $1,450 per month.
Despite the higher prices, developers have had little trouble renting their apartments.
That said, Harristown is interested in building up the residential population downtown to boost foot traffic for retail shops and restaurants, which could entice other businesses to open.
The goal, according to officials, is to take a more comprehensive look at the current housing stock in Harrisburg, including the number and price of rental units and housing trends compared with the surrounding area, and then project future housing needs. The data could help city officials craft new policies to ensure more affordable apartments are set aside in future developments.
“I think it will be a solid piece of research to give us a fuller understanding of the housing market in the city,” Jones said.
Bryan Davis, executive director of the redevelopment authority, said he believes the study will guide future development, especially in areas of the city that are likely to attract mixed-use development projects, such as along the Market Street corridor surrounding the Harrisburg Transportation Center.
Development around the train station hinges on restoration of the nearby Paxton Creek and addressing flooding concerns around Market and Cameron streets.
Jones said Harristown intends to stay focused on building more apartments downtown over the next three to five years, which could include projects near the train station. He believes other developers are keen on undertaking projects around Harrisburg University, which has been steadily adding students since its founding more than a decade ago.
“There are still a lot of tired old office buildings that could be used for housing,” Jones said.
Dave Black, president and CEO of the Harrisburg Regional Chamber and Capital Region Economic Development Corp., said the push for downtown housing sets a good path for the city.
As apartments open downtown, Black believes they could have a broader impact on Harrisburg’s finances.
“While these are not affordable housing units, the contributions of the people living downtown and paying earned income and the local services tax will contribute to future success of the city,” he said.
The Pine Street projects, meanwhile, help Harristown extend its footprint north toward State Street. It has done most of its work to the south end of the downtown, around Market and Third streets.
And as more apartments open, other outside investors could follow, Black said.
“I think you will see interest from outsiders on a larger scale,” he said. “Or more locals who have done mostly suburban development will come into the city.”
Plans for the Harrisburg University tower, which is slated for a 2021 opening at Chestnut and South Third streets, may provide the biggest boost in attracting more real estate investors, Black said.
Jones agrees and believes commercial investments will follow. In fact, Harristown recently demolished the long-vacant Coronet restaurant building at 21 S. Second St., which is next to the Crowne Plaza hotel, to make room for a six-story commercial building that will cater to professional office users and first-floor retail.
“We are not developing apartments in a vacuum,” he said. “We will need more office as well.”