Dauphin County wrapping up deal for former Harrisburg State Hospital

Dauphin County officials tried to lure Amazon to Harrisburg in 2017, hoping to hit a homerun with redevelopment of the former Harrisburg State Hospital campus near Interstate 81.

Amazon passed on the midstate for its second headquarters, but county Commissioner Jeff Haste said the county is still poised to hit some singles, doubles and triples on that nearly 300-acre state site in the next few years, and score long-term tax revenue from new commercial uses.

In the next few weeks, Haste said the county Redevelopment Authority is expected to wrap up an agreement with the commonwealth that will give the authority control of marketing the site to developers for future building projects.

Most importantly, he said, the transfer is one step closer to getting the long held state property on the tax rolls for Harrisburg and Susquehanna Township.

“This is part of the reason we went both feet in on Amazon,” Haste said. “We were trying to hit a homerun, but knew the word would be out there. We were trying to plant the seed then.”

Indeed, commercial interest is mounting, according to Haste.

“I think we could see activity in the next couple months,” he said, citing inquiries from hospitality firms, educational entities and service organizations looking for real estate.

Developers are likely to show interest in portions of the property that are closest to the Pennsylvania Farm Show, along Cameron Street and Elmerton Avenue. Hotels, shops and a commercial office park are all possibilities for the property.

The hospital portion shut down in 2006 but state workers continued to toil inside many of the 45 buildings scattered on the property. Over the last few years, workers have been moving to newer offices, leaving behind buildings in varying states of disrepair.

The campus could be entirely devoid of state workers by 2020, according to the state Department of General Services, which handles state real estate.

State lawmakers approved a resolution in June 2017 to sell the property, which is known as the DGS Annex, as part of a push to sell surplus properties and reduce annual costs for maintenance and security. State officials have said it cost about $5 million per year to maintain the hospital site.

The transfer to the authority has been in the works since that 2017 approval.

Haste said the agreement is a no money down deal for the county. He said any proceeds from property sales, which will follow a state-supported process to subdivide the site and separate the utilities, would be split between the county and state.

“I think we will see revenue sooner,” he said of the approach. “It’s quite possible we’ll see more money from each parcel.”

Haste said there was a fear that putting the entire site out for bid to developers to buy might have led to a local zoning fight over redevelopment plans. The state believes the county authority is better equipped to work with the township and city to guide the process and find development projects that align with community needs.

“We’re hoping that this goes a lot smoother,” Haste said.

Harrisburg was the first state hospital in Pennsylvania when it opened in 1851.