Harrisburg-area projects started with a splash, floundered

For every project that has been built in the Capitol city
over the past few years, there has been one or two highly anticipated projects
that never came to fruition.

For every project that has been built in the Capitol city
over the past few years, there has been one or two highly anticipated projects
that never came to fruition.

The city’s most notorious non-project of late is the failed Capitol View Commerce
Center at Cameron and
Herr streets. The approximately $28 million 215,000-square-foot office, retail
and print facility broke down mid-build last spring after the developer stopped
paying contractors on the project.

The project has sat idle ever since, tied up in legal
wrangling. City, county, state and federal tax dollars are tied up in Capitol
View, as the developer was promised approximately $17 million to build in the
brownfield property.

The tract sat vacant since Hurricane Agnes ravaged the
flood-zone property in 1972. The project was supposed to be an example of how
public and private money could work together to spur economic development and
create jobs on an otherwise useless site. Now, the unfinished building adds to
the property’s unkempt look.

There are other projects that never got off the ground.

There is the constantly delayed National Sports Hall of Fame slated for City Island that never had support from City
Council and cannot get enough private investment.

There is the Starwood aloft hotel, which was expected to
have been built by now at North Second and State streets. The building’s
footprint has been cleared, but nothing else has happened. The aloft project
was delayed by soaring material prices and other market factors.

An 18-story office building between 200-212 N. Second St. saw its
start date set back because the economy has kept potential tenants at bay, a
development partner involved with the project said.

The Business Journal checked in with developers and
community leaders to find out what happened to some of the city’s most
promising projects that Mayor Stephen R. Reed and other officials announced,
but never were built.

The following list doesn’t cover all the failed or delayed
projects; it does point out a few of the biggest projects that would have
helped the city’s economy but somehow seemed to slip quietly through the
cracks. Here is what happened.

210 North Second Street

In July 2007, four ambitious partners announced they would
break ground in early 2008 on an 18-story, $35 million office, parking and
retail building between 200-212 N. Second
St. in downtown Harrisburg.

Sawyer’s Cantina, Cobalt Salon and an empty storefront in a
small historic building exist in the building’s footprint. The businesses will
have to be moved when the project moves forward. The River Street Parking
garage sits just behind the property where the building would be constructed.

The project’s developers call themselves 210 N. Second Street
. The associates are Central Pennsylvania
commercial real estate agent Greg Rothman, lawyer Andrew Giorgione and
businessman Rick Galiardo.

The project has not been cancelled, but 210 N. Second Street
Associates doesn’t expect to break ground for quite some time. Giorgione would
not give an approximate date for the groundbreaking.

The economy set the project back, and construction will not
start until the group finds at least several major tenants to take between
30,000 to 50,000 square feet each, Giorgione said. The group will have the
structure’s final design completed after it gets 50 percent of the building
leased. No tenants have signed to date.

“As for timing, it all depends on tenants. If we meet our 50
percent goal, we believe we can achieve hard design in six months and build the
building in 18 months, meaning the turnaround would be two years,” Giorgione
wrote in an e-mail.

He said the developers are talking with several possible
tenants interested in leasing significant space.

The economy might have set back the start date, but the
building’s dimensions have not been changed, Giorgione said.  Plans still call for a 210,500-square-foot
steel building. It will include 140,000 square feet of office space, 60,000
square feet for parking, and there will be retail businesses on the first floor
and a rooftop bar.

The developers have all the city approvals and other permits
they need to move forward, Giorgione said.

National Sports Hall of Fame

The National Sports Hall of Fame planned for City Island
has not been able to move past the planning stages for about 17 years.

The approximately $31 million project is a vision of the
mayor’s that just cannot generate enough private investment to turn into

When the hall of fame was announced, it was going to be a
Pennsylvania Hall of Fame museum, but its scope was expanded to include sports
of all types around the U.S.
to generate more interest.

State officials were on board with the project. Former Gov.
Tom Ridge approved a $9.5 million grant for the hall in 2001, said John
Levenda, president of the Sports Hall of Fame Foundation, which was set up to
plan and operate the museum, in an earlier interview. But that leaves $21.5
million in private funding that the foundation has not been able to cover.

Levenda and Reed insist the project is going to happen, even
as City Council tried to block the foundation from landing a liquor license for
the building.

The hall of fame plans call for a 60,000-square-foot museum,
restaurant and bar on the first three floors. The top three floors would be
leased as offices. The building would have to be built on stilts to keep the
building from flooding when the Susquehanna River crests the island’s

Starwood aloft

After a series of delays, the corner of North Second and
State streets was cleared in 2007 to make room for a 138-room Starwood aloft
high-rise hotel. Nothing has happened there since.

When the original developer, J. Alex Hartzler, and Reed
announced the project in September 2006, the hotel was supposed to open by
spring 2008.

A lot has changed since that announcement. The hotel is
scheduled to be built, but Hartzler is no longer managing the project. He still
is an investor, and Harrisburg-based Hersha Hospitality Trust, which owns
hotels up and down the East Coast, took control of the project. Hersha
Hospitality Management
, an affiliate of the trust, would run the hotel.

Construction was delayed by the economy, Mayur Patel,
general counsel to Hersha, said in December. Patel did not return calls for
this story, but last month, he said that even though there has been no sign of
progress at the corner, the company expects to break ground on the hotel this
year. It will take between 12 to 14 months to construct the building.

Tracy Manor

York’s Susquehanna Real Estate still plans to transform the
historic Tracy Mansion
along Harrisburg’s
picturesque Front Street
into offices and a restaurant. The development group still also plans to build
a seven-story high-end condominium building next to the mansion to complete the
more than $22 million project called Tracy Manor.

Soaring material prices initially delayed the project. Then
the crippled economy kept some potential tenants from leasing office space and
buying condos, said Jack Kay, Susquehanna
president and chief executive officer. When Tracy Manor was announced in spring
2007, ground was supposed to have been broken by the fall of the same year and
completed late last year.

Construction has yet to begin, but material prices have
lowered, and that helped keep the project viable, Kay said. Susquehanna renovated the mansion’s carriage house and
turned it into a marketing center and open-house facility. The company has to
lease or sell a significant amount of space before construction can start, Kay said.

Kay is confident the project will move forward, and the
scope of Tracy Manor is the same, he said. A number of people who have reserved
condominiums don’t need financing, he said. Those who do should be able to get
financing as the federal government puts pressure on banks to make loans after
the government bailed out the banks.

The project will include the construction of 92,000 square
feet of space and the restoration of 15,000 square feet.  The complex will include limited on-site
parking, and landscaping will be designed to maintain open views of the river.

More projects that got away – or seriously delayed

Barto Building hotel: Jules Patt, a Hollidaysburg, Blair
County, developer announced in January 2007 that his company would spend $14
million to renovate the historic Barto Building at North Third and State
streets into a high-end hotel. No movement ever took place.

Market Street Lofts: Two local young investors said in early
2007 that they would spend about $1 million to renovate an 8,410-square-foot
vacant, blighted warehouse at 1000
Market St. to turn it into eight studio-style
lofts. The developers were promised a $1.3 million loan from the Pennsylvania
Housing Finance Agency for the project, but no progress was ever made.

West Museum:
Harrisburg Mayor Stephen R. Reed spent millions to amass artifacts from the old
west, and the relics sat in storage for years. The city has auctioned off many
of the relics and is trying to recoup the money since the planned museum never
got off the ground

Federal courthouse: The search for an appropriate spot to
place a new $100-plus million federal courthouse in Harrisburg has turned into a saga that has
lasted four years. Reed wants the courthouse to go up in a parking lot at Sixth
and Reily streets to help bolster economic development. The U.S. General
Services Administration (GSA) wants to build the courthouse downtown.


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