In February, Harristown is planning to begin interior demolition work at 116 and 124 Pine St. as part of an office-to-apartment conversion project that should take about a year to complete.
Harristown, which has been building up its rental portfolio downtown over the past few years, plans to spend $12 million to build 74 apartments in the two connected buildings. The 80,000-square-foot project also will include some first-floor retail space.
The Pine Street project will be Harristown’s largest non-commercial project. It also is believed to be the largest apartment conversion project in the city since the Old City Hall apartments opened in the 1980s, Jones said.
“This is probably the biggest construction project we’ve done since the Hilton,” Jones said, referring to the Hilton Harrisburg, which opened nearly 30 years ago.
The conversion plan calls for 50 one-bedroom apartments and 24 two-bedroom units, with monthly rents ranging from $1,150 to $1,450.
The Pine Street work begins as several other large construction projects are starting in the capital city.
The most notable are the new federal courthouse at Sixth and Reily streets in Midtown Harrisburg and the new high-rise that is being developed downtown by Harrisburg University of Science and Technology. Both projects will exceed $100 million.
Several large construction projects also are expected to wrap up this year, including the Salvation Army’s $12 million regional headquarters on South 29th Street and the $8.6 million Paxton Place, a senior-living apartment project at 1100 S. 20th St.
“There has been a surge in construction for the city,” said Jones, who hopes current projects will drive additional investment in Harrisburg.
Harristown, which has led downtown projects costing more than $60 million over the last four years, is projecting it will spend about $23 million on real estate investments this year and next year.
Harristown has several construction projects in the works this year, including more housing downtown, as demand for rental properties remains high.
The company opened a 12-unit apartment project at North Second and Cranberry streets in the fall, and all of the units are occupied. In fact, Jones said all of the company’s 72 apartments in downtown Harrisburg are currently leased.
“We haven’t had a unit available for lease for months,” Jones said.
The Pine Street project should help increase the supply, he said, but pre-leasing isn’t expected to begin until November. Jones said he hopes to complete construction on Pine Street by February 2020.
Meanwhile, Harristown has begun interior demolition work on its redevelopment of the historic Fox Hotel building at 236 S. Second St. That project will create eight more apartments downtown.
Harristown is interviewing contractors and preparing to begin construction work this year.
Harristown also is wrapping up fit-out work on an 11,000-square-foot office space on the sixth floor of the Bowman Tower in Strawberry Square.
That $1 million project, which should wrap up in February, is being done to move law firm SkarlatosZonarich into the square. Harristown had been considering the space in Bowman for apartments.
As part of the law firm’s move, which will double the firm’s downtown office space, Harristown last year purchased the firm’s current building, at 17 S. Market Square. Harristown owns the neighboring property at 21 S. Second St., where it already demolished a building to erect a new six-story tower.
The Harristown plan has been to renovate the existing SkarlatosZonarich building and connect it to the new building. The combined facility — which would include room for office, retail and possibly apartments — is expected have about 50,000 square feet of space.
“We still believe this will be a commercial office tower with first-floor restaurant and retail at this point,” Jones said. “Obviously, this could change but that is our feeling at this time.”
Last year, the state approved a $1 million grant under the state’s Redevelopment Assistance Capital Program, or RACP, for the new building.
Jones said the total project will likely cost about $10 million, including $4 million for the new building. He is hoping that construction will begin sometime this year, though that will depend on securing a lead commercial tenant.
Silver Spring Township-based Mowery is overseeing construction for both the Pine Street apartment conversion and the law firm fit-out.
Investing with Harristown on the Pine Street project are Lower Allen Township-based Select Capital Commercial Properties and Don Mowery, the former owner of construction firm Mowery.
Camp Hill-based By Design Consultants Inc. is involved in the design of the Pine Street apartments. By Design and New Cumberland-based Diversified Design were tapped to design the SkarlatosZonarich space.