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Tax abatement could turn slow trickle of residential projects in Harrisburg into steady flow

Drip, drip, drip. That’s the sound of residential development in Harrisburg in the absence of efforts to level the early playing field on property taxes. Harrisburg’s core real estate investors have been very selective during the last five years about which properties they buy and how much money they need to invest to realize a return.

That’s the sound of residential development in Harrisburg in the absence of efforts to level the early playing field on property taxes. Harrisburg’s core real estate investors have been very selective during the last five years about which properties they buy and how much money they need to invest to realize a return.

Most have managed to buy low on vacant and older office buildings in the downtown, then renovate those spaces into residential rental units to meet market demand among young professionals and others seeking an urban lifestyle.

RELATED: Apartment conversions continue in downtown Harrisburg

“We’re providing a new product in an older building. We’re serving a market that has been underserved with a more upscale product,” said J. Alex Hartzler, managing partner and founder of WCI Partners LP.

WCI, which has about 100 multifamily units in its city portfolio, has seen strong rental demand in the Olde Uptown neighborhood in Midtown Harrisburg. That has encouraged the company to invest more in downtown recently, with residential projects on State, Locust and Walnut streets.

The city developer also has a proposed 33-unit apartment project at the former Ronald Brown charter school on North Third Street in Midtown.

Like its peers, WCI is “comfortable” adding a project or two and a few dozen market-rate rental units each year. That’s not much in the near term, but it becomes substantial over the long run, Hartzler said.

“The city needs density in order to be thriving,” he added. “Having residents live downtown and walking to things is critical.”

RELATED: WCI Partners seeks variance for latest project in Midtown Harrisburg

Turning the spigot on high

Array

Passing a new 10-year tax abatement ordinance — which is in the works — likely would turn a slow drip of redevelopment into a free-flowing spigot of projects, including deals involving outside parties who have wanted to invest in the capital city, said Brad Jones, president and CEO of Harristown Enterprises Inc.

Harristown, which owns the mixed-use Strawberry Square complex downtown, is among that core group of long-term investors in the city. It, too, has a residential conversion project in the works that would turn more than 25,000 square feet of office space along North Third and Market streets into 22 apartments.

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