Meeting Agenda State College Borough Redevelopment Authority October 25, 2017 Room 304 / 12 p.m

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1 Meeting Agenda State College Borough Redevelopment Authority Room 304 / 12 p.m I. II. III. IV. V. VI. Call to Order Roll Call Approval of Minutes Chair Report Public Hour - Hearing of Citizens Economic Development Program A. State College Town Centre VII. VIII. IX. Official Reports and Correspondence Upcoming Meetings Adjournment Documents: Complete RDA Agenda pdf

2 I. Call to Order Meeting Agenda State College Borough Redevelopment Authority Room 304 / 12 p.m. Page 1 of 7 II. Roll Call Sally Lenker, Chairman Donald Hahn, Vice-Chairman Rebecca Misangyi Colleen Ritter James Shincovich III. Approval of Minutes September 27, 2017 IV. Chair Report V. Public Hour - Hearing of Citizens VI. Economic Development Program A. State College Town Centre The Request-for-Proposals for the State College Town Centre (SCTC) were due on September 15. At the September 27, 2017 meeting, representatives from the Highland Holding Group, Inc., the one team responding to the RFP, presented their response. RDA members were provided with scoring evaluations based on previously approved evaluation criteria and asked to score the proposal against those criteria. Staff has briefly review the highlights of the Highland proposal, and reviewed the results of the evaluation. Staff and NDC will then lead a conversation with RDA members regarding the merits of the proposal and any suggestions, refinements or concerns about the proposal in support of moving towards the drafting of a Memorandum-of-Understanding for exclusive negotiation with Highland Holding Group, Inc. for development of the two public sites. Action Needed: Discuss the evaluation results and any suggestions/concerns regarding the proposal to be communicated back to the development team. Authorize staff and NDC to work with the development team and the Borough s Solicitor to draft a Memorandum-of-Understanding/Development Funding Agreement for review by the RDA at a future meeting.

3 Page 2 of 7 VII. Official Reports and Correspondence A. Borough Council B. Real Estate Advisory Committee C. Staff Reports VIII. Upcoming Meetings November 15, 2017 at 12:00 p.m. IX. Adjournment

4 Meeting Minutes State College Borough Redevelopment Authority September 27, 2017 The State College Borough Redevelopment Authority (RDA) met on Wednesday, September 27, 2017, in the Municipal Building, 243 South Allen Street. Chairman Lenker called the meeting to order at 12:00 p.m. Members Present Sally Lenker, Chairman; Donald Hahn, Vice-Chairman; Rebecca Misangyi, Colleen Ritter, and James Shincovich Others Present Ed LeClear, Planning Director; Anne Messner, Planner/Zoning Officer; Jenna Wargo, Planner; Maureen Safko, Senior Planner; Denise L. Rhoads, Administrative Assistant; Bud Sweet, NDC; Barry Gordon and Rick Pratt, OGP Architects, Alex Sahakian, Highlands Holding Group; Andy Haines, S & A Homes; and other interested parties Approval of Minutes A motion to approve the August 23 and September 11, 2017 minutes as submitted was made by Mr. Shincovich and seconded by Ms. Ritter. The vote was unanimously in favor. Chair Report Chairman Lenker had nothing to report. Public Hour No one was in the audience who wished to discuss items not on the agenda. Financial Issues August 2017 Expense Voucher Approvals Page 3 of 7 Mr. LeClear gave a brief overview of the August 2017 expense voucher which included the following categories: 1) prepaid items, 2) printer/copier supplies, 3) solid waste disposal, 4) electricity, 5) community grants/gifts, 6) natural gas, and 7) office/miscellaneous supplies. He noted the grand total of expenses for August 2017 was $35, A motion to approve the August 2017 expense voucher was made by Ms. Misangyi and seconded by Ms. Ritter. The vote was unanimously in favor.

5 Page 4 of 7 Community Development Program Yorkshire Village, LLC (LLC) Loan Request Mr. LeClear stated the RDA was asked to authorize the Solicitor and staff to negotiate terms of a loan in the amount of $250,000 to Yorkshire Village, LLC to maintain local ownership and affordable rents at a 41-unit apartment complex built 15 years ago on Southgate Drive. He noted the division of monies would be the LLC taking out a private loan of $350,000, the RDA loaning the LLC $125,000 and the Citizens Advisory Committee loaning out the remaining $125,000, from the First-time Homebuyer Middle Income Program, approved by Council. Mr. LeClear stated the loan would sustain affordable rents at the well-maintained facility instead of having to increase the rents by 43 to 55 percent. RDA s comments included: Mr. Shincovich stated he was in favor of the middle-income program, but not in favor of taking tax payer money and loaning to a for-profit business. He stated it would be better used elsewhere in the Borough. Mr. LeClear stated it was simply a matter of preventing an increase in rent for affordable housing. Mr. Haines stated this was a not-for-profit request just for keeping rents affordable through the Low-Income Tax Credit. Ms. Ritter asked what the percentage of the Area Median Income was. Mr. Haines stated they were all under 60 percent per Housing and Urban Development. Vice-Chairman Hahn asked what the demographics of the tenants were. Mr. Haines stated it was diverse: graduate student with families, single parent with children, and international students. A motion to recommend to staff and the Solicitor to approve the request was made by Ms. Ritter and seconded by Vice-Chairman Hahn. The vote was unanimously in favor. Economic Development Program State College Town Centre Mr. LeClear stated the Request-for-Proposals for the State College Town Centre were due on September 15, 2017 and only one development team responded, namely, the Highlands Holding Group, based in State College. Mr. Sahakian introduced the team representatives from Highlands Holding Group. He also noted all financial information would be evaluated by NDC. Introductions included: Developer - Highlands Holding Group Architects - OGP Architects, LLP: Barry Gordon and Rick Pratt General Contractor - Leonard S. Fiore, Inc. Civil Engineer PennTerra Engineering - John Sepp

6 Investor The Beauty Shoppe and Hall/Restaurant incubator- out of Pittsburgh, which ran a co-working space. Mr. Sahakian s presentation included: Page 5 of 7 Why was a Town Centre compelling? It would be a unique opportunity for State College for transformative development on Allen and Fraser Streets (approximately 2.5 acres) There was a need for an activated space where a mix of community focused uses intersected such as: Discovery Space (DS), modern offices (co-working and Class A spaces), restaurants with indoor-outdoor spaces, retail, and owner-occupied housing. Visitors could become engaged by the community. What could a Town Centre do? Activate the Civic District. Lower the barriers for startups boosting economic activity such as: a. Co-working provided furnished office space, flexible size and lease terms. b. Restaurant incubator could provide ready-built kitchens for aspiring restauranteurs. c. Market could provide scalable floor space in central high traffic locations. Create jobs, increase real estate taxes and increase earned income taxes (EIT). Mr. Sahakian noted there were five sites to be part of Town Centre: Post Office, First National Bank, Allen Street parking lot, the former Verizon building, and the current Verizon site. What was the development program? The preferred Scenario A would include the 2.5 acres with 430,000 square feet of development space including parking, a hotel, an indoor market, possible co-working spaces, a food hall, Class A offices, residential, retail and parking. Phase I would include three buildings and would start in Scenario B would include only two sites for feasibility purposes, 130,000 square feet of development space including parking, DS, co-working spaces, a food hall, Class A offices, and retail. Phase I would include two building and would start in late Was it feasible? The team met with the Post Office and were in discussions regarding where to move them. The team met with David Gray at Penn State University (PSU) and found out this proposal was very much in line with what they wanted to do. They had a Letter of Intent from The Beauty Shoppe for partnership. Since this group was already in the hotel business they had a hotel study done. The team would need to supply a financial analysis and data to NDC. They would also have to perform a site massing and constructability analysis.

7 Program details were: Upscale boutique with a possible national flag hotel, condominiums, offices, two story indoor market, co-working spaces (17,000 square feet), a food hall, DS and a parklet. There would be a connector between the offices and the food hall spaces, the hotel, etc. The team would like to tie into the Allen Street streetscape and would plan to go for an historic feel. How does it align with prior planning efforts? Address barriers for start-ups. Support entrepreneurship and wage sustaining jobs. Community preference for goals based on number of times ranked as #1 and #2. Utilize Sidney Friedman Park, Showed downtown as a place for everyone. Mr. Sahakian shared the potential partners the team had already had discussions with: Centre Region Entrepreneurial Network, Centre Foundation, DS, PSU College of Arts & Architects, Art Alliance, and local/regional farm-to-table restaurants. Proposed land conveyance and timeline included: Market based transaction between the Borough and the Highlands Holding Group was appraised for the Borough. Highlands Holding Group would purchase the property from Borough. Use restrictions could be placed on the deed. Precedent would be set by Fraser Centre. The value of 32 parking spaces to be provided must be deducted. RDA s comments included: Vice-Chairman Hahn stated the proposal was very informative. He asked if DS did not come through what would be an alternative. Mr. Sahakian stated offices could be placed there instead or it would not be built at all. Mr. LeClear stated the Borough could be in a position where they could lease the space if DS was not interested. Chairman Lenker complimented the team on all the work put forth with this proposal and stated she liked it. Mr. Shincovich and Ms. Misangyi were also very excited about this proposal. Vice-Chairman Hahn stated communication between the developer and the Borough was crucial. Ms. Misangyi suggested adding options for teenagers to do. Mr. Sahakian stated the enthusiasm for the proposal was very high. Page 6 of 7 Mr. Sweet asked what sensible modern apartments meant. Mr. Sahakian stated they would not be high priced. Mr. Sweet asked when the preliminary plans would be presented. Mr. Sahakian stated they were not quite there it.

8 Mr. Sweet asked if the costs for sub-surface parking had been factored in yet. Mr. Sahakian stated only a contingency was sent out to the contractor. Mr. LeClear stated borings had been done in the Allen Street lot. Mr. Sweet asked if it would be a challenge to fill 20,000 square feet of office space. Mr. Sahakian stated it could be done and they could be flexible as to what would go in there. Mr. LeClear asked for written evaluations to be sent to staff by October 20, 2017 by ing Jenna Wargo at jwargo@statecollegepa.us. He noted staff would compile the information and provide a summary evaluation at the October RDA meeting. Upcoming Meetings at 12:00 p.m. Adjournment Page 7 of 7 With no further business to discuss, Chairman Lenker adjourned the meeting at 1:55 p.m. Respectfully submitted, Denise L. Rhoads, Administrative Assistant