By Suzan Erem
When Holmes-Foster residents turned out this August for a State College Borough Council meeting to say their piece at the late-night work session that followed, the script was straight out of any local development debate: Increased and misdirected traffic will cause problems; higher density means higher crime and higher cost of public services; if only the borough would invest in good sidewalks and decent street lamps, responsible development would follow.
What was unusual was the sheer endurance of those residents and others who spoke that night. They have been attending meetings, contributing to reports, talking with their neighbors and advocating their vision of this area just west of Atherton Street for almost 20 years.
This latest upsurge in community involvement was caused by the suspicion among homeowners that they’d been the victims of yet another bait-and-switch, the latest chapter of which began three years ago when the borough hired Delta Development and its subcontractor EDSA. After paying more than $308,000 in public funds for a report the community appeared to agree upon in 2007, why was council now considering a plan that had changed so radically? Where did some notion of high-rise student housing come from, for example, and why was it landing in their back yards?
The long road to the same place
Almost 18 years have passed since borough leaders have attempted to develop the West End, at the time termed the “Urban Village.” Consultants, residents and elected leaders had converged in the late 1980s too, and in 1991, with new zoning in place, residents’ desire to maintain low-density housing won out…for the moment.
“There was a lot of talk then, pie in the sky, that everything would be perfect,” said longtime resident Eric Boeldt recalling the debate then. “I know they talked about it endlessly. They tried to zone it so you couldn’t put in huge places and bars, but when you get right down to it, the most profitable use for it is student housing.”
Over the next decade and a half, more students seeking low rent increasingly jammed into grand old homes landlords partitioned into high-density apartments. Landlords could make good money by packing in as many renters as possible, with limited maintenance. As the neighborhood went downhill, residents and leaders realized that whatever fix had been set in motion 15 years earlier wasn’t gaining any traction. The area between Atherton and the Ferguson Township line, from West Campus Drive to Beaver Avenue was deteriorating in front of their eyes.
Some property owners in the area point to the borough council at the time.
Gemini Enterprises owner John Simbeck, who has been involved since the beginning, told Voices that after the borough refused to allow Accuweather the zoning variances it said it needed to build a new facility at its property at 129 N. Sparks St., founder Joel Myers moved his operation and its hundreds of jobs over to Ferguson Township to the current location on Science Park Road. According to county tax records, the J and M Myers Family Partnership still owns the 1.09-acre lot and other property in the neighborhood.
Photo by Dave Warnock
John Simbeck, owner of Gemini Enterprises in State College’s West End, is a vocal opponent of harsh zoning regulations and a major proponent of beautification projects he says will attract development.
Other smaller operations also moved or closed up for good. The most recent blow to the area was the sudden closing of O.W. Houts, one of the last general stores of its kind in the region, and possibly the country.
“Once all the businesses are gone what are you going to replace it with?” Simbeck asked. “Student housing.”
He was right. What thrived during that time was low-rent, high-density student housing, including a corporation founded by Shiou-Chuan Sun and his wife E. Tu-zen more than three decades ago. The S.C. Sun Corporation and the Sun family own at least 18 properties in the area, according to tax records, almost twice as many properties as the next most common name on the rolls, Accuweather’s Myers and related businesses.
“I think that the students need housing,” said Tu-zen Sun, who said she spoke with Voices as a resident and not as a representative of Sun Corporation. “One of the ideas floating around for years—I think it’s ridiculous—is to get people with families, with children, to live on that end. I don’t think it’s a practical idea.”
The widow Sun, now 88, referred Voices to her property manager, Ginny Chuba, who owns three properties in the West End as well, but Chuba did not respond to repeated requests for an interview.
So businesses move out and students move in to continually deteriorating houses. Empty lots, empty storefronts and dark streets at night make it harder and harder for homeowners to stay committed to the place or for property owners to keep houses as single-family dwellings, even if they want to. The market and the zoning make it much more lucrative to renovate for multi-family or student housing. Some are happy about that, others are angry, and others are simply resigned.
As one longtime resident said, “The citizens get worn out, but the people who stand to gain from developing, it pays for them not to get worn out; they can hire lawyers.”
Between a rock and Borough Council
“It’s just that they have an interest in financial gain, and we have an interest in community, period,” said resident Kim Faulds to a weary-looking council at the August work session.
“This is the dilemma,” agreed Planning Commission member Elizabeth Toepfer in an interview later. “It’s a fundamental conflict between what the developers say they need to be feasible and what the community is saying they feel they need to be comfortable.”
That is the story in every neighborhood development fight, and it was the same story 18 years ago, according to those involved then.
“Things always get to be tilted toward how a few people can make the most money,” said resident Anita Genger at one meeting. “The people who already own land and can benefit from maxing out development.”
Zoe Boniface, a Holmes-Foster resident, served on the West End Revitalization Committee created by Delta Development to collect community input for the 2007 plan that council approved. She explained in an interview the dilemma the Planning and Zoning Commission faces.
“Part of what they’re getting hit with now is the well-intended but unsuccessful efforts of Urban Village zoning,” she said. “This time, in order to deal with that lack of expertise, they spent some money and hired consultants to give them advice. …They spent at least a year going through an inch and a half of paper and distilled that down and made it much more understandable.”
It was a tedious year. Planning Commission meeting minutes show seemingly endless conversations about the smallest details in the deepest pages of the extensive report. The job was to take the Delta plan, called the West End Revitalization plan, that had been generally well-received by the stakeholders, at least the most vocal ones, and turn it into zoning that would put the plan into practice.
That was where the plan began to warp into something local residents didn’t recognize when they saw it next, at a public hearing in June.
“They had to deal with some economic realities,” Boniface explained. “The reasons (the planning commission) tried to up the zoning measures is because they were afraid of once again producing a plan that did not give developers enough incentive to do the things the plan calls for.”
Planning Commission Vice Chairman Ron Madrid agreed.
“No developer or landowner is going to redevelop their property on the West End unless the zoning is going to allow them to increase the value of their investment,” he told Voices. “If they’re making money just doing nothing, what recommendations could we provide that would motivate them to upgrade? Without doing that, the West End is going to face the same fate as the Urban Village.”
Playing “The Price is Right”
Enter another government entity appointed by the mayor and charged with redeveloping areas of State College: The Redevelopment Authority, also a group of citizens who have little planning, zoning or development expertise.
“The charge to the RDA was to take a look at the zoning that had been proposed and test that against the market,” Planning and Community Development Director Carl Hess explained.
That group, made up of a physician, Charles Maxin; three Penn State employees (Vicki Fong, Eliza Pennypacker and Duane Bullock); and a banker, Stephen Yohannan, listened to the advice of planning staff and created an ad hoc committee to crunch the numbers on the Delta plan.
So staff pulled together a new committee, the names of which are not included in the RDA’s report to the Planning and Zoning Commission. A Freedom of Information Act request resulted in the borough providing this list of committee members:
—Dan Abruzzo, representing the Heritage I committee of the Chamber of Business and Industry of Centre County;
—Cory Donaghy, of the Homebuilders Association;
—Chuck Farrell, of Beneyfield Developers;
—Daniel Lestz, of Penn State Federal Credit Union;
—Larry Miles, of Vigilant Security;
—Steve Watson, from Penn State campus planning;
—Yohannan, representing the RDA.
This provided an opportunity for developers and potential developers to weigh in on the plan. The Heritage I committee that Abruzzo represented, for example, is “a committee of income-property owners, real estate developers and affiliated businesses in Centre County,” according to CBICC materials. Membership includes real estate interests and affiliated businesses such as banks, law firms and Delta Development Group.
The RDA ad-hoc committee developed three scenarios related to the West End Revitalization plan. The first two scenarios worked within the density and layout of the Delta plan. But the numbers didn’t look good.
“There wasn’t enough return that would be an enticement to redevelopment,” the borough’s Hess said. “So then we did a couple of more scenarios. How much rent would you have to charge? And it was like $4,000 per month—pretty outrageous—so then we did another set. Where would we have to go with density if we used more realistic market rents? So the last version was to keep rents constant and increase the density.”
That was when the plan began to take on a whole new character, one that some saw had more potential than the Urban Village efforts of earlier days.
“The borough has provided all the mechanisms to actually make this thing happen,” explained Vice Chair Madrid. “Some people may not like it, but at least this is more of a total package to reflect various perspectives.”
The feasibility report went to the Planning Commission to consider incorporating into its recommendation to the council (Madrid told Voices he doesn’t remember ever seeing the report but he said they did discuss the higher density). As it deliberated in time to meet its June 30, 2009 deadline, a letter arrived at the houses on South Gill in April. The letter, acquired by Voices, was one sentence long.
“I am writing to let you know that if you ever have any interest in selling your property at ———, I might have an interest in purchasing it.” [Address redacted for privacy.] The letter is signed Joel Myers. While it was printed on letterhead from Myers’ personal address on West Hamilton Street, the envelopes were stamped with the return address of Westside Village Rentals, 623 W. College Ave. R.#8. Westside Village Rentals boasts management of 26 properties, almost all of which are former homes now partitioned off as apartments.
The Planning Commission called a public meeting for June 11 of this year at Unity Church in the West End. More than 80 people turned out to hear for the first time the commission’s take on zoning under the new plan. That’s when they learned that the West End Revitalization Plan had become student housing units from six to eight stories high on one street and four to eight stories high on another.
“It was a far cry from what we had come up with with the consultants and the initial recommendations of what the West End needed,” said Rich Kalin, West End resident, attorney and property owner, who served on the Delta committee.
The Planning Commission received an earful at that public hearing, and following the June 11 meeting, it revised its recommendation on density, from a maximum of eight stories to a maximum of four stories in most areas.
But concern bordering on outrage began to spread across the community and residents no longer trusted the process. They turned out for the August Borough Council work session to be sure Borough Council got the message too.
“I don’t see incentives for families and young couples to hold onto those homes,” Michelle Rowland who lives on South Gill told council.
“I have the distinct impression developers have been calling the shots on the new zoning,” said Susannah Barsom, who owns a home on Nittany Avenue.
“Lot consolidation says to me, ‘Get the bulldozer! Time to get rid of the brick and put up something big and shabby,’” said Kim Faulds, who lives on West Foster.
And at least one council member had a similar response.
“Zoning is what you want this town to be,” said Peter Morris during the work session. “What this zoning says is that if it’s going to be redeveloped, it’s going to be redeveloped as student slums.”
How dense can they get?
But council members have more than just residents to consider. They have, first and foremost, a tax base to build if they are going to keep the borough economically healthy when about half of the property of the borough is, for one reason or another, off the tax rolls. The maximum density a community will tolerate is one of the considerations for doing that.
“If you’re business-oriented, it takes financial sacrifice to not go for the max, and that’s what we need,” Goreham explained.
So what happened to the months of work by the RDA and the Planning Commission on the issue of density? Where now was the input from developers who needed a certain critical density to make it worth developing?
As commissioners realized that residents would not tolerate eight stories of anything, much less student housing, they looked to downscale. But what could developers live with? They looked into the audience. There sat Ginny Chuba, owner of three properties and property manager for S.C. Sun Corporation, which owns almost 20.
“She was the only one at the planning commission meeting prior to our official submission to council,” Madrid explained. “And we asked, ‘What would you need?’ and she’s the only one who answered.”
Four stories would be enough, Chuba said, according to Madrid and borough planner Hess.
Will it be enough? Or is it too much? The borough council will discuss it again at a work session Sept. 14, and then decide next steps. In the meantime, some fear that without the high (enough) density carrot hanging in the wind, current large-property owners will do nothing, letting their houses continue to deteriorate to the lowest possible level permitted by what some consider lax building code enforcement.
But Boniface said the protections homeowners are seeking are built into the zoning proposal. It just requires reading between the lines.
“If you let something deteriorate to the point where it’s going to get condemned, your hand is forced to act,” she said of the property owners. “If you tear it down and you cannot use that property for any economic use, as in a bare lot, (for parking), then you have an incentive to do something with it. The alternatives seem to be either rehab the property you’ve got—something that current landlords, to my knowledge, have not had a universal incentive to do—or rebuild something that the community is willing to have there.”
Madrid agreed. He told Voices that building brand new, attractive high-rise housing closer to campus will draw students away from older, less-well-maintained homes, giving those property owners an incentive to either rehab or raze their buildings.
Kalin, who said he has owned rental properties in that neighborhood for decades, said new construction in or near the neighborhood makes the market for his rental property “soft” only temporarily and that he has never experienced a long-term threat from new construction.
“It’s the total number of student units available compared to the number of students who want to live in them,” he said. “It’s somewhat self-selection; the kids who want that and can afford that will go to those units, but that’s been happening for 30 years.”
Residents seem organized enough, so far, to keep high density student housing out of their back yards. So is the Downtown Improvement District, whose executive director testified in favor of the high density housing in the West End during this process.
Kalin sits on the board of the DID and said that one of the DID’s interests is to keep any more of that housing out of downtown. But, he added, the solution is not to put it in the West End.
“They need to go back and relook at the whole plan,” he said of the Planning Commission. “They got way off track. If their goal is to find a place to build student housing and they don’t want to do it downtown, they want to stick it over here, I don’t think it’s a good idea.”
The talk from the borough planning staff is about what developers are willing to invest in the West End, what densities they need to make it worth their while and how to allow market forces encourage private sector development.
Yet the last three pages of the West End Revitalization Plan facilitated by Delta Development lists 20 potential funding sources for the project—all of them public. Millions of dollars in federal and state funds are available, from full-fledged grants, to loans to matching funds. These are the “public/private partnership” incentives referred to throughout the plan.
Already, the borough has dedicated more than $150,000 of federal stimulus funds to rebuilding Barnard Street behind the Greyhound Bus station, but new roads are only part of the plethora of projects that public agencies have to offer.
Funding for public programs extends from road improvement funds to transitional housing for homeless veterans. There are funds for safely getting children to school by bicycle, revitalizing brownfields, preserving historic transportation and planting parks.
And who will benefit most from this infusion of public funds?
First, there are programs the borough has expressed interest in, such as workforce housing, that would benefit from a public infusion, but those become another issue for at least one resident.
“They’re all into affordable housing, workforce housing,” said business owner Simbeck. “In other words, we don’t have a slum in State College so we’re going to start one.” The auto repair shop owner said the best answer is relaxing zoning requirements to make them less burdensome for small business owners and not tilted toward large developers.
Then there are the developers themselves.
“They talk about partnerships,” Simbeck said. “I’m sure they have a developer in their pocket, someone from another area. I’ve known that all along. To someone from outside our area, this town is a gold mine.”
At least one resident agreed.
“I’m wary of big time apartment developers,” said Holmes Foster resident Carrie Jackson, who said she enjoys living in mixed neighborhoods as long as there’s a balance. “I happen to know of one or two locals [who might develop] but I can’t imagine that in today’s world that it’s all local.”
Some say it doesn’t take someone from the outside when so many on the inside are sitting on prime property. When asked, Kalin, who has been named by some residents as a potential property-owner-turned-developer, said that he has never been interested in redeveloping his properties. But are others holding onto their properties waiting for the right opportunity to sell or tear down and make a killing on high density student housing?
“I’m not sure that’s happening but if it is, is that a crime?” he said. “Isn’t that how the world works?”
Residents who spoke at meetings and in interviews were pragmatic though they remain opposed even to the revised densities.
“Without financial support I honestly don’t think a whole lot will change,” Jackson said, sighing. “As someone said at the August meeting, and I agree, I’d rather it stay the way it is now than be faced with four-story apartment complexes.”
Meanwhile, Simbeck, Kalin and others residents and business owners wait for the borough to pre