Penn State to complete purchase of College Heights school building

jhartley@centredaily.comJuly 15, 2014 

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A cyclist passes the College Heights school building on North Atherton Street on Tuesday. The building is owned by State College Area School District, and State College Borough Council voted Monday to opt out of its first right of refusal to purchase the property.

NABIL K. MARK — CDT photo Buy Photo

— With the State College Borough Council having waived its right of first refusal on the College Heights school building, the road has been cleared for Penn State to pick up the property.

The council supported a motion to waive first refusal Monday following a statement by Collaboration of Arts, Social Services and Education President Mary Dupuis.

In addressing the council, Dupuis said CASE had learned while exploring nonprofit centers that the “most successful model is one where the nonprofit entity eventually owns the building.”

“Once the borough discovered it could not sell the building to us due to the borough code,” she said, “our funding model became challenged.”

Major donors were reluctant to invest in rental property, she said, and the finances needed to handle renovations would rely heavily on the collection of rents over time. The grants CASE had hoped to secure were not available to leased properties.

Due to the short period of time remaining before the council’s ability to exercise first refusal was to expire, CASE was not able to pursue other options.

Dupuis could not be reached for comment Tuesday.

“I’m disappointed we didn’t know several weeks ago that if CASE was not able to buy the building, only rent it, they wouldn’t be able to do it,” Councilman Evan Myers said Tuesday. “I’m disappointed that it came down to the last minute. It’s been known that the borough was going to buy this building for the last month. It was discussed in public meetings.”

Myers said that if CASE had occupied the building, it would have been a benefit to the community. It’s the role of government to promote general welfare and community spirit, he said.

He supported his decision to waive first refusal, saying the council had been put into a position to purchase the building with no clear purpose. Out of concern for the neighborhood and the greater community, the council couldn’t know what would happen to the building and property if it had to be sold to the highest bidder, Myers said.

If it was put to any other use, he said, it could be a problem.

Council President Jim Rosenberger agreed that knowing of Penn State’s intentions for the building was better than not knowing what entity could possibly own the building if the option to sell had to be exercised.

“As a real estate venture,” he said, “it wouldn’t have been a bad purchase. But given the uncertainty of the tenant, if CASE couldn’t take the the financial responsibility, it would have been a speculative purchase.”

He said he hoped the borough could work with CASE in the future to make a home for the organization, preferably somewhere closer to downtown State College that is accessible by public transportation and where people could volunteer.

With first refusal waived, the State College Area School District has returned to its agreement with Penn State to sell the property to the university.

Penn State will purchase the property for use as the offices of the University Press, according to an email from spokesman Reidar Jensen.

Penn State will honor the borough’s right of first refusal if the property is ever put on the market again, he said, and will improve the property as required by applicable building codes.

“The university’s proposed use of this property is very similar to the State College school board’s use over the past 30 years,” he said. “The university will work collaboratively with the neighborhood association, during the property transition, and into the the future.”

From a technical standpoint, school district solicitor Scott Etter said, the district should receive formal notice to waive first refusal from the borough on Tuesday. The sale of the property, estimated at $400,000, should be complete by the end of the year.

Jeremy Hartley can be reached at 231-4616. Follow him on Twitter @JJHartleyNews.

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