High-rises keep popping up in downtown State College, and they all have one thing in common: commercial space.
The borough is using residential housing projects to try to bring "vitality" to the streets of downtown. One of the borough's policy goals is to get additional retail and office space, said Ed LeClear, State College planning director.
He said developers won't build that kind of space unless it's required for them to do so.
"The objective has always been: … We wanted more for our residential units than just residential buildings. And so we use the driver of the money that they can make off the residential units to get other uses," LeClear said.
In the borough's Commercial Incentive District — which includes most of the downtown area, with the exception of the College Avenue corridor from Dante's Inferno to Burrowes Street, and then the "spine" that runs up South Allen Street to Happy Valley Nittany Optical — there's a mixed use requirement, he said.
Additionally, in the CID zone, there's an overlay that allows for the 12-story buildings, he said. Those have two requirements: that the first floor is commercial and that there's one FAR of commercial.
FAR is floor area ratio, and it's based on what a developer can build on a parcel as one story. LeClear said that if a developer decides to half that, then one FAR could end up being two floors of commercial.
When residential housing developers are building their spreadsheets to figure out what revenue they can make off a building, they'll typically count the commercial space as zero revenue, he said.
"They will expect that they’ll never fill it and that they consider it essentially a price of doing business," LeClear said.
Counting the commercial space in the Metropolitan — it has two incoming tenants, Orangetheory Fitness and Tadashi, but it's not yet filled — and the commercial space in all the other buildings in the pipeline for development in downtown, there's about 200,000 square feet of commercial space planned, he said.
"So in three years, if everything builds, we'll have added a little more than a Walmart of (commercial) space to downtown," LeClear said.
Those mixed-use requirements have been in place for about seven years now, he said, and the borough is just now starting to see the space being built so they're not really sure how strong the market is.
But what LeClear said he does know is that almost all of the downtown commercial space is aging and not considered up to modern expectations for floor-to-ceiling heights and amenities.
"This will be new, modern space that kind of is ready to go for today's market," he said, adding that it's not just the amount of space, but also the quality of the space.
In the past six months, there have been high-profile announcements of closures of longtime local businesses, like Herwig's Austrian Bistro.
LeClear said he fields a lot of questions about whether these closures are somehow being caused by other development, but he thinks a lot of the closures are due to the owners' personal situations.
And as there are closures happening downtown, there are openings happening almost as quickly, said Douglas Shontz, borough communications specialist.