A $40M rehabilitation hospital is planned in Innovation Park. Here’s what has to happen first

A $40 million rehabilitation hospital is in the works at Innovation Park, where Penn State approved a long-term ground lease in February, but a number of steps need to be taken before it’s built.

The PAM Health rehabilitation facility would be located on five acres of a 16-acre land parcel adjacent to Innovation Park along Innovation Boulevard, close to Interstate 99. According to Phil Schuck, the vice president of Catalyst Healthcare Real Estate — a partner company to PAM Health — the two story, 50,000-square-foot facility would employ about 120 people with “very high-paying,” full-time jobs.

In February, the Penn State Board of Trustees approved a ground lease with Catalyst Healthcare. It will initially be for 50 years, with two 15-year renewal options, and Penn State will receive a lump sum of $875,000 when the lease begins plus $67,500 a year, which will increase by 5% every five years.

Despite making headway on the ground lease, the hospital’s official development plans have yet to be approved by College Township due to some rezoning matters that need to be taken care of.

Currently, the hospital’s planned location sits in University Planned District 14 — a zoning district that doesn’t permit the construction of hospitals and medical centers. PAM Health and Penn State’s hope is that the area will be rezoned as a Business Park District, allowing for the facility to be built, although that process could take some time.

At their meeting on Feb. 20, the council directed township staff to begin the rezoning process by creating a remand letter, with the draft of that letter potentially being approved as early as the council’s next meeting Thursday.

“If [the remand letter is] approved, the rezoning request would be remanded to the township planning commission for their consideration and eventual recommendation back to council,” Assistant Township Manager Mike Bloom wrote in an email Monday. “Council is expected to request that Planning Commission provide their recommendation by May 15, 2025.”

Another issue that needs to be resolved is the expansions of the township’s Sewer Service Area and Regional Growth Boundary to accommodate for the hospital’s construction, which requires Penn State and PAM Health to complete a shortened Development of Regional Impacts application.

Under the Centre Region’s 2013 Development of Regional Impacts Implementation Agreement, the township can expand its boundary by up to 12 acres and 50 equivalent dwelling units over five years through the construction of various projects in the township like the rehabilitation hospital.

While these projects’ DRI applications must gain approval from the Centre Regional Planning Agency, they do not have to gain approval from the CRCOG General Forum, shortening the expansion process. Once the township’s acreage and dwelling limitations are surpassed though, all future projects must go through the full DRI process.

Once gaining approval from the agency, the application will return to the township’s planning commission, then council, for approval. The application will then be viewed and commented on by the Centre Regional Planning Commission.

From there, the township can take formal action to complete the DRI application process and expand the Sewer Service Area and Regional Growth Boundary.

According to an “aggressive” milestone schedule provided to the council by Schuck, PAM Health could break ground in October, if the growth boundary and development plans are approved by then. Bloom agreed with the “aggressive” characterization.

“While I can’t rule out the possibility that they are in the position to begin construction in October, it would require that each step in the process and the developer’s specific pre-construction needs all fall into place in fairly rapid succession,” Bloom wrote in an email Monday.

Despite the lengthy rezoning and expansion process, the project has garnered a positive reaction from council members.

“The rehab hospital will definitely be a good contribution to the community. The well-paying jobs and all the rest of that good stuff seems to be a really good use,” Councilman Rich Franke said at the January meeting.

The facility will house 42 beds, with the median stay for patients at a PAM Health rehabilitation hospital being 12.5 days. Each patient receives a minimum of around thee hours of rehabilitation per day.

“It’s typically a patient that is coming from a hospital — either complex surgery, a stroke, could be a spine event or brain injury — and they’re not quite ready to go home, but the hospital is ready to admit them out,” Schuck said. “This is kind of a transitionary step to get better and to go back to their homes.”

Further updates on the hospital will be seen at future College Township council and planning commission meetings.

The council meets at 7 p.m. on the first and third Thursdays of each month, and the planning commission meets at 7 p.m. on the first and third Tuesdays of the month.