How can downtown State College attract and retain businesses? Meet the new business advocate

As part of an effort to attract and retain businesses in downtown State College, the Downtown State College Improvement District and the Borough of State College Redevelopment Authority recently created a position to focus on just that.

Kendra Kielbasa was appointed by the two entities in April as the retail and commercial business advocate, a position that is jointly funded by both organizations. Since then, she’s kept busy meeting business owners and hearing about the challenges and opportunities in downtown State College.

During a phone interview in August, Kielbasa said it’s an exciting opportunity to make an impact in downtown State College. Finding ways to help existing businesses, and creating initiatives and strategies to bring in new businesses while continuing to support already established businesses are all things she’s motivated to work on.

“This is something that is really a community initiative. This is holding hands with various partners, building partnerships, collaborations, and those relationships, and the relationship building is really what we’ve been doing over the past three months, working with meeting business owners, meeting property owners, borough officials, all kinds of economic development organizations,” she said.

Two common criticisms of downtown State College are that there are too many high-rises and a lot of vacant space. The area of downtown that the improvement district has includes Atherton Street to Sowers Street, and College Avenue to Highland Alley.

It’s true that there are vacant spaces, Kielbasa said, but it’s not out of line with what is happening nationally. As of mid-August, there were 16 vacant and available spaces, 10 “inactive” vacant spaces (this could mean a business is in the process of moving out and the landlord has another business coming in that isn’t public yet, or they’re planning to do renovations), a pending redevelopment project and some expansions. She anticipated several new businesses planning to open soon.

“Our vacancies are not as stark as what we may have believed at one point, and certainly we are going to see movement in those high-rises,” she said. “We’re going to see some businesses move in, probably by this winter, in one or two spaces, and definitely within the next 18 months, there will be a lot fewer spaces available in those high-rises.”

Part of the issue with filling space in the high-rises is that they’re commonly “gray shell space.” Therefore the cost for a business to build out the space can be extremely high. Other issues include parking, an almost constant hot topic in downtown State College.

“I think that’s one of those painful points that we have to think about and address,” she said.

Below is a Q&A with Kielbasa that took place in August about her role and downtown State College. The interview has been edited for length and clarity.

Centre Daily Times: Diving into attracting and retaining businesses downtown, in 2022 the CDT reported that more than half of the commercial space in the high-rises were vacant . What does that look like today and what are some ways that you’re hoping to bring in new retailers into those spaces?

Kendra Kielbasa : The downtown district has a very specific footprint. … The high-rises that are within our district are The Fraser Centre , — which is not student housing, but it is a high-rise with mixed use development — The Standard , The Maxxen and The Edge . So the other high-rises, while I am familiar with them, they’re actually outside of our district.

I’m just going to talk about what’s happening within the Downtown Improvement District. So in the case of 2022, I think we had mostly vacant spaces. I believe there were one or two restaurants, perhaps in The Maxxen on the bottom floor; definitely The Standard was vacant. So where we are right now, the borough will be voting on the liquor license for Buffalo Wild Wings . Presuming that goes through, Buffalo Wild Wings will take a large space there in The Maxxen (the borough has since approved the liquor license transfer for Buffalo Wild Wings).

That’s going to leave upper level space available. The way it slants down from Beaver to Calder, there are two spaces up on that other level. We have gone and viewed those. One of the things that we did was pull together a group of experts in the area. So we brought together a construction company, the code office, the planning office, the broker involved, and then Lee Ann (Jeffries), our executive director from my office, and me … to look at the spaces and (assess) what does that look like, what is it going to cost for a business to come in here and get it ready. As you know, it’s a gray shell, so we don’t have walls, there is no electricity, there isn’t plumbing, there’s no HVAC. You’re really starting from scratch.

We know it comes at a tremendous cost, but one of the challenges is also for us to pick what those fees are going to be. We’ve got to determine what that use is going to be. (For example) if we say it’s going to be a farmers market, and then we’ve got a retailer that comes in and it wants it to be a high-end clothing store, those are two very different uses and fees involved in the construction cost. So we don’t have that together, but we’re being very intentional about looking at this and understanding our challenges. Because the reality is these are expensive spaces to build out. There has been a perception that the landlords are not interested in working with tenants to come into these spaces. That is not at all the case.

… Our landlords are willing to work with businesses, but in order to make it work, honestly, they’re really looking at businesses that have a proven model. ... So by nature, it will be more challenging — it’s not out of the question to have a small, local business move into one of those spaces, but as a start up, the cost could be astronomical.

CDT: Are there any downtown areas or other similarly sized cities that you think have done a good job at attracting and retaining businesses in the area that you’d like to emulate here, or that you’re looking to for inspiration?

Kielbasa : We’ve looked at a number of places, and actually, prior to my coming on board, there have been some trips to some of these places. But we know Statesville , (North) Carolina has an interesting downtown that’s vibrant that is of interest to us. Iowa City has been named, Charlottesville and Blacksburg , Virginia, both also university towns. Charlottesville has a dynamic downtown and pedestrian walk path, however, the university does not butt up to the downtown. Another one would be Ann Arbor , they have a different situation, but they are also struggling with some of the retail there as well.

So, we truly are unique. We have relationships with other Downtown Improvement Districts that we’re all the time talking with, and particularly those that are university facing, and ours is just really unique. And so we need to dig deep and find some unique solutions that support our student population, their families when they come to visit, and then all the millions of other visitors that come into the region for, you know, our culture, for our outdoors events and all of those things. We need to look at that, because we’re the heart right here, the heart of Happy Valley.

CDT: In the press release that was sent out in April announcing your new role, you mentioned wanting to bring in a mix of businesses — what types of businesses do you hope to attract?

Kielbasa : What we are finding is it is more cost effective for some of the restaurants in the food and beverage, and then some of the larger regional and chains, because of the rent.

We want to attract the businesses, but I want to be very clear that our existing businesses and organizations that make up the downtown, that’s a priority for me. We want to make sure that we’re here to support them, that we can help remove barriers, that we can provide them with resources that they need and that they feel supported because they’re here now, they’ve been part of the past, and I think they’re integral in helping define what the future is going to be. So I don’t ever want to not have them in the picture and in the conversation. … And I want them to feel that they’re being supported.

There is room to bring in a mix of retail and businesses. Retail has changed a lot over the past years, and it was changing even pre-COVID. People are shopping online, but they still like brick-and-mortar stores. That said, retail, not only here in this area, but across the country is really … shrinking. So even nationally, retail spaces of 2,000 square feet and smaller, that’s becoming more the norm, and the small niche is what people are gravitating toward.

People are looking more for an experience. So that experience shopping, whether that’s retail, buying clothing, buying shoes, buying art, they’re looking for that small, personalized experience, even smaller grocery stores, if we could bring one of those downtown, that would be terrific, in addition to McLanahan’s, but something maybe on a different part of town, but things that are experiential.

Is there something for children that would complement some of our bookstores that we have, or some of our toy stores that are in the area? We’ve got all the innovation and tech startups that are being launched from Happy Valley LaunchBox . Is there room for some of those startups to have a space downtown? Maybe that would be some sort of collaboration.

Obviously, we’re always going to have the restaurants. We would like the retail but the entertainment venues, those experiences, that’s what we would like, ideally. So it’s going to be a process — these are very complex processes. But as much as anything, we just want to be very resilient, dynamic, and enhance all the great things that are here.

CDT: You’ve talked about how this area is so unique, even comparing it to other similar areas. What do you think makes downtown State College an attractive place to open a business, and for the businesses that have been here, why are they staying? Why do they love it here?

Kielbasa : When I talk with some of the businesses that have been here a couple of decades, they light up. They talk about the excitement when the students are here and in town, and when those families come to visit, and then all the visitors that the university brings in. It’s just got a really dynamic vibe. We refer to (downtown) as the heart of Happy Valley. ... I’m seeing a really strong appetite in our arts community for that arts and culture to be enhanced. They’re ready and willing to work through some of those things that do that.

So I think that the business community has a strong sense of engagement and they’re very vested in the community, and they’re invested in each other. They want this to thrive, survive. It’s an exciting place. I’m always amazed at how many people either grew up here or came to school here, then they left, but something draws them back and brings them back, and they love it.

CDT: Will there be a focus to bring more small, local businesses into downtown?

Kielbasa : One of the things that we’ve been doing is working with property owners now with the pop ups . I’m maintaining a list of vendors that may be interested in doing pop ups, it’s a good way to test out the market. Also a good way for some of our vacant spaces to be used and see, is that product or service sustainable for more than a month at a time? One of the vendors that came in brought a number of other vendors alongside that business. It gave great exposure for all of them. It kind of creates some energy, particularly in a specified space.

CDT: How do you see your role in fostering collaboration between downtown property owners, business owners, and the broader community, including Penn State?

Kielbasa : We’re committed to building relationships and collaboration wherever possible. We want to build bridges everywhere that we can. We want open communication, win-win solutions for all as much as we can. So anything that we can do for joint marketing efforts.

We want to work closely with Penn State. We do have a Penn State representative on the (Downtown Improvement District) board that is very helpful to us. That said, we are aware that sometimes the downtown community might feel as though they’re not part of Penn State or vice versa. We kind of work in our silos at times, but there is a deep desire on the part of our office to work to identify ways to bridge that. We are in talks with various departments at Penn State about things that we can do that support or showcase some of their work, maybe even in some downtown vacant spaces. So we are planning some things, but it takes time, understanding how their processes work and then what they can do, and then what we can implement. Because we’re the facilitator, we’re kind of that middle piece there. … So it’s very much a moving target, but one that we’re working on. We really want to work with Penn State.

CDT: How can you balance the needs/wants of college students with the community of the Centre Region when looking at business attraction and the labor market?

Kielbasa : I think this whole role was initiated because of recognizing the impact of the high-rises and needs to address certain things. But the students are part of the downtown and will always be. Believe it or not, they don’t get out into the downtown as much as the merchants would like them to. I have a number of merchants that say ‘We would love to see more students coming into our business and buying their clothes from us, or their shoes from us, or buying a gift from us, and we’re here for them ...’ So we welcome that downtown.

But we also want them when they graduate, if they’re not staying here, we want them to come back, and we want them to engage with our downtown, and we want the types of businesses that they’ll be interested in as adults that are income earners when they come, whether they’re single or they bring families or anything else. So that is part of the equation, and just trying to get that mix, but that’s also one of the appeals about a college town. That vibrancy and that energy that exists, it’s not just the students.

Our office hosts First Fridays and Live after Fives on Wednesdays during the summer. I meet all kinds of professors that walk down and are engaging and talking, and it’s just a different type of energy that you don’t get in other places.

It is a mix. We want the students to feel like there’s places here downtown for them. We want the community, the families and the children. Really we want just that whole mix of long-term businesses that are diverse and can appeal to a wide variety.