State College Acquiring Downtown Rental House Property

As it gears up to construct a replacement for the Pugh Street Parking Garage, State College Borough is moving forward with using eminent domain to acquire a downtown property — but not the one that drew substantial public backlash a year ago.

Borough Council on Monday unanimously authorized the borough solicitor to file a declaration of taking for the property at 142 McAllister St. “for the purpose of constructing a parking facility for the preparation to replace the Pugh Street Parking Garage which is nearing the end of its useful life.” The property contains a rental house.

The house at 142 McAllister St. is the last of its kind. Should demolition occur, there would no longer be any houses downtown in the box formed Beaver Avenue, College Avenue, Atherton Street, and High Street.

The borough plans to demolish the adjacent McAllister Street Parking Deck and construct a full garage with about 800 spaces to replace the 491 in the Pugh Street garage and approximately 300 other spaces from the McAllister Deck and former Allen Street surface lot . The 142 McAllister Street property will also be incorporated into the facility planning.

It’s the second time the council has authorized the move, but the previous vote on August 7, 2023 also included a similar resolution to acquire the neighboring building at the corner of East Beaver Avenue and McAllister Alley that houses The Brewery, Music Mart, and Canyon Pizza.

After two weeks of public outcry, the council rescinded that vote on August 21, 2023.

There was little consternation, however, about the rental house property on McAllister Street near the corner of East Beaver Avenue either last year or on Monday night, when no members of the council or the public opposed the measure.

“This particular parcel was not the subject of a lot of the community support and upheaval as opposed to The Brewery and the music store that are right adjacent to it,” council member Gopal Balachandran said. “I am for this, given the needs of the borough for parking.”

The property’s owner, local landlord Rodney Hendricks, did not respond to a request for comment.

Eminent domain law allows government entities “to take private property for public use in return for just compensation.” The resolution allows the borough to begin negotiations with the property owner. The parties can reach a settlement at any time and can ask the Court of Common Pleas to appoint a panel of “viewers” to determine damages. They can also appeal the decision in court.

Council member Matt Herndon said exercising eminent domain is a “difficult” decision but that the borough is “forced to essentially do something.”

“I feel like this is more circumscribed than what had been proposed in the past and our hand is essentially forced,” Herndon said.

Borough officials have been weighing what to do about the now 52-year-old Pugh Street garage for about a decade. State College has spent millions to keep the garage functional past its expected lifespan, but structural engineering studies have concluded it cannot be used beyond 2028. Parking garages typically have a life expectancy of 40 to 50 years, according to numerous engineering assessments.

Since at least 2022, the site of the current McAllister Deck — which has had its own structural issues — has been identified as the likely location to construct a replacement for the Pugh garage. Borough officials have said a new garage on the McAllister site would have to be constructed before the Pugh Street garage could be torn down because the downtown could not have 500 spaces offline for an extended period.

The Nittany Performing Arts Centre proposed for the current Pugh Street garage site would include an additional parking garage with 335 spaces, but the venue is still in the planning and fundraising stages and not yet a certainty.

Other options for the Pugh garage replacement were explored before deciding on the McAllister site, Borough Manager Tom Fountaine said last year.

The plan for the new garage on the McAllister Deck site initially included constructing it on the entire block of East Beaver Avenue between McAllister Alley and McAllister Street, including The Brewery building. With that no longer in the picture, it appears the borough intends to construct the garage around those businesses.

With the site adjacent to his property, Jay Horgas, co-owner of The Brewery and the building, asked council and borough administrators to include him in the conversations.

“We’re always amenable,” Horgas said. “We’re business people. We’re not trying to preserve a part of State College that’s— our building’s not the prettiest building in town, but it is old and there’s history there. I think however we proceed the public needs to be included. Last year I used the line that we were ambushed… It’s water over the dam. We’re in the position that you need to replace that parking garage.

“… I think we can come up with something more holistic that everybody’s happy with. I’m not saying this is the death of The Brewery or anything remotely like that… The composition of town has changed and the public generally does not like all the changes that have occurred, trying to hold on to some old charm of State College, but it might be too late for that. Whenever you go down this path I’d like to be included. Let’s try to do this in public as much as possible. I know some conversations are going to have to go privately, but I’m amenable to this because I recognize the greater situation.”

Borough Manager Tom Fountaine said staff “would be happy to talk with him and pursue any options that may be available.”

The eminent domain vote came after debate among members of the public and council over planning for parking in the future as part of the new Capital Improvement Plan. Several business owners and managers spoke during the public comment period and urged the borough not to reduce the amount of parking, saying it’s needed for downtown visitors and employees. A few members of the public said it presents an opportunity to make the borough more accessible for bicyclists and pedestrians, and even to address affordable housing issues that force employees of businesses in the borough to live outside of town and commute.

The 2025-29 Capital Improvement Plan (CIP) includes “replacement parking structures” with an estimated cost of $54.5 million to be paid for by parking revenues. The CIP is a guide, and all projects must be approved individually in the future by council.

For the garage replacement, “staff is recommending beginning the process of site selection along with putting out a request for proposals from design professionals in 2024,” according to the CIP.

“Any land acquisition required should occur in late 2024 or early 2025. The design and construction documents should be ready for bid by mid- to late- 2025 in order to make the 2026 construction season to ensure that the new facility will be ready for operation by the end of 2028.”

Herndon motioned to remove the item from the CIP in order to “take a more holistic approach,” adding that he worried parking revenues would not be sufficient to pay the debt service on a new facility.

“We should work on crafting a new item that more broadly addresses parking, transportation, housing, and safety in the borough,” Herndon said. “There are many workers in the borough who are priced out of living here. We must address that by adding affordable housing in the borough so they can live here and that should be part of an item like this. We should not be taking money from borough taxpayers to subsidize parking costs for those who do not live here because we’ve made our housing costs too high… There’s a lot of other things we can do and it should be a holistic view and not just the largest item in our CIP being a net negative for the people of the borough.”

Other council members said they agreed with his premise, but that they will have the opportunity to approach those issues through project development.

“We can do all those things, but we need to do all those things,” council President Evan Myers said. “I think we need to leave it in the CIP. It doesn’t specifically say what we’re going to do. If we remove it from the CIP, I’m concerned it will get kicked down the road and we can’t do that.”

Fountaine said the cost for the new garage may be higher or lower than estimated in the CIP “based on a lot of factors,” and that the financials and planning will all be presented to council before the project can begin.

“We’ll do all of that and present it to council before a project moves forward, but if we take it off the table we are really hamstrung in terms of having the ability to move a project to meet the deadlines that we have to replace a structurally unsound facility that does not have a life past 2028 based on the structural engineering analysis that had been previously done,” Fountaine said.

He added that for decades the borough has relied on strategically located public parking garages instead of requiring businesses to have parking lots that would eat up downtown real estate.

Council, including Herndon, voted unanimously to reject the motion and keep the parking garage replacement in the CIP.

“If we’re all ready to have a bigger discussion about this in a more holistic way, then I look forward to doing that,” Herndon said.