HARRISBURG-LANCASTER-LEBANON-YORK | South Central, PA | Regional Development Thread

[EastSideHBG]

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Unfortunately, I am not getting my hopes up for many reasons with one being that HBG does not need 3 hotels and two, the sucky economy going on in the country right now.

[Young Gun]

The earliest any of these projects are going to be completed is middle to late next year (Aloft) The other 2 are likely to open in 2010. The economy is going to very different then. Money is out there to be invested, (banks have to recoup losses somehow) if you have good business paramenters. The loans required are relatively small. I think Aloft is going up for about $16M right??

[EastSideHBG]

Originally Posted by Young Gun

The earliest any of these projects are going to be completed is middle to late next year (Aloft) The other 2 are likely to open in 2010. The economy is going to very different then. Money is out there to be invested, (banks have to recoup losses somehow) if you have good business paramenters. The loans required are relatively small. I think Aloft is going up for about $16M right??

I disagree, and I don't think the economy is going to be any better by then, as that is not that long of a time frame and energy prices/prices in general are going nowhere but up. Hotels are good but they have a very limited focus: out of town travelers.

But time will tell and I could be wrong...

[Young Gun]

Originally Posted by EastSideHBG

I disagree, and I don't think the economy is going to be any better by then, as that is not that long of a time frame and energy prices/prices in general are going nowhere but up. Hotels are good but they have a very limited focus: out of town travelers.

But time will tell and I could be wrong...

Time is the way to find out the general direction of the economy. I like the out of town focus of Hotels. Hotels are a great source of revenue that doesn't come from the local population. As a former resident I know you are fully aware of the tax load of the Harrisburg resident. This year I will pay >$6000 in taxes on a very modest house. The Aloft hotel takes two properties making ~ $10k total in taxes and turns it into several hundred thousand (I looked for exact tax number but WCI Partners took the hotel off their project page of their website)

Harrisburg continues to weather the sub prime storm very well. I believe the region as a whole will come out of the current slump significantly stronger than surrounding regions.

[EastSideHBG]

Originally Posted by Young Gun

Time is the way to find out the general direction of the economy. I like the out of town focus of Hotels. Hotels are a great source of revenue that doesn't come from the local population. As a former resident I know you are fully aware of the tax load of the Harrisburg resident. This year I will pay >$6000 in taxes on a very modest house. The Aloft hotel takes two properties making ~ $10k total in taxes and turns it into several hundred thousand (I looked for exact tax number but WCI Partners took the hotel off their project page of their website)

Harrisburg continues to weather the sub prime storm very well. I believe the region as a whole will come out of the current slump significantly stronger than surrounding regions.

My point was that hotels = out of towners = traveling = there definitely won't be as much of that if gas prices continue to rise, which I am sure that they will. If there weren't so many hotel proposals, I wouldn't be as nervous...but I think that there may be too many eggs in one basket here. Urban living has been (and definitely will be) the hot "new" thing so why not a residential tower in the mix?

I totally agree with you that the property taxes in the city have been and are WAY out of hand.

[Young Gun]

Originally Posted by EastSideHBG

My point was that hotels = out of towners = traveling = there definitely won't be as much of that if gas prices continue to rise, which I am sure that they will. If there weren't so many hotel proposals, I wouldn't be as nervous...but I think that there may be too many eggs in one basket here. Urban living has been (and definitely will be) the hot "new" thing so why not a residential tower in the mix?

I totally agree with you that the property taxes in the city have been and are WAY out of hand.

Some of the reason that they are out of hand is most of the new (residential) development has at least partial tax holiday's for the first 10 years. I think it is good thing to have, but maybe not 10 years. 5 years I think would be better. It is long enough in the future to make the houses attractive to buyers, but will add new money to city coffers quicker.

I fully expect one of the state street projects to fall through. And if I had my pick it would be the Aloft. We now have a fully prepped vacant site for a nice tall building to be constructed. I am willing to wait a couple of years if that is what it takes for that to happen. All three of the new hotels will depend on the business traveler market to fill them. As long as the economy stays stable that market will still be around.

In other news:

Midstate rated nation's 3rd-best area by cost, urban amenities
by DAN MILLER, Of The Patriot-News Monday June 30, 2008, 11:32 AM

SEAN SIMMERS, The Patriot-News 2008
Based on amenities and the cost of living, the Harrisburg-Carlisle area might be one of the nation's best, according to a recent study.A study for MSN ranks the Harrisburg-Carlisle area third in the nation on the basis of real-estate cost and livability.
The study by Bert Sperling of Sperling's Best Places looks at the most affordable cities with a population of at least 500,000, counting the surrounding area. Harrisburg ranks third behind Wichita and Omaha.

The list of nine cities is meant for people who can't afford the real estate in big cities like New York, Los Angeles and San Francisco but who don't want to give up the culture and amenities of urban life.

Harrisburg and the other cities have relatively low unemployment, short commute times and enough entertainment and recreation to keep people busy, according to Sperling's report.

He ranks affordability by using a ratio of median income to median home price. Pittsburgh ranks seventh in Sperling's list of nine.

http://www.pennlive.com/midstate/ind...d_most_af.html

The blurb from the Sterling Report

Harrisburg-Carlisle, Pa.

Harrisburg is the capital of Pennsylvania. And like other capital cities, it has a built-in buffer against economic storms with its large base of government employment.

It's a quiet city in the central part of the state, an hour and a half east of Philadelphia. Once economically depressed, Harrisburg's economy is now slowly shifting out of manufacturing and into logistics and distribution, life sciences and technology-support services.

Jobs at these companies are pulling in more young professionals like Brian Reilly, a 23-year-old coordinator for Harrisburg's business innovation zone, which helps form partnerships between industry and the area's universities. "I really like it here," Reilly says. "Coming from Philadelphia, where you can only get to know one section of the city really well, I feel like I know the whole city and its amenities. There are a lot of different festivals that are always going on, and a strong group of young professionals."

There also are history museums and a strong fan base for the area's minor-league sports teams, many of which play on City Island, a waterfront sports-themed development.

Cons: Some complain of a lack of things to do if you're not a sports fan. Public transportation is limited. Reilly and others on Sperling's site complain about the poorly planned roads and freeway system. And it's an hour and a half away from the nearest large city.

http://www.realestate.msn.com/Buying...63709&GTI=9226

All of the continual talk of the Harrisburg-Carlisle Pa has gotten me to thinking. In the future will the Harrisburg region fully "morph" with Carlisle into one continuously developed region? Making them in effect a unified city? In the last year I have seen more and more references combining the two. I know that Carlisle has always been in the Harrisburg MSA, but it ususally wasn't identified with Harrisburg. Maybe cause the city had so much trouble. IDK. The continued development along the Carlisle Pike definately doesn't hurt the combining of the two's identies.

[EastSideHBG]

It's a quiet city in the central part of the state, an hour and a half east of Philadelphia.

Wow, Harrisburg's an hour and a half EAST of Philadelphia?!? How come I could never find the beach when I lived there, though?!? And the capital of PA is actually located in NJ?!? Who would've thunk it?!??!?!?



That report is good news...I guess. I dunno, I just can't help but feel an underlying slap in the face to the area, though, with lines like this:

The list of nine cities is meant for people who can't afford the real estate in big cities like New York, Los Angeles and San Francisco but who don't want to give up the culture and amenities of urban life.

[Young Gun]

Originally Posted by EastSideHBG

Wow, Harrisburg's an hour and a half EAST of Philadelphia?!? How come I could never find the beach when I lived there, though?!? And the capital of PA is actually located in NJ?!? Who would've thunk it?!??!?!?



That report is good news...I guess. I dunno, I just can't help but feel an underlying slap in the face to the area, though, with lines like this:

The list of nine cities is meant for people who can't afford the real estate in big cities like New York, Los Angeles and San Francisco but who don't want to give up the culture and amenities of urban life.

Well even including Carlisle, (basically half way to the Maryland/PA border) it is still only half a million. We aren't exactly huge around here, I just wish the "city" of Harrisburg actually could expand its borders to include all of the Harrisburg zip codes. it would be double its current population and the surrounding zip codes would benefit from strong leadership, even if it is coming from Reed. Slap us in the face or not we still outscored Dallas/Fort Worth... If they are grouped into the same group as us I'll except the slap. As much as slapping them as promoting us

[danwxman]

Originally Posted by EastSideHBG

Wow, Harrisburg's an hour and a half EAST of Philadelphia?!? How come I could never find the beach when I lived there, though?!? And the capital of PA is actually located in NJ?!? Who would've thunk it?!??!?!?



That report is good news...I guess. I dunno, I just can't help but feel an underlying slap in the face to the area, though, with lines like this:

The list of nine cities is meant for people who can't afford the real estate in big cities like New York, Los Angeles and San Francisco but who don't want to give up the culture and amenities of urban life.

You would see it that way. It's not a slap in the face at all. Note the next line: The list of nine cities is meant for people who can't afford the real estate in big cities like New York, Los Angeles and San Francisco but who don't want to give up the culture and amenities of urban life.

There's nothing wrong with not being able to afford the outrageous costs of living in the big coastal cities.

[MidtownMike]

Originally Posted by danwxman

There's nothing wrong with not being able to afford the outrageous costs of living in the big coastal cities.

Nor wanting to deal with the hassle of those cities...

EDIT: Grammar.

[EastSideHBG]

Originally Posted by danwxman

You would see it that way.

LOL well whatever, my point was that the article seemed to take its digs on the people of Harrisburg, and unfairly I might add.

Even when I am on your side (and yes, that is definitely a rare thing), I still can't win!

[Young Gun]

Originally Posted by MidtownMike

Nor wanting to deal with the hassle of those cities...

EDIT: Grammar.

Could you tell my gf that? She hates Harrisburg, not really entirely sure why, but she complains about the traffic jams coming down 81 from the north at rush hour. (she can't do 80mph through there)

[Young Gun]

You told us so....

Looks like I'll have to look at the empty lot for a little while longer.

http://centralpennbusiness.com/article.asp?aID=67037

Market stalls Hersha projects
By Jessica Bair
7/4/2008



Chain-link fencing surrounds the vacant lot on the southeast corner of North Second and State streets in Harrisburg, where construction of Aloft hotel by Starwood Hotels & Resorts has been delayed. Harrisburg-based Hersha Hospitality Trust is to manage the hotel. Photo/Amy Spangler
Hersha Hospitality Trust could have more than doubled in size this year if it weren't for the tough lending condition of the U.S. financial market.

The Dauphin County real estate investment trust has been working for the past couple of years on several acquisitions, including one major deal that would make the company significantly larger, said Hasu Shah, chairman of the Harrisburg-based company.

In fact, the trust has left the top floor of its headquarters in Harrisburg empty in case it needs room to grow, rather than searching for a tenant to lease the space.

"It would have happened," he said. "We are in the growing mode."

Shah calmly answered questions about the billion-dollar deal as he scrubbed lunch dishes and gave a tour of the company's headquarters on Front Street.

The deals did not close this year because it is taking longer for loans to be approved by banks, said Mayur Patel, general counsel for the trust's parent company, The Hersha Group. The company has been dealing with banks the size of UBS and Merrill Lynch & Company Inc., Shah said.

Patel would not disclose the name of the companies or the value of the deals. The trust will continue to pursue large deals, but it's taking longer to get the funding to do all the deals, he said.

In spite of the cost of the deals, the trust would be able to manage the acquired hotels for less money, while still retaining the quality, Shah said. And the trust's earnings per share would not dip as a result of the deals, which would likely be debt-heavy, he said. It is a craft he has been perfecting since he founded the trust's parent company in the 1980s.

"Our bottom line will be better," Shah said.

The financial market also is affecting a project close to the hearts of Harrisburg officials and residents. Construction of the anticipated Aloft hotel by Starwood Hotels & Resorts at the corner of North Second and State streets in Harrisburg is being delayed until the end of this year or the beginning of 2009, Patel said. Hersha and Harrisburg-based WCI Partners share ownership of the hotel, but Hersha will manage the hotel.

"It's hard to finance in the current market," Shah said. "We want to make sure it's a good building."

While some banks have cut off financing to all hotel projects, Hersha is still able to get loans, but it takes more work and more time, Patel said. Hersha originally wanted to break ground this summer on the 138-room hotel. It will take 12 to 14 months to build the hotel, which would mean a 2010 opening date, Shah said.

The constraints and requirements attached to the site of the hotel are another reason it's taking longer to begin construction of the project, Patel said.

"There is little to no financing available for hotel construction," said Jeff Donnelly, managing director of real estate and lodging equity research for Wachovia Capital Markets. "In addition to a difficult financing market, materials costs are up sharply. Steel costs are up 100 percent to date, and copper and concrete continue to see steady rises, too."

The value of existing hotels is slipping because projects are being delayed or canceled due to difficult financing terms, he said. The demand for hotels also is weakening as oil prices tighten disposable income and corporate profits, he said.

"Bottom line, we should see further weakness in hotel fundamentals and a significant decline in projected 2010 (and further) hotel completions," Donnelly said.

What does this mean for the Barto Building??

[EastSideHBG]

Originally Posted by Young Gun

Could you tell my gf that? She hates Harrisburg, not really entirely sure why, but she complains about the traffic jams coming down 81 from the north at rush hour. (she can't do 80mph through there)

I hate it too, so we probably have a lot in common.

But in all seriousness "hate" is a very strong word and I would have to say that I don't hate it, but rather, I have a "strong distaste" for the area. IMO it has many of the negatives of big(ger) city urban living (e.g. crime, horrible traffic, bad attitudes) w/ none of the positives (e.g. diversity in things to do, good public transit, etc.). If they would get their act together and tip the scales in the right direction, my opinions would probably change.

Maybe if I didn't grow up there and know all of the ins/outs of the area I would feel differently. But IMO it is long overdue for a redefinition of sorts, and I would love to see it morph into what I know it COULD be...

[Young Gun]

Originally Posted by EastSideHBG

I hate it too, so we probably have a lot in common.

But in all seriousness "hate" is a very strong word and I would have to say that I don't hate it, but rather, I have a "strong distaste" for the area. IMO it has many of the negatives of big(ger) city urban living (e.g. crime, horrible traffic, bad attitudes) w/ none of the positives (e.g. diversity in things to do, good public transit, etc.). If they would get their act together and tip the scales in the right direction, my opinions would probably change.

Maybe if I didn't grow up there and know all of the ins/outs of the area I would feel differently. But IMO it is long overdue for a redefinition of sorts, and I would love to see it morph into what I know it COULD be...

You obviously like it deep down in your heart somewhere, you keep coming back here.

[EastSideHBG]

Originally Posted by Young Gun

You obviously like it deep down in your heart somewhere, you keep coming back here.

Coming back to visit through the forum is one thing...coming back in person is certainly another.

But on the real, it's my hometown and I spent an awful lot of time there, and I put A LOT of blood, sweat and tears into it. No matter where I end up on the map, I will always keep an eye on it and its development.

[danwxman]

Anybody else hear about the "rumor" of a grocery store being built in Midtown?

[Young Gun]

Originally Posted by danwxman

Anybody else hear about the "rumor" of a grocery store being built in Midtown?

I have heard no such rumor, but if there is a person about to propose it then I will say "I support it!!"



anyone think the rise in gas prices will help to drive investment in the city??

[danwxman]

Originally Posted by Young Gun

I have heard no such rumor, but if there is a person about to propose it then I will say "I support it!!"



anyone think the rise in gas prices will help to drive investment in the city??

My friend (who also lives in the city) heard from a reliable source that there is actually a plan already in place. While I'm half hoping it will be a Whole Foods (would be great for the city) I also wouldn't mind just a smaller, affordable chain like a Shure Fine or Aldi.

[danwxman]

Gas prices will surely help drive investment in the city, but I wonder how many people will consider moving into the city after all the negative press Midtown has gotten lately. There are a LOT of homes for sale in Midtown, at least 2-3 on each block! I wonder if these are people cashing out on the market right now or moving out because they are tired of the city....some of the homes have been sitting on the market since last winter.

For example, a few months ago there was one listing on Reily street....now after walking down the street yesterday there are five homes for sale just between 2nd and Third.

BTW, in the new budget CAT (Capital Area Transit) is getting over 1 million more dollars in funding, which is good news. Maybe we will get some more routes and increased frequency. When I lived on the west shore I would occasionally take Route C which follows the Carlisle Pike then Market street into the city. I remember once last Fall the 5:00 bus out of market square had every single seat taken...I've never seen a CAT bus that full (and to the west shore no less).