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This shows the four lots known as the Department of General Services Annex - one of which houses the former Harrisburg State Hospital buildings - that the state no longer needs and is looking to sell. (Courtesy of Pa. Department of General Services)

It still maybe a year or two away from the time the 295 acres of excess state-owned property, including land where the former Harrisburg State Hospital sat, is sold but it is now closer than it has ever been.

A resolution passed the House of Representatives on Wednesday by a 189-0 vote and is now in the Senate's hands that authorizes the sale of the four lots comprising the so-called Department of General Services annex property, allowing it to be returned to the local tax rolls. The Senate has until June 5 to act.

Rep. Sue Helm, R-Susquehanna Township, said she anticipates the four lots will likely be transferred to the Dauphin County Redevelopment Authority. It has more flexibility than the state in identifying the best usage of the lots. She said it is better able to take local community interests into account in determining a buyer.

Helm, whose legislative district is where the bulk of the property sits, sponsored the resolution to get the ball rolling on selling the property that the state no longer needs.

Troy Thompson, a General Services spokesman, said it's premature to discuss who the property will be conveyed to prior to the Senate's action on the annex disposition resolution.

However, he said, "we have been exploring the option of conveying it to a redevelopment authority. It may provide us with the best opportunity to sell all of the parcels together."

Selling the lots as a package was the preferred recommendation from Lancaster County-based RGS Associates, Inc., a consultant hired to study the property and identify possible uses for the four lots that range in size from 1.5 acres to 132 acres. The firm issued its report in February.

If the commonwealth moves ahead with conveying the property to a redevelopment authority, Thompson said that is a process that takes time. Before a sales agreement is executed, there are negotiations of possible contingencies such as a required time to sell the properties, a commitment to fund the marketing of the properties, or the financial return to the commonwealth from the future development or sale of the property.

The RGS report put the appraised net value of all four lots sold together as a package at about $2 million.

Making the sale even more lucrative for the commonwealth is the $5 million in annual savings it would derive from not having to maintain the grounds and do building upkeep.

Approximately 800 state employees work in offices on the property but General Services is looking to move those workers to more modern and efficient office space in the city, Thompson said.

Five acres of the property sits inside Harrisburg city limits. The rest is situated in Susquehanna Township. Much of it is zoned "conservation" with limited development opportunities permitted. Some parts have no zoning at all, according to the RGS report.

Susquehanna Township Manager David Kratzer said township officials are generally supportive of the idea of turning the property over to a redevelopment authority to sell.

"That would allow a more planned approach to the ultimate development of the parcel," he said. "There's a lot of constituent groups that have an interest in what happens there and a number of different elements that have to be considered."

They include some hospital structures on the National Register of Historic Places, the community garden, existing tenants, the Harrisburg Area Flying Club's use of the property, the portion of the property once used for a landfill, among other concerns and interests including one Penbrook has.

That small borough has a sanitary sewer line that runs across the 132-acre lot where the former hospital campus. It's been there for decades but there was no formal agreement permitting its location on the state grounds until recently when General Services granted it a revocable license, said Penbrook Solicitor Bruce Foreman.

The borough, however, is asking for a permanent assurance that it will have access to make repairs or replace the line if necessary by getting an easement.

General Services has assured Foreman the easement will be granted, he said. He has yet to see that in writing. The department spokesman said that is another example of a contingency that could be negotiated into a final sales agreement.

Although zoning changes will be needed to accommodate the desired commercial, retail, professional office or residential development on the land, Kratzer said there have been no discussions thus far about rezoning the property.

"The township has an important part to play as it relates to zoning on the property which ultimately determines what occurs on the property from a land use perspective," he said. "There's a lot of work to be done to go through an appropriate process to understand what zoning classifications on those properties should be."

David Black, president and CEO of the Harrisburg Regional Chamber and CREDC, said he sees the potential for a large office building on the 68.5-acre Lot 14 that sits along Elmerton Avenue across from PSECU. He expects it will draw a lot of interest and command a high price.

The 1.5-acres Lot 15 also could attract commercial interest. Black said he sees development potential for the 92.6-acre Lot 16 although most of it will be left as green space due to the landfill located there.

But Lot 13, where the former hospital campus sits, will be the most challenging. He sees the portion that fronts along Cameron Street, across from the Farm Show Complex, as marketable.

"Somebody might look to put a hotel in there that would feed off events at the Farm Show. Maybe a restaurant, who knows," Black said.

But the question remains as to whether the sale price will be enough to offset the cost of properly remediating the environmental concerns that exist elsewhere on the property. They include asbestos and lead-based paint in buildings, demolishing older less valuable buildings, and fixing up other structures, he said.

Overall, he said, "From a redevelopment standpoint, it would be fun project to be involved in."

He added: "There's a lot of good that can be done as well. One thing we do know is given the location of that property and here in this region as opposed to other state hospitals in other parts of the commonwealth, this is a very, very good location. That helps the marketability of it regardless of the warts."

Attempts to get comments on Thursday from Harrisburg officials and George Connor, director of the redevelopment authority, were unsuccessful.