Pennsylvania’s capital city, Harrisburg, has some of the best commercial real estate opportunities in the U.S.

Does that statement make you cringe? Does it make you laugh? Are you in immediate disbelief that I could so boldly declare such a statement? Are you intrigued?



Do you have your Vegas rebuttal cards ready to play? Trying to convince me it’s impossible? Am I supposed to be perpetually intimidated by the blight, the high taxes, the uncollected taxes, the tax exempt, the infrastructure, the crime, the politics, the schools, Act 47, the Standard Parking deal, the local services tax, the trash?



Those problems do exist. However, because this article is written exclusively for the leaders, thinkers and visionaries, I can say with confidence that there is not an institution in the history of the world, be it a private enterprise or government entity, that has been managed out of a bad situation. They’ve all been led.



Managers look at problems. Leaders look past them.



Let the prospecting begin

Submitted

If you’re from Central Pennsylvania and are one of the many that no doubt cringed, laughed and played your last rebuttal card, then before you continue reading I humbly ask that you get past your first emotion or reaction, move beyond the impossible and prepare yourself to see what I see.



If you’re somewhere else in the world looking for your next project, and have never heard of Pennsylvania’s capital city — well, I say there’s gold in them there hills. Let the prospecting begin.



First we need an understanding of Harrisburg city. It is one market as a whole, but there are also several submarkets within, each having pros and cons. Like an odd shaped “L,” there is uptown, midtown, downtown and the industrial corridor, which then divides to Central Allison Hill, the north side and the south side.



I’ll start uptown with the former William Penn High School. This architectural masterpiece boasts 222,000 square feet on a 25-acre campus overlooking the beautiful Italian Lake, and is surrounded by stable real estate.



Yes, it needs a full renovation and creative reuse. Yes, it would need an aggressive tax incentive (got it) to make a project viable, and yes, it needs a visionary to make it happen.



Do you think it’s too big and too impossible? Consider the former Polyclinic Hospital just a few blocks away that is now Penn Center.



Two creative, goodhearted partners took that 300,000 square feet of vacant hospital, with its dysfunctional purpose-built interior, and over the course of a few years converted it to gorgeous Class A office space. How? They took their out-of-the-box thinking and put it to work. Fun fact: Penn Center has one of the largest and oldest trees in the city, right at its front door.



Need a welcome package?

Submitted

Did you just merge with or become a Fortune 500 company and now need a turnkey office building to handle the expansion?



The PSECU building, which neighbors one of the best community colleges in Pennsylvania, boasts 180,000 square feet on a 9-acre spread, and would make for spectacular headquarters space.



Need a welcome package? According to a 2016 U.S. News & World Report, the Capital Region ranks as the 25th best place to live in America.



Do you need a little complexity in your life? Tired of the simplicity of it all? Let’s examine the Pennsylvania State Hospital campus, which is currently undergoing a several hundred thousand dollar feasibility study to determine what to do with tens of thousands of square feet, tucked into 43 quality buildings, spread around 303 acres.



Without doubt, this is probably the most magnificent, serene and highly accessible pieces of institutional real estate the country.



In 2015, I studied this property and the feasibility study requirements in depth, and I believe this real estate is going to be available at just the right time, with just the right pricing, with just the right incentives. Maybe, if we are successful in making this article go viral, we’ll have just the right tenant or buyer.



While not technically in the city, it does have a city mailing address, many people believe it is in the city due to its proximity, and the city would benefit tremendously. Hey, tech companies, colleges, real estate investment trusts, here is your dream site.



What if a buyer or tenant is not in place by the time this opportunity is packaged and delivered?



Here’s an idea

Submitted

I have this crazy idea. To make it off the scratch paper, it would require a lead cheerleader with very unique abilities — like courage and negotiation finesse, legal depth and artistic intelligence, enthusiastic endurance, knowledge of deal algorithms and especially, the ability to unite the region.



Out of the 303 acres and 43 buildings being studied, what if the state, Harrisburg city and Dauphin County were able to orchestrate a deal that takes the area known as “Lot 13” (140 acres plus all the buildings), and transfers the packaged and delivered parcels, free and clear, to Harrisburg city, with a 25-year transferable tax abatement.



The state or county can shift some offices to the site on a temporary or long-term basis, so that the city can maintain the property until a larger, single or perhaps multi-tenanted occupant is found for the campus.



A fully leased campus would most likely put cash in the city’s coffers, but even better, if the lease structure was good enough, the city could then leverage the asset in order to pursue a re-acquisition of its parking.



The county could help oversee it, the state could help broker it and the people would get behind it.



It’s possible the city could then sell the investment to a REIT, alleviate the debt it used as a tool to buy its parking back and if the numbers were real and cash left over, the city either puts it into a rainy day fund or uses it to make a better trash deal for its customers.



Wow, how much consumer confidence would the city project, and how fast would the city turn around if they could put that together? Remember in the movie “Rocky V,” when Balboa said: “I didn’t hear no bell… one more round.?”



Enough with the tangent, you need more deals right? Let’s keep moving.



Talking about the state hospital campus, let’s say all that came to fruition and now everybody wants to be close to it and soak up the energy. How close can they go? Oh just about a football field away, on the south side of Maclay Street from Route 230 to the bridge, directly across from the Pennsylvania Farm Show Complex.



Here a creative redeveloper could pick up about 160,000 square feet of unique multi-use space, in several buildings, on a combined 7.28 acres. Say what? These buildings can be partially demolished or repurposed, and in one of the buildings you’d find 40,000 sprinklered square feet of immaculate, dark red, exposed lumber framing, with gorgeous steel hardware.



Doesn’t tickle your fancy? Not private or unique enough? Let’s go six blocks away to the former TRW building at 1400 N. Cameron St.



This impressive 300,000-square-foot open warehouse on 18-plus acres has its own power plant, and is just like being on an island. Seriously, it’s like a whole other world, and even if you only needed 100,000 square feet in the City, you can buy triple for the price of one, and still get quality.



That’s silly, why would you consider this? Well, if you are the visionary I think you are, you would do what I did when I toured the facility a few years ago with a customer that only had one, 80,000-square-foot requirement.



While it did not quite work out for him, as we walked around, our imaginations ran wild. Like giddy kids, we were overwhelmed with possibilities: indoor farming, a movie studio, an indoor racetrack, a haunted attraction, indoor storage for heavy machinery, a mad scientist laboratory, building robots and much more. We figured out how the entire property could be occupied within 5 years. It takes time to make good things work. Forget Car 54 – Thomas Edison, Where Are You?



Are you saying this can’t be done?

That’s what everyone said about Capitol View Commerce Center. Tear it down, they said.



That is until John Moran Jr., president of Moran Industries, came into town and wowed us with his vision. He was quick about it, too.



What Mr. Moran achieved here, what GreenWorks Development accomplished with the Furlow Building and Evangelical Press property, and what TNT International is doing with the former 30,000-square-foot Capital Tuxedo building, is all clear testament of intense creativity being put to work in the city.



Need more? No problem. Here is something incredible: the Market Street corridor.



Forget for a second that each day over 30,000 vehicles pass a four-way traffic-controlled intersection with two available corners, there are also several attractive and stable structures that need your ingenuity.



You won’t be alone. Go be impressed by what Adam Meinstein did with the 250,000-square-foot former post office. While this corridor is just seconds to downtown, the river and the Capitol Complex, there is a pesky little problem with downtown. It can’t expand.



Or can it?



Do you hear about the new zoning designation called Downtown Center? There is a neat little element about this zone that I believe is undervalued. It exempts the off-street parking requirements. The Market Street corridor is zoned DC. Try getting that in Philadelphia or New York City without a hassle.



This is not spot zoning. In the DC and Commercial Neighborhood zones where off-street parking is exempt, there are about 273 and 1,630 parcels, respectively, just primed for urban revival.



Did I mention the Keystone Opportunity Zones, the expansive Tech Corridor Enterprise Zone, the very recently approved LERTA and the reasonable property values? Plus, Impact Harrisburg hasn’t even come into play yet.



Are these properties too big for you? That’s perfectly fine, but don’t look away yet. I am not even close to coming into account for the stunning Front Street properties, downtown office buildings, smaller functional warehouse buildings, retail availabilities, mixed-use buildings, investments, land, block opportunities or other for sale or lease space within the city.



Any tenant, any buyer, almost any industry in the free market, could find an opportunity in the city of Harrisburg. Most likely at a much better deal with a much better return.



Are you thirsty for more? Looking for an even bigger enterprise? Good, because I was saving the best for last.



Allison Hill and a powerful little word called “speculation.”



Does anyone recall what happened several years ago when word got out that a new courthouse was needed in the city? Local leaders, especially former Mayor Reed, lobbied hard for Midtown to be its home.



Sniffing gold, speculators snapped up property left and right.



Do you remember when the project stalled, restarted, stalled, restarted again and then the national economy entered a severe downward cycle? This new judicial wonder did just that and kept us wondering.



Truth: It didn’t matter anymore. Just the mere assumption that Midtown was the destination was enough to kickstart a movement that effectively changed the dynamics of roughly 18 percent of the city in less than 12 years. HACC Midtown, Vartan’s luxury condominium/retail project, the Millworks, new housing builds; they were all propelled by speculation tied to vision and matched with action.



Bonus: Business is booming at the Broad Street Market.



I have another crazy idea though. What would happen if another government or a large and exciting private project was announced with the same degree of seriousness and geographical requirements?



If today’s local leaders were to lobby for it, and the people rallied behind them, where in the city would they push the hardest?



I can tell you where I would push for it: Central Allison Hill. At 18th and Derry streets, just off the 17th Street exit and minutes to downtown, you can buy an entire commercial/industrial, 2.75-acre rectangular block. I can’t believe this is not seen as prime real estate.



The Coke building, the former Hajoca building, the land behind the new Hamilton Health, this is it, gang.



Want to see a building under renovation that might one day rival The Millworks? Drive by 333 S. 18th St.



Can you imagine a rush of developers, investors and visionaries trying to scoop up the unique properties all along the 17th Street corridor? Up and down Market Street, Derry Street?



Crystal Ball: 17th would rival Reily Street. Derry would rival Third Street. Market Street would rival parts of Second Street, and the flow of change would expand outward into the north and south quadrants.



Did you know that Sylvan Terrace, and the village-style block behind 13th Street has some of the best skyline views? Where else will you find deals like this?



Prediction: One day, the exclusive place to invest will be from the intersection of 13th and Derry streets to 13th and Market streets. Its rival would be from Verbeke to Reily streets along Third Street.



The collateral effect of investing in Allison Hill is that thousands of lives would change for the better. There are great people in these neighborhoods that very much want to work hard, and be a part of something positive.



I suppose you need more incentive to explore investing in Allison Hill? There are no parking meters. Bam.



City vs. Suburbs

Submitted

I grew up in the suburbs and the city equally, so I appreciate the real differences and appeal. I’ve brokered deals in over 28 counties, many different markets, so I am not advocating against the suburbs.



I am simply advocating for Harrisburg city. So really, how does Harrisburg city compete?



In the suburbs, you might get lower taxes and higher real estate values, but the cost to acquire the real estate is higher, low tax rates are not guaranteed forever and by the time you get halfway through your mortgage, you might have it already paid it off by being in the city.



There are so many economic incentives in the city that if your project was good, one of them is that you could temporarily remove the tax expense from your bottom line.



You may have to put some money into a city property, but nobody ever said you had to do it all at once. Perhaps you go a step further by fixing some infrastructure within, but so what? Is that not who we are? Is it not expected that with all the incentives Harrisburg could provide that a little extra is in order?



We are Americans. We fix things. We create. We don’t wait around. We get things done.



Harrisburg needs to find the next Alex Grass or Ollie Rosenberg. The next Westinghouse, the next Jobs, the next Milton Hershey, the next Google, the next Nikola Tesla, the next Spielberg, the next Thomas Jefferson, the next Dr. Dre and the next garage tinkerer that just patented a game changing invention.



Our light is on. If we can’t find them, then this article is written for them to find us.



Beau Brown is an associate broker with Bennett Williams Commercial.



Some properties discussed in this story are not represented by Bennett Williams Commercial or Beau Brown, and exclusive permission from their respective agents or owners for the purpose of this article was obtained.

