The Borough of Chambersburg, in collaboration with the Elm Street Advisory Council, (ESAC) is embarking on a proposed long-term initiative to reclaim and redevelop the Southgate Shopping Center into a mixed-use residential neighborhood.
The project’s goal is to pay respect to the families that were displaced in 1962, when the shopping center was built, by creating a new sustainable neighborhood that promotes a mixture of uses to include housing, employment, retail and business services into the Elm Street Neighborhood.
The Elm Street Neighborhood’s ongoing involvement in the Southgate redevelopment process is vitally important to the success of this community development initiative.
For more information, please download the project summary sheet.
Southgate acquisition update
The approved purchase will be in two phases. The first phase will occur sometime before the end of 2021, the Borough will assign to the Chambersburg Area Municipal Authority (CAMA) authorization to purchase Phase 1 of the Shopping Center in the amount of $3,250,000. A non-refundable deposit of $35,000 is due upon execution of the sales agreement. The second part of the Shopping Center will be purchased within one year of the first part for an additional payment of $1,250,000. The total purchase price is $4.5 million. The site is 13.8 acres.
The Borough has completed a year-long public input planning process to develop a conceptual plan for the redevelopment of the site. Redevelopment is a core mission of municipalities throughout the Commonwealth. The goal of the project is to increase the Borough's utility sales and tax revenue by replacing this derelict shopping center with new private uses. A portion of the site will be used for storm water management and recreation. The full plan is available on the Borough website.
The purchase of Phase 1 is completely funded, without local match or contribution, by the money appropriated by the Council-approved American Rescue Plan Act funding. Further, the grant award along with tenant rental payments should provide sufficient working capital to provide the Borough and CAMA with the ability to move the shopping center to re-sale as fast as possible. For your information, in the interim, the retail center remains taxable property on the tax rolls.
The Borough will enter into an agreement with CAMA whereby CAMA buys the Shopping Center and leases it back to the Borough for management for $1. This is so that CAMA and not the Borough can be the legal owner. CAMA has the power, under the PA Municipal Authority Act to sell the Shopping Center to those developers who are in the best interest of the Borough rather than just the high bidder. The Borough will enter into a sub-recipient agreement to provide CAMA with the funding from the American Rescue Plan Act (ARPA) to allow them to undertake the purchase.
The Borough will also manage the Shopping Center on a short-term basis until resale. The Borough will not be undertaking redevelopment or any construction itself other than possibly maintenance of public rights of way and utility systems.
The Borough will also undertake a process in coordination with the Planning & Zoning Commission to adopt an overlay-zoning district to guide the redevelopment process. MBI will assist in development of the new zoning for the area. The goal of the zoning is to make the resale more likely by providing prospective developers with incentives (such as parking, setbacks, and density of development) to maximize the redevelopment potential of the site. The current zoning is Distributed Commercial Highway, which has generous zoning rules. Staff believes only minor tweaks to incorporate some rules from Downtown Core zoning and other attributes such as the role of the ESAC as advisory board, is needed and can be done expeditiously.
The Borough has applied to Franklin County for funds associated with this project including funding to execute the demolition of the Golds Gym Building in preparation for the resale of that lot.
GMS Funding Solutions has been retained by the Borough to develop a Request for Proposals to seek private third-party developers to buy the Shopping Center from CAMA.
In addition, sometime in early 2022, the Borough will either recruit or retain a part-time contract or employee to assist the Land Use and Community Development Department with the day-to-day management of the Shopping Center. This action is dependent on approval of the 2022 Budget and should be fully paid for by tenant rents.
Finally, the Borough does not need to repay the money used from ARPA. CAMA and the Borough can choose to resell the property for less than the purchase price in order to encourage redevelopment with no impact on citizens or taxes. The worst-case scenario is a quick resell of the site to the private sector. Further, any money recovered through resale can be used for this project or any other eligible ARPA project as determined by Council.
There is no guarantee that the resale of the site will return money equal to or greater than the investment of ARPA funds although that is the goal. Unlike any other scenario, recovering these funds is nice but not a requirement of the project.
The main risk to the Borough is whether there are unforeseen management expenses before the site is resold. While this is possible, as landlord, the buildings can be shuttered and resold fast if that were the case. Staff is therefore comfortable with this level of risk.
Council approved this plan on Monday, October 11, 2021.
- Mixed-Use Neighborhood Resources
Southgate Urban Design Workshop
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Southgate Urban Design Workshop Part 2
Passcode: GCE4^6jvPlease address questions to:
Guy E. Shaul
Community & Economic Development Specialist
Borough of Chambersburg
100 South Second St., 2nd floor, Chambersburg, PA 17201
Office: 717-251-2446 | firstname.lastname@example.org