NEWS INFORMATION FROM

THE OFFICE OF MAYOR STEPHEN R. REED
City of Harrisburg
King City Government Center
Harrisburg, PA 17101-1678
Telephone: 255.3040

FOR IMMEDIATE USE
21 October 2002

$34.5 MILLION HOUSING PROJECT SET FOR UPTOWN

Harrisburg, PA—Mayor Stephen R. Reed today announced that a $34.5 million housing development project will get underway in the Uptown sector of the City of Harrisburg, with work commencing next Spring.

The project involves the construction of 104 new homes and the restoration of 183 homes. Sixty-five of the residences will be sold to homeowners and the remaining 222 homes will be for rent, for a total of 287 homes being created.

Reed said some select demolition of existing structures will occur to make way for the project, which covers major parts of a four block area.

He said the project involves the complete make-over of the Maclay Street Apartments, which presently consists of two and three-story garden-style apartments and townhomes, which will now be transformed. The project will allow all existing residents to remain by utilizing vacant units, phasing construction and by providing rental assistance based on income.

The Maclay Street Apartments have been a troubled complex over the years. Previous owners had failed to properly maintain it and were eventually indicted by the federal government for a long-running scam of bilking the U.S. Dept. of Housing and Urban Development for never-performed repairs and upkeep. HUD Foreclosed on the mortgage and hired an interim property manager to run the sprawling series of homes.

The city secured HUD approval to do the actual disposition of the sites, rather than allowing them to be sold at a federal auction. “If this several block area had gone to auction, as would normally be the case, it almost certainly would have resulted in a repeat scenario that would have brought future blight,” Reed said.

HUD is turning over all sites to the city for $1.00. The city Redevelopment Authority will in turn convey the properties to the development group selected by the city after a competitive process that invited developer plans for the area.

Reed said Uptown Partners, a limited partnership, will be the new owner and developer. It is comprised of Struever Brothers, Eccles, and Rouse and the Landex Corporation. The Rouse group is already building the Capital Heights Neighborhood several blocks away in another city-prompted residential development in the Uptown area.

The Mayor said an application for tax credits to help financially support the construction cost is being submitted to the Pennsylvania Housing Finance Agency and is expected to be acted upon in March. Thereafter, title will be conveyed to the developer and work will commence a month or so later.

Reed said the city set quality and design standards for the project to assure that its upgrade would produce a long-lasting beneficial effect to the Uptown. A key component of the plan is the inclusion of homeownership as a further means of stabilizing the neighborhood. The project will take up to five years to complete, based on the pace of home sales and rent-up.

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