Draft Fairmount Civic District Certified Redevelopment Area Plan State College Planning Commission October 25, 2007

Draft Fairmount Civic District Certified Redevelopment Area Plan State College Planning Commission October 25, 2007

Page 2 of 33 I. Introduction The purpose of this report is to fulfill the requirements of the Pennsylvania Urban Redevelopment Law to prepare a redevelopment proposal for all or part of any area certified by the planning commission to be a redevelopment area and for which the planning commission has made a redevelopment area plan. This report describes conditions within the proposed redevelopment area and documents the existence of one or more of the of the Redevelopment Area Plan requirements in Section 10 of the Urban Redevelopment Act. This act includes a list of factors that must be considered by the Planning Commission when certifying the redevelopment areas. The criteria for the plan are to include, with out being limited to, the following 1) The boundaries of the area with a map showing the exiting uses of the real property herein; 2) A land use plan of the area showing the proposed uses following redevelopment; 3) Standards of population densities, land coverage and building intensities in the proposed redevelopment; 4) A preliminary site plan of the area; 5) A statement of the proposed changes, if any, in zoning ordinance or maps; 6) A statement of any proposed changes in street layouts, street levels and proposed traffic regulation, including the separation or excluding of vehicular traffic partially or totally from pedestrian traffic; 7) A statement of the extent and effect of the re-housing of families which may be made necessary from the redevelopment area plan, and the manner in which such re-housing may be accomplished; 8) A statement of the estimated cost of acquisition of the redevelopment area, and of all other costs necessary to prepare the area for redevelopment; 9) A statement of such continuing controls as may be deemed necessary to effectuate the purposes of this act. Part II of this report will provide basic conditions based on information gathering in September 2007 through Centre County Tax assessment data and State College Borough Planning, Zoning and Public Works documents. Under the Urban Redevelopment Act, the definition of Redevelopment Area requires a finding that the area is blighted under (one or more) of the conditions spelled out in Section 2 of the Urban Redevelopment Act. The Planning Commission has to make a determination that the Fairmount District meets the purpose and intent of the Urban Redevelopment Act. The conditions to be evaluated are: a) unsafe, unsanitary, inadequate or over crowded condition of the dwellings in the area; b) inadequate planning of the area, or excessive land coverage by the buildings thereon; c) lack of proper light and air and open space; d) defective design and arrangement of the buildings thereon; e) faulty street or lot layout; or f) economically or socially undesirable land uses.

Page 3 of 33 Part III of this report will also document the presence of the above mentioned blighting factors to warrant the study area s designation as a blighted area in need of redevelopment. II. Summary of Basic Conditions A. General Location The proposed Fairmount Civic Certified Redevelopment Area is an area in the Borough of State College downtown and the Highlands neighborhood. It contains a combination of primarily residential and limited office and retail uses. In general terms, this area is bounded by West Beaver Avenue (Kelly Alley to South Allen Street), South Allen Street (West Beaver Avenue to West Fairmount Avenue), West Fairmount Avenue (South Allen Street to South Fraser Street), West Nittany Avenue (South Allen to South Fraser Street), South Fraser Street (Highland Alley to West Fairmount) and Highland Alley (South Fraser Street to South Allen Street.) B. General Description The proposed Certified Redevelopment Fairmount Civic District contains 34 tax parcels in the downtown/highland Neighborhood section of State College Borough as shown in the Project Boundary Map. The proposed redevelopment area consists of 34 tax parcels as shown in Table 1. This total area of Fairmount Civic District is 13.08 acres. This area does include the public rights-of-way for the streets and alleys of Beaver Avenue, Allen Street, Fairmount Avenue, Nittany Avenue, Fraser Street and Highland Alley, D Alley, Hole Alley, E Alley and Wren Alley within the study area.

Figure 1: Project Boundary Map and Existing Conditions Oct. 25, 2007 PC Agenda Page 4 of 33

Page 5 of 33 C. Current Land Use Current Land uses in the study area were determined from the Centre County Tax assessment office as follows: 1. Residential uses are a mix of 16 older homes and small scale apartment buildings for a total of 3.09 acres. 2. This area also includes many public buildings that are tax exempt for a total acreage of 6.53 acres. 3. A privately-owned property that acts as a civic use is the parcel (Post Office) which is 1.42 acres. 4. The remaining area contains a mix of commercial uses that include a bank, retail and office for a total of 1.56 acres. This area also contains the public right-of-way for the streets and alleys within the study area. D. Downtown Improvement Plan The Downtown Vision and Strategic Plan for the Borough of State College provide guidance in the types of uses and desired changes for the downtown. The overall focus of implementation is a specific sequence of actions or strategies. They include: Improve the public realm of Downtown Encourage owner-occupied housing within the Downtown Identify other modifications and initiatives needed to achieve better overall Downtown environments. The Downtown plan shows Fairmount Civic District within Areas 4 (Pugh and South Allen District), 5 (Civic District) and 9 (Fairmount School District.) In these sections of the document the plan notes the following proposed improvements to this district: Area 4: Pugh and South Allen District The Borough should work toward making the Pugh-South Allen District the community s premiere adult-oriented shopping and leisure destination. Ground floor retail and restaurant development should be expanded along South Allen Street between Beaver Avenue and Foster Avenue. In addition to preserving the architectural character of College Avenue, proposed building lengths along South Allen Street should be determined through specific plans, as well as, architectural drawings and studies. Area 5: Civic District Future land uses within the District should reinforce its destination function. The Borough should encourage the development of additional civic and cultural facilities within the area.

Page 6 of 33 The Borough should encourage the main Post Office to remain within the Downtown. If the Postal Service should vacate the existing downtown Post Office, the site should be considered for moderate density owner-occupied residential condominiums and/or townhomes. Similar to South Allen Street, ground floor retail uses could also be integrated into the architectural design. Area 9: Fairmount School District As part of the State College School District Master Plan, the School Board is exploring the possibility of removing the Fairmount Elementary School from active service. Consequently, there is the potential that the school building will be made available for reuse. The school building could be converted to moderate density residential condominiums. The density of the conversion should be established through density studies at specifications based on the developers architectural design. As part of a residential conversion for the school building, the Borough should require a special site plan approval and should work with the developer to create restrictive covenants that protect the neighborhood. E. Current Zoning The Fairmount Civic District is currently zoned Commercial (C), Commercial Incentive (CID) and Residential-Office District (R-OA.) as shown in Figure 2. Table 2 provides an overview of the development standards for the General Commercial (C) and Commercial Incentive (CID) zoning districts. As you will note, this table does not include a list of permitted uses. In the C and CID zoning districts, all uses are permitted except those specifically called out in the zoning regulations as prohibited uses. In general, the list of prohibited uses is limited to industrial and manufacturing uses.

Figure 2: Current Zoning Oct. 25, 2007 PC Agenda Page 7 of 33

Page 8 of 33 Table 2 Development Standards of C & CID Zoning Districts Zoning District Minimum Lot Area (Square Feet) 1 Family Dwellings- 5,000 Minimum Lot Width Front Setback Side Setback Rear Setback C 2 Family Dwellings- 8,000 25 Feet 15 to18 Feet 0 to 10 Feet 0 to 10 Feet CID C CID Other Uses None All Uses 5,000 Lot Coverage None None CID Incentives (Building) Front Building Setback = 25 feet or more Green Certified Underground Parking 25 Feet Height 45 to 65 Feet 65 to 95 Feet 15 to 25 Feet Open Space No Requirement No Requirement Bonus Increase in Building Height 1 story (not to exceed 10 additional feet) 1 story (not to exceed 10 additional feet) 1 story (not to exceed 10 additional feet) 0 to 10 Feet 0 to 10 Feet Parking Nonresidential 1 space per 800 SF of GFA with 30,000 SF exempt; Residential same as R zoning districts Nonresidential 1 space per 800 SF of GFA with 30,000 SF exempt; Residential same as R zoning districts Bonus Increase in Floor Area Ratio (FAR) for Residential Use Floor Area Ratio for Residential 2.0 to 3.0 depending on location within the zoning district 2.0 for rental; 3.0 with bonuses for owner-occupied housing units Bonus Reduction in Required Parking 20% 10% - 20% Each underground parking space = 1.5 spaces in a surface lot or

Page 9 of 33 above grade structure CID Incentives (Uses) Owner-occupied Street Level Commercial where not required Retail/office (mixed use) Up to 2 stories (not to exceed 20 additional feet) 1 story (not to exceed 10 additional feet) Up to 3 stories (not to exceed 10 additional feet per story) 1.0 30% 20% The CID zoning district was developed in 2004 and 2005 as a method to use a package of development bonuses and incentives to encourage developers to undertake redevelopment projects that incorporated the design characteristics and mix of uses recommended in the Plan. In addition to the use by right incentives, a separate set of criteria were devised for a conditional use permit (the Signature Development Project) that allowed greater development density if more stringent criteria related to design and mix of uses were met. Commercial Incentive zoning replaced the general commercial zoning in several locations in downtown. The Signature Development Conditional Use applied to those areas that are 1) zoned CID and 2) north of Beaver Avenue. Table 3 provides information related to the Residence-Office District (R-OA). This district provides for a mixture of low-density residential and office uses in those areas located between higher density and lower density zoning districts. Samples of uses are listed below: 1 and 2-family dwelling types 3-family dwellings, not to exceed 2 bedrooms per dwelling unit Bed and Breakfast establishments Day Care Center or Home (Child or Adult) Student Home Offices Mixed Use Off-street parking areas Rooming houses

Page 10 of 33 Table 3 Development Standards of R-OA Zoning District Zoning District Minimum Lot Area (Square Feet) Minimum Lot Width (feet) Front Setback Side Setback Rear Setback R-OA 1 Family Dwellings- 5,000 2 Family Dwellings- 8,000 All other uses- 6,000 1 Family Dwellings- 50 2 and 3 Family Dwellings- 75 All other uses- 50 No more than nor less than 10% of the average front setback established by adjacent buildings along the street 6 Feet 20% of the depth of the lot measured from the front building line to the nearest point of the rear lot line, but in no case shall this be less than 15 feet. Surface Parking Lot Coverage Bldg. Lot Coverage Open Space Parking Floor Area Ratio for Residential R-OA 30% 40% 30% 1 and 2 family dwellings 2/unit Multiple dwellings 1.5 to 2 (plus 1 for each bedroom above 2 bedrooms) Office 1 per 300 sq. ft GSA none The zoning in this district would allow for the majority of the uses proposed in the Downtown plan. The one area that would be unclear is the six parcels at the corner of South Allen Street and West Nittany Avenue that are zoned commercial. The Downtown plan suggests residential use within the area. While the zoning does permit residential it also permits other uses that may be more attractive over residential. Expansion of the ROA zoning to these properties may be a worthwhile change to this area by limiting the properties to residential to promote that change as described in the Downtown plan. Other properties could also be redeveloped. Within the zoning designated for that property. The Post Office land is not public land even though the use serves the public. The owner does have a lease arrangement with the Post Office for approximately 12 more years. However, his long term plan is to redevelop the property is in line with the current zoning by maintaining the post office use, providing additional commercial and residential space above the post office. Also within the 220 block of South Allen Street a

Page 11 of 33 proposal has been submitted using the current zoning to provide first floor retail and upper floors of residential units. The Borough has recognized the Fairmount Civic District as a priority and is moving to provide opportunities to redevelop this area. The Borough has already rezoned areas of the Fairmount Civic District from Commercial to Commercial Incentive to increase the intensity of uses. This effort will allow for under utilized parcels (as shown in Figure 3) to be redeveloped, provide new housing, office and retail opportunities, as well as, allow current uses to exist.

Figure 3: Fairmount Civic District Vacant / Under Utilized Land Oct. 25, 2007 PC Agenda Page 12 of 33

Page 13 of 33 Neither the suggested rezoning or the Downtown Vision and Strategic Plan will displace current residents since it is anticipated that redevelopment will provide more housing than the 110 rental units that exist in the Fairmount Civic District. This district will provide opportunities for owner-occupied and renter-occupied units between West Nittany and West Fairmount Avenues which would increase the presence of owneroccupied units adjacent to the single-family residences in this portion of the Highlands Neighborhood. Currently there is one known owner-occupied residence in this portion of the Fairmount Civic District. F. Fairmount Civic District Concept Site Plans The Fairmount Civic District has redevelopment opportunities within its five block area. The Downtown Vision and Strategic Plan provides some concepts for the blocks within the Fairmount Civic District. Appendix A: Concept Site Plan Map will provide a key for the concepts from the downtown plan that include townhomes for the area between West Nittany Avenue and West Fairmount Avenue, possible partial to full conversion of the Fairmount School into residential use and street treatments for South Allen Street. While the Fairmount School is noted as a prime redevelopment opportunity of the structure to residential, it may be of benefit to convert those areas of the building that are under utilized for residential use and maintain the Delta Program space. This would provide a possible opportunity for co-location of live and work arrangement for potential school employees. Developing townhomes provides an alternative to the higher density housing that is projected closer to Beaver Avenue. It is anticipated it will be considerate of the shelter facilities in this area by developing around those services. If the Fairmount School were to be redeveloped the current building could be reused and would maintain the less dense scale at the edge of the downtown. Together the townhomes and the school building would provide the means to provide more density but at a scale that connects and acts as a buffer between the downtown higher density housing and the Highlands neighborhood single-family residential housing. The Downtown plan indicates the 200 block of South Allen Street would benefit from street treatments to improve pedestrian access and continue the treatments proposed for Allen Street toward College Avenue. These proposed improvements are shown in Appendix A. Table 4 provides estimates for future development with in the Fairmount Civic District. It is anticipated that most of the highlighted areas in the Concept Site Plan Map would be redeveloped by consolidating lots and providing underground parking to utilize the space as efficiently as possible while taking advantage of the incentives in the CID zoning district and providing lower density housing options in the R-OA zoning district.

Page 14 of 33 Table 4 Fairmount Civic District Future Development Scenario Summary Address Lot Area 237 S. Fraser St. 220 234 blk S. Allen Street Corner of W. Nittany Ave. and S. Allen Street Block btn W. Nittany Ave. and W. Fairmount Ave 411 S. Fraser St. 1.42 acres 1.1 acres.99 acres 2.81 acres Zoning FAR Notes from Downtown Improvement Plan CID 3 moderate residential density or townhomes CID 3 Ground floor retail and restaurant Residential units* Owner occupied First Floor Commercial / Retail 45 yes Yes 1 40 yes Yes 1 ROA 5 yes NA 1 ROA townhomes 14 yes NA NA 1.05 acres ROA residential reuse 22 yes no no * Owner-occupied units 2,000 square feet. Rental units 1,500 square feet. G. Re-housing Opportunities The Downtown Vision and Strategic Plan has provided initial guidance for the Borough to determine what areas are in need of redevelopment. Neither the rezoning or the Downtown Vision and Strategic Plan rezoning will displace current residents at this time but will provide for replacement housing as well as additional opportunities to provide housing in locations in within the Highlands neighborhood and adjacent to the downtown. Today there is one known owner-occupied home in the Fairmount Civic District, as well as, 111 rental units for a total of 112 housing units. If redevelopment were to occur there is a potential for replacing the existing housing with more owneroccupied housing than rental units as is present today. This could include as many as 143 owner-occupied units if all the properties are redeveloped. The owner-occupied units would complement the owner-occupied single family homes in the Highlands neighborhood. Table 4 provides a summary of what could occur in Fairmount Civic District with the current zoning. State College Borough currently has three homeownership programs as part of the Community Housing Partnership, including the State College Community Land Trust and Housing Transitions, Inc. The Borough's programs include down payment and closing cost assistance and home rehabilitation funds. The State College Community Land Trust offers affordable for-sale homes. Housing Transitions, Inc. offers budget and homebuyer counseling and affordable for-sale homes. State College Borough s program offer affordable for-sale homes and home rehabilitation funds. State College Borough s program accepts applicants making as much as 115% on the area median income, based on household size. The other two programs cap income eligibility at 80% of Area Median Income (AMI), based on household size. This would provide housing assistance for low and middle income persons interested in owner-occupied units in the Fairmount Civic District. Additional Commercial Floors

Page 15 of 33 The low-income first-time homebuyer program is an option when funds are available, as a mortgage subsidy and closing cost assistance (up to $50,000 or not to exceed 45% of the purchase price). This is a zero interest, 30-year forgivable loan that does not have monthly payments. The loan is forgiven at 3.33% annually. The subsidy must be paid back when you sell the home or the home is no longer your primary residence. Also, in exchange for the assistance, you agree to a shared equity formula, which typically has limited appreciation on a graduated scale based on the number of years of ownership. You would need a minimum of 3% as down payment. The middle-income first-time homebuyer program is an option when funds are available, the mortgage subsidy and closing cost assistance (up to $45,000 or not to exceed 22% of the purchase price). This is a zero interest, 30-year loan that does not have monthly payments. Instead, the full subsidy must be paid back when you sell the home or the home is no longer your primary residence. Also, in exchange for the assistance, you agree to a shared equity formula, which typically has limited appreciation on a graduated scale based on the number of years of ownership. You would need a minimum of 3% as down payment. Options that could be considered to address the potential affordable housing needs not met include: Inclusionary zoning where a percentage of all residential units are marketed to individuals and families making 60% of less of AMI. A ten percent set aside is a fairly common number under this type zoning technique. Create a housing development fund where a developer may be a fee in lieu of providing the housing set aside. Funds generated by the fee would be used by a nonprofit housing corporation or the Borough to provide affordable housing. Create an employer assisted housing program where the employer provides either down payment and closing cost assistance to employees or rental assistance to employees. Such programs could be administered by a nonprofit housing corporation, the Borough or other agency (e.g., the County Housing Authority.) In addition to these types of mandatory programs, the public/private partnerships could be established to pursue funding from other state and federal agencies to expand the resources available for affordable housing in the Centre Region. H. Building Conditions The buildings in the Fairmount Civic District are older and do not provide the opportunities for improved pedestrian access, underground parking and first floor nonresidential uses that are desirable as described in "The Downtown Vision and Strategic Plan" and the CID zoning district. The remaining area of the Fairmount Civic District is composed of older rental properties. Nineteen of these properties are contributing buildings in the Holmes-Foster / Highlands Historic District. The majority of those homes are renter-occupied homes. While these homes have constructing qualities they do suffer from the effects of maintaining multiple units in one building. This includes items such as fire escapes and

Page 16 of 33 secure doors that would not be typically seen on historic owner-occupied homes and do detract from the qualities of the original house form. Having multiple units also requires additional parking for the residents which does not always provide a clear view of the contributing structure. Right of Way I. Rights-of-Way and Sidewalk and Curbs and Infrastructure As previously stated the public-rights-of-way includes avenues, streets and alleys. This includes sidewalks and curbs that are generally in good condition throughout the proposed redevelopment area. Sidewalks are limited to the streets and avenues except for a small portion on the north side of Highland Alley. These alleys serve many of the older homes and small scale rental properties that students use as housing. The Department of Public Works in an effort to improve the downtown proposes to complete in 2008 a Master Streetscape Plan for the downtown. The streetscape plan will include recommendations for various sidewalk materials, street light poles, street furniture, signage, etc. Once complete, the plan will be used for future improvements and developments. For 2010, funding is proposed for a new downtown vision and strategic plan. The present plan is nearly 10 years old and should be updated. This strategic plan will build upon the master landscape plan and overall land use plans for the Borough that are being prepared through the State College Land Area Plan process. The Borough regularly inspects sidewalk so conditions for replacement. Widening of sidewalk is limited due to the location of building and limited right-of-way. However, sidewalks need to accommodate all users such as the minimum standard of three feet to comply with the American with Disabilities Act. The borough meets this standard when ever the right of way permits this width. Sidewalks can also be widened in higher use areas which when opportunities present themselves through development or road reconstruction. It is anticipated the best opportunity for additional pedestrian amenities is when a lot is redeveloped. It may be beneficial to construct sidewalk along the alleys that travel in the north-south direction to facilitate walking to and from campus. Redevelopment of properties in the CID District might include the construction of sidewalk along D Alley and Highland Alley The roadway pavement is also considered in good condition for roadways. There is minor alligator cracking within the alleys. Sanitary Sewer and Water Infrastructure Infrastructure including sanitary sewer and water lines would need to be reviewed as development occurs. It is not anticipated the proposed sanitary sewer and water lines would support this development. The Borough has recognized a need to review the sanitary sewer capacity in this area for upgrades. The borough waster authority estimates new water lines would be required be replacing the existing four and six inch water lines with eight inch line in the locations shown below: S Fraser Street - Nittany Ave to Fairmount Ave (approx. 380') S Allen Street - Foster Ave to Fairmount Ave (Approx. 750')

Page 17 of 33 An estimated cost would be around $275,000. It is anticipated that the cost would be absorbed as development occurs. J. Land and Building Values The Centre County tax assessment values indicate that the Fairmount Civic District land values range from $102,142.86 per acre $ 1,200,785.71 to per acre. Building values range from $123,628.57 per acre to $ 5,692,380.95 per acre. The breakdown of the study area assessed valuation by land is $3,158,635.00 and building is $7,893,060.00. The total assessed value of the study area land and buildings is $11,051,695.00. K. Assessed Valuation Table 5 shows the top five in Fairmount Civic District with the highest assessed value are shown below. Table 5 Assessed Value Estimated Market Value Tax Id Number Address (CLR = 29.3% ) 36-013-,308-,0000-121 W. Fairmount Avenue $673,920 $2,300,068 36-013-,294A,0000-237 S Fraser Street $1,080,110 $3,686,382 Corner of S. Fraser Street and $3,823,891 36-013-,294-,0000- W. Nittany Avenue $1,120,400 36-013-,161-,0000-248 S Allen Street $1,184,100 $4,041,297 36-013-,297-,0000-411 S Fraser Street $3,194,500 $10,902,730 The total estimated market value for the Fairmount Civic District is $ 37,719,096. The tax exempt properties in this area are shown in Table 6 below. Table 6 Tax Id Number Address 36-012-,075-,0000-118 West Beaver Avenue 36-013-,158-,0000-234 South Allen Street 36-013-,159-,0000-236 South Allen Street 36-013-,294-,0000- Corner of South Fraser Street and Nittany Avenue 36-013-,297-,0000-411 South Fraser Street 36-013-,294B,0000- Central Parklet L. Controls to Redevelop Fairmount Civic District The Boroughs efforts to create the CID and rezone additional sections of the downtown is one way to encourage growth opportunities that provide first floor nonresidential uses, encourage underground parking and taller building heights to provide additional useful square footage in the downtown. It is anticipated that focusing on the downtown

Page 18 of 33 Fairmount Civic District will reduce some of the pressures to develop in the neighboring single-family residential neighborhoods, In addition to the proposed zoning changes additional changes need to be made in order to provide for affordable housing as part of the development. This could be in the form of an incentive tied to increased density when affordable units are provided. These units could provide another option to those first-time homeowners seeking housing in the Borough. More work will need to be done in order to determine what density would make it attractive for the builder to provide that type of housing. Since State College Borough is a college town that houses 27,314 (based on 2000 Census students it is important the proper tools are put in place to encourage changes that foster owner-occupied housing redevelopment and that housing is able to maintain its owner-occupied status. In order to maintain owner-occupied residences covenants will be required for these types of units. This will run with the land and be attached to the land. If the owner fails to abide by the covenants, the Borough will be empowered to remove occupancy permits of the building to obtain injunctive relief. These covenants will be required to be recorded with the Centre County Recorder of Deeds and referenced on the development plan. This tool will be implemented prior to occupancy of the building and shall specify that the land owner will comply with all approval conditions applicable to the incentive and bonus provisions under which the land development plan was approved. Another form of control would be the Borough acquiring properties for redevelopment. Redevelopment could be undertaken through the State College Redevelopment Authority singly or in partnership with for profit or nonprofit entities. The Borough has a history of acquiring land to facilitate the completion of projects. III. Fairmount Civic District Blighting Conditions Under the Urban Redevelopment Act, the definition of Redevelopment Area requires a finding that the area is blighted under (one or more) of the conditions spelled out in Section 2 of the Urban Redevelopment Act. The conditions to be evaluated are: defective arrangement of buildings, inadequate pedestrian access and economically and socially undesirable land uses. Defective arrangement of buildings The arrangement of buildings in this area has followed the patterns developed when the Borough was just beginning as a community. As the community has grown the building use has accommodated the changing population but it has not provided for additional use due to the limits of each structure. The close proximity of the downtown makes it a prime location for denser uses that have yet to occur. Since many of the buildings that are over 50 years old and do not take full advantage of the lot. Redeveloping properties would also provide opportunities for lot consolidation. Six of the parcels in the area zoned ROA would not meet the minimum lot requirements for 3 family dwellings are described in the Downtown Plan.

Page 19 of 33 The multiple alleys in this area makes lot consolidation challenging, however alleys could be come logical connections within the developments or could provide additional building space if vacated. This would increase the potential number of units that could be built and improve the circulation patterns for residents of the area by consolidating driveways along alleys and perhaps reducing the number of parking spaces directly adjacent to alleys so to provide better direction for residents and visitors where points of access are located for the consolidated parcels to parcels. In addition to the under utilized land area, there is under utilized air space in close proximity to the downtown. The majority of the buildings in this area are one and two story structures. However, zoning and potential zoning changes to develop the Fairmount Civic District with the guidance provided in the Downtown Plan would allow for buildings that could be 65 feet in the C District, feet in the CID and 35 feet in the ROA District. Providing this development here could reduce the pressure in the neighboring Highlands for redevelopment of additional older homes and other smaller scaled properties and maintaining the character of majority of the Highland neighborhood. Inadequate pedestrian access Pedestrians are limited to the roadways such as South Fraser Street and South Allen Street for sidewalks. The alleys do not consistently provide pedestrian or bicycle access due to their use for service vehicles making it extremely difficult to accommodate both. As new development and intensity of uses increases alleys will provide an opportunity to expand the sidewalk network to make connections from new access points along alleys to the more traditional sidewalk network. Sections of sidewalk in a preliminary review have been identified as needing additional width to accommodate the current users. The Borough inspects sidewalks every other year in the downtown. In addition to these inspections the Public works Department as part of the 2008-2012 CIP request has a plan to develop a Master Streetscape Plan for the downtown. This plan would look in greater detail at conditions of the downtown for pedestrian use including lighting and other amenities. After review of problem areas, a list of prioritized will occur over time. It is anticipated that the northern section of the Fairmount Civic District would be included in Master Streetscape plan. As rezoning and redevelopment occur to provide more uses and at a greater intensity, it is anticipated there will be greater demand on the sidewalk network. It will be desirable to not only maintain the current network but use rely on the zoning district requirements tools to expand upon the pedestrian network, Currently the C and CID do have sidewalk provisions however the only way these can be implement is where redevelopment occurs. Economically and socially undesirable land uses This condition exists related to three matters in State College Borough. The long term health of the borough through taxes collected, declining family households and increasing student households, as well as, declining returns for property owners due to the lack of increased leasable commercial space as well as other investment opportunities to maintain the Borough as a healthy and economically diverse community.

Page 20 of 33 Tax Collection One of the economic needs for the Borough is tax collections will need to increase in the Borough. Due to changes in how taxes are collected and limiting taxes that can be collected will reduce collections. This begins with the Borough having limitations on what taxes it can collect. The limitations are due to a number of factors. First a number of taxes are not collected. Taxes available to the Borough under the existing state enabling legislation include occupation, per capita, amusement and mechanical devices taxes. These taxes have limited application due to difficulties with providing adequate revenue, fairness, economy of collection and these taxes are not utilized by the Borough. Other taxes have been suggested but are not authorized by the state enabling legislation or the Borough s Home Rule charter. The Borough is limited to collecting earned income, real estate, emergency and municipal services and real estate transfer tax. In addition to taxes imposed relief is also provided to owner-occupied residential properties through the Homestead Exclusion and therefore shifting the greater share of the real estate tax to commercial property owners. There is concern regarding tax revenue received by the Borough is adequate to meet the borough future financial needs. The Borough has the lowest median family and household income when compared to the townships that surround it as stated the Report of the Ad Hoc Study Committee. This report was a review of the current tax and revenue structure, as well as, an analysis of alterative tax strategies that could be implemented in the Borough. This report also notes the decline in the number of families and the increase in the number of one person households. In 1970 families comprised of 55.8 percent of the Borough households. In 2000 this percentage had dropped by 27.4 percent. Meanwhile during that same time period the percentage of families has increased in all of the surrounding townships. The demand for renter-occupied apartment has increased. This is supported by the new construction of apartments and condominiums in the Borough s downtown. These units are being built on land that typically holds an older structure that does not utilize the maximum opportunities of the lot. Therefore the older structure is torn down for a larger building in height and square footage that accommodates renters. The total number of renter-occupied units from the 2000 Census is 9,288 units. While the total owner-occupied housing units is 2,736. Both numbers have changed since that time. Based on zoning permit and rental housing records 34 single family homes have been constructed and 157 apartment and townhouse units have been constructed since 2000. Therefore as the number of renters increase it is anticipated the median family and household income will continue to decline. The renter-occupied housing is a percentage of middle income households ($25,000 $75,000) that are renter-occupied households. The population found in this income was found to be 2,568 out of 3,799. This suggests that there are middle income households interested in living in the borough but may have chosen to rent in order to live within the borough. Suggesting owner-occupied opportunities for middle income households are limited for these households. Although census data suggests that there is an increase in the 45 to 54 age group and decreases in the 18-24 and 55-64 there is an expectation that these populations will grow. This is due to the new high density apartment buildings constructed in the downtown and the anticipated aging of the baby-boomer population. This could affect

Page 21 of 33 the Borough s taxes. As the population ages income will be come passive under the taxes levied in the borough and will not be taxed. The younger population will not have the income to replace the taxes lost to an aging population. Resulting in more smaller tax receipts and limited larger tax receipts as the workforce changes in the borough. Due to the repeal of the business tax and the use of the homestead exclusion act, this has shifted the taxes to commercial property owners. In some cases there has been a significant increase in the tax level on a commercial business. Business will perhaps grow concerned with this new method of assessing taxes and find it to be deterrent to do business in the Borough. The Penn State population is not anticipated to increase significantly and owners of older buildings may find it difficult to have adequate renters to occupy the building due the new buildings and their more modern amenities. This will result in under utilized buildings due with high vacancy rates. Empty units are not good for business or for the community since there will be less people in the building for revenue and tax collection, as well as, the possibility of vandalism as the units become vacated and less people use those buildings as their home. It will be desirable for the Borough to provide opportunities through zoning and the Redevelopment Authority to redevelop these properties as they become obsolete. Demographic and Occupancy Patterns Using 2000 information the number of students in the region is 34,765. At this time the Borough had the largest population of college students with 27,314 comprising 71.1 percent of the student population. The number of owner-occupied housing units was the lowest in the borough. As new housing developments have been built the majority have been student housing increasing the disparity of renter to owner-occupied units. Providing means to provide housing opportunities for those how wish to own will provide a better balance of yearround residents with student residents. Encouraging into residents to use the businesses that are located in the downtown year round. This has the positive impact of year round activity around the student housing. Providing for owner-occupied housing can assist in reversing the trend the declining number of family households in the borough. In 1990 there were 3,559 in 2000 there were 3,303. This decline in house holds has been a trend since the 1970 s. As the family house hold has decline the non family and 1 person hold holds have increased significantly from 3,494 (non-family) and 1 person household (7,737) to 4,034 and 8,721 respective in 2000. Generating and increase of 149.6 percent for non-family holds and a132.2 percent change in 1 person households. Today there are 9,535 rental housing permits on record for the Borough. According to the 2000 US Census there were 9,281 renter-occupied units. Showing there has been growth in the number of rental units. The number of owner-occupied units was 2,743 in 2000. According to building permit records and additional 34 single family units have been built and an additional 154 apartment units have been built. This trend of loss for family house holds is a difficult one to tackle because there are many reasons why families relocated out of the borough. Reasons that we do not

Page 22 of 33 necessarily know since the Census data just documents the loss not the reason for the move. In addition to the loss of families the family size has decreased, reducing the number per house hold that lives in the borough. In 1970 3.19 per family down to 2.679 per family in 2000 Using 2000 Census records the Fairmount District is located in Census tract 125 and 126. According to the Census there are a total of 3,060 housing units (86 vacant, 214 owner-occupied 2760 renter-occupied. This illustrates this area has a less than one percent of the housing is owner-occupied in this area. Suggesting that a increasing the number of owner-occupied units in the area based on the development scenarios would not have a significant impact on the areas. However, it would provide opportunity for those who want to live in town and do not want a single family home to manage. The current conditions suggest nothing has changed in this area. Since there housing units and one known owner-occupied home. The US Census also indicated there are units within these Census tracts that are substandard. Lack of complete plumbing facilities was noted in 13 units and 51 units are noted to lack complete kitchen facilities in the renter-occupied units. Property Owner Return As previously noted the current tax collection system has shifted more burden to the non-residential property owners. It is anticipated that this will continue over time if the increased leasable space does not change. Redeveloping properties include increased commercial space can provide additional opportunities for property owners and perhaps over time lessen the tax burden on property owners. This would not only benefit the Borough but the Centre Region as well. The Centre Region Planning Agency (CRPA) has noted that there are 505 acres of commercially zoned land in the Centre Region. This land can accommodate approximately 6.6 million square feet of commercial space. CRPA staff estimated at that time that it would take approximately 12 years to absorb all of this potential development. Based on this analysis, no additional land should be zoned commercial until about 2015+. Of these 505 acres of vacant commercial land in the Region, only 8 (1.5%) are located in State College Borough. Overall, the 2002 Vacant Land Inventory revealed that there were only 44 vacant acres in the Borough for all zoning designations. If the Borough is to participate in development of additional commercial land uses, it needs to provide additional opportunities for commercial development. The Borough believes it is prudent to do this by increasing density in downtown and by pursuing redevelopment opportunities for under utilized shopping centers. Since the actual development result for the Fairmount District could vary the impact analysis and the range of potential outcomes is large and our analysis will be based on a set of assumptions that tend toward worst case. The following table provides an assessment of potential employment in 3 categories, retail, restaurant, and office. These allocations are based on the assumption that retail and restaurant prefer 1st or 2nd floor space and that upper floors are more acceptable to office uses.

Page 23 of 33 EMPLOYMENT CATEGORY TOTAL SQ FT PER CATEGORY EMPLOYEES PER 1000 SQ FT TOTAL EMPLOYEES MEDIAN HOURLY WAGE for 2006 ANNUAL INCOME FROM WAGES (40 HR WORK WEEK) 30% HOUSING COST (ANNUAL) 30% HOUSING COST PER MONTH RETAIL (SQ FT) RESTAURANT (SQ FT) OFFICE (SQ FT) 52500 4 210 $8.70 $18,096.00 $5,428.80 $452.40 53500 4 210 $6.83 $14,206.40 $4,261.92 $355.16 105000 5 525 $17.42 $36,233.60 $10,870.08 $905.84 The potential number of employees per 1000 square feet of GFA is based on several sources, including US Census data for State College, the International Council of Shopping Centers, PA Dept of Labor and Industry data on wages by occupation for the State College MSA, data on square footage for non-residential uses compiled by the CRPA, and US Dept of Housing and Urban Development standards on acceptable housing cost burden and fair market rents. These income data were then compared with the most recent Fair Market Rents as a measure of the affordable housing impact. Fair market rents are based on rents in the State College Metropolitan Statistical Area, which includes all of Centre County. FAIR MARKET RENTS 2006 MONTHLY RENT EFFICIENCY $565.00 1 BD RM $630.00 2 BD RM $742.00 3 BD RM $887.00 4 BD RM $914.00 Just looking at these numbers would lead to the conclusion that no one employed in the lower skill retail and hospitality jobs will be able to live in Centre County let alone in State College. However, the Downtown State College Improvement District estimates that as much as 70% of the labor force in the retail and hospitality sectors is comprised on Penn State students. We recognize that high housing costs around campus does affect the housing choices of university students. But, this component of the local labor force does not rely exclusively on wages earned while in State College to pay housing costs. In addition, unrelated students are ineligible the housing assistance programs that we are aware of. Bottom line, addressing housing cost issues for the university student population is beyond the scope of this paper. Turning from the issue of student housing costs, the housing cost issue remains to be considered for the 400+ retail/restaurant and 525 office jobs that could be filled by nonstudents. If we assume one person households, the office workers fall slightly above the 80% Area Median Income ($34,550) while the other occupation categories fall between 30% and 50% AMI ($12,950 and $21,600, respectively). Our experience with First Time

Page 24 of 33 Homebuyers programs has demonstrated that individuals falling in the 80% of AMI can successfully purchase and maintain homes through such programs. Households that have incomes below 60% ($25,920) of AMI generally are not qualified to participate in these types of programs. Borough staff believes that it is appropriate to expand the opportunities for commercial development in downtown. It is important to open a dialogue with private developers to begin to address the potential demand for work force housing that could be generated by redevelopment in the affected section of downtown. Overall, it is staff s assessment that this course of action is in keeping with the Centre Region Comprehensive Plan. Conclusion On the basis of the information provided and review of the blighting conditions in the Fairmount Civic District Redevelopment Area, the State College Borough Planning Department concludes that the area contains blighting conditions that warrant its certification as an area in need of redevelopment. These blighting conditions are: inadequate planning and defective arrangement of buildings, inadequate pedestrian access and economically and socially undesirable land uses.

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Page 26 of 33 Table 1 Tax Parcels for Fairmount Civic District Tax Id Number Street Address Centre County Property Types 36-012-,074-,0000-36-012-,075-,0000- Assed Value Real Estate Registry Map 122 W BEAVER AVENUE CH $84,055.00 Sheet 15 118 W BEAVER AVENUE CX $70,145.00 Sheet 15 C ALLEN STREET/BEAVER AV CC $410,750.00 Sheet 15 36-012-,076-,0000-214 W ALLEN 36-012-,077-,0000- STREET CC $228,590.00 Sheet 15 220 S ALLEN 36-013-,155-,0000- STREET CB $175,830.00 Sheet 15 224 S ALLEN 36-013-,156-,0000- STREET C $313,580.00 Sheet 15 228 S ALLEN 36-013-,157-,0000- STREET CC $277,920.00 Sheet 15 234 S ALLEN 36-013-,158-,0000- STREET CX $73,500.00 Sheet 15 236 S ALLEN 36-013-,159-,0000- STREET CX $131,250.00 Sheet 15 248 S ALLEN $1,184,100.0 36-013-,161-,0000- STREET CU 0 Sheet 15 328 S ALLEN 36-013-,288-,0000- STREET CC $105,600.00 Sheet 25 111 W NITTANY 36-013-,288A,0000- AVENUE CC $89,090.00 Sheet 25 322 S ALLEN 36-013-,289-,0000- STREET CA $80,640.00 Sheet 25 316 S ALLEN 36-013-,290-,0000- STREET CA $114,505.00 Sheet 25 C FRASER $1,120,400.0 36-013-,294-,0000- STREET/NITTANY CX 0 Sheet 25 237 S FRASER $1,080,110.0 36-013-,294A,0000- STREET CO 0 Sheet 15 36-013-,294B,0000- CENTRAL PARKLET LX $50,050.00 Sheet 15 123 W NITTANY 36-013-,295-,0000- AVENUE CA $120,550.00 Sheet 25 117 W NITTANY 36-013-,296-,0000- AVENUE RA $54,155.00 Sheet 25 411 S FRASER $3,194,500.0 36-013-,297-,0000- STREET CX 0 Sheet 25 140 W NITTANY 36-013-,298-,0000- AVENUE CC $366,215.00 Sheet 25 130 W NITTANY 36-013-,299-,0000- AVENUE CA $117,000.00 Sheet 25 126 W NITTANY 36-013-,300-,0000- AVENUE C $87,475.00 Sheet 25

Page 27 of 33 36-013-,301-,0000-36-013-,302-,0000-36-013-,303-,0000-36-013-,304-,0000-36-013-,305-,0000-36-013-,306-,0000-36-013-,308-,0000-36-013-,309-,0000-36-013-,311-,0000-36-013-,312-,0000-36-013-,314-,0000-122 W NITTANY AVENUE R $63,145.00 Sheet 25 118 W NITTANY AVENUE CA $92,510.00 Sheet 25 149 W FAIRMOUNT AVENUE R $54,095.00 Sheet 25 143 W FAIRMOUNT AVENUE C $47,170.00 Sheet 25 139 W FAIRMOUNT AVENUE R $48,315.00 Sheet 25 131 W FAIRMOUNT AVENUE CA $84,690.00 Sheet 25 121 W FAIRMOUNT AVENUE CA $673,920.00 Sheet 25 400 S ALLEN STREET CA $128,735.00 Sheet 25 412 S ALLEN STREET RA $61,815.00 Sheet 25 416 S ALLEN STREET RA $71,855.00 Sheet 25 426 S ALLEN STREET CC $195,435.00 Sheet 25

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Appendix A Oct. 25, 2007 PC Agenda Page 29 of 33

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