At their regular meeting on Monday, November 2nd, Chambersburg Town Council endorsed the sale of the remainder of the Southgate Shopping Center to Inch and Co. of York, Pennsylvania.
The project conceived and proposed by Inch and Co., would bring six market rate apartment buildings to the site, demolish the former Big Lots department store, preserve the existing retail at the location, and end the six year long project where Chambersburg Borough and the Chambersburg Area Municipal Authority (CAMA) bought a code deficient rundown local shopping center in downtown Chambersburg to turn it around as a catalyst for redevelopment.
The deal has rules and covenants including a prohibition on subsidized housing, certain types of retail, such as adult oriented businesses or smoke shops, and no data centers.
To be constructed in three phases over the upcoming three years, the first phase should begin as early as January or February 2027, as Joe Eisenhauer, VP of Development, Inch & Co., explained to Town Council.
Last week, the Southgate Neighborhood Advisory Committee and the Chambersburg Area Municipal Authority, who owns the shopping center, met and formally endorsed the development plan.
Much of Monday’s Council presentation focused on the history of the project including comments about the land seizures decades ago that led to the shopping center’s construction, Chambersburg’s move to use federal COVID money from the American Rescue Plan Act to acquire the facility from Paran Management, and the planning process that identified a new mixed-use neighborhood of stores, healthcare, parks and homes for this location.
No local tax money was ever used to buy or operate the shopping center. Only state and federal grants and the revenue from store rents paid the full cost of buying and managing the facility.
A portion of the land was carved off for Keystone Health to build their new community healthcare building which opened last year. Much of the original land will be retained by the Borough for two new parks, a community plaza and a new street. The sale of the balance is about 69% of the original purchase. The purchase price is $1.45 million to be paid in installments, including interest to CAMA over the next decade. The purchase price may turn out to be more. An upcoming designation as a Federal Opportunity Zone may provide the developer with additional savings and the agreement calls for splitting that tax savings with CAMA.
The developer also plans to demolish the old JCPenney store, most recently a Big Lots, at their own expense. A recent grant for that demolition will be reprogrammed with the cooperation of the State for another use in the area.
There is no money to repay for the purchase and operations of the shopping center, so all the money earned is found money for the Borough and CAMA. The Borough and CAMA can now use this new money as a economic development revolving loan account to address other needs in the community.
The next step, according to Mr Eisenhauer, is the formal submission of a land development plan for Borough approval.
An economic impact study prepared for the Borough indicated a combined recurring fiscal and utility impact of $421,720 annually ($151,720 in estimated Borough EIT and occupation tax revenue plus $270,000 in estimated gross utility sales) as a result of the development project.
Council President Bill Everly is available for comments at beverly@chambersburgpa.gov.
