Schell building (1000 market street, Harrisburg PA) Redevelopment opportunity

Christian Sgrignoli 2.15.18

The building is in foreclosure and current market price is approximately 120k with land of $40k and
the building allocated at $70k. Simply – this is an undervalued asset with 28,000 sq ft that could use
first floor of office space or apartments and other two floors of residential loft space. It is currently
zoned under office use. Although a small sample size, the few millennial acquaintances ive explained
the potential use for loft apartments and shown have all said they would love to live in such a building.
It has a cool industrial feel with high windows. Such lofts have a premium, and you are seeing many
pop up in cities like new york. My idea is a multi-pronged approach to use a LP or LLP and use a non-
profit as the general partner – which I think will allow us to reap much more grant dollars by allocating
some of the first floorspace and hopefully basement for community assistance activities etc.

Problems: The main problems I am having is understanding what the renovation costs would be as I
lack the experience and knowledge of redeveloping such a project. The other is any political & zoning
network and experience in executing such a project. I am curious
how many units could fit in the building – with the design I have
in mind can be best described by this picture shown to the right.
This design, with open space but leveraging vertical space would
allow for more units to be built. The last is that it is in a flood zone
– although there are large parties that maybe solving this problem
shortly which I discuss in “catalysts”. Lastly is what power
brokers & finance/development agencies to talk to – PA
department of community and econ development, Harrisburg
redevelopment authority, harrisburg department of community
economic development, PA housing and finance. In fact, the last
purchase of the building in 2007, the PHFA provided a $1.3mm
loan.

Catalyst: There are some substantial catalyst in redeveloping the

building at this current moment. While this small section of
harrisburg between downtown and allison hill has been dubbed the
“quiet area” as much real estate has not been utilized, 1. the old
Patriot news building has just been bought. 2. A potentially much larger catalyst is detailed in a plan by
penndot to develop the market street area http://www.planthekeystone.com/Harrisburg.html. If this
Penndot plan is executed, the market value would go up substantially for the building, and the
entire”quiet area” will change into a bustling area with much beautification, parking, and even solve
the flooding issue. 3. Local econ revitalization tax assistance law Lerta tax break- offering 50-100% tax
breaks for improvements or new construction of properties for the decade.

Conclusion and misconception of value: The general consensus I get is that this area is known as a
ghetto – as its run down and homeless people were often found in this building, especially as it sits so
close to allison hill. The FACT is that Cameron street separates this building from allison hill and many
of the problems that plague property values. You can almost feel the gloom once you go under the
bridge by the bus station, but if beautification occurred, and as more buildings are redeveloped which is
currently underway with the old patriot news building, then its true value will be discovered -
especially as it sits a 5min walk from downtown, 3 minute walk to the train station, and proximity to
major roads and is surprisingly close to the ABC brewing company.
A view of the buiding when it was in its prime: