NEWS INFORMATION FROM

THE OFFICE OF MAYOR STEPHEN R. REED
City of Harrisburg
King City Government Center
Harrisburg, PA 17101-1678
Telephone: 717.255.3040

FOR IMMEDIATE USE
10 September 2003

$37.7 MILLION HOUSING PROJECT WORK BEGINS AT FORMER MACLAY STREET APARTMENTS

Harrisburg, PA—Mayor Stephen R. Reed today announced that construction will soon be underway on one of the largest residential housing projects ever conducted in Harrisburg, with the $37.7 million rehabilitation of the Maclay Street Apartments set to begin within the next month. The major Uptown housing renewal effort involves the construction of 71 new owner-occupied homes and the restoration of an additional 222 rental units, creating a total 293 new or restored housing units.

Reed said the project involves the complete makeover of the Maclay Street Apartments, which presently consist of two and three-story garden-style apartments and townhouses. The project will also involve the demolition of existing blighted structures in the roughly four-square block project area, with new, owner-occupied construction slated for both the newly-cleared as well as existing vacant lots.

The Mayor said the project will allow all existing residents, who currently occupy only 140 units, to remain at the complex by utilizing vacant units, phasing construction and by providing income-based rental assistance. Existing tenants will have the option of either securing a Section 8 housing voucher to move to other subsidized housing in the city or anywhere in the country, or being temporarily relocated to other nearby housing while work is underway. Some existing tenants may even be eligible for various homeownership grant programs offered by the city, state and federal governments, allowing them to purchase one of the newly constructed homes slated for owner-occupancy.

The Maclay Street Apartments has 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 have been the case, it almost certainly would have resulted in a repeat scenario that would have brought future blight,” said Reed, “which is why we intervened.”

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

The Mayor said the project involves more than $3.7 million in private developer equity and construction loans, with an additional $6.8 million in Low Income Housing Tax Credits awarded to the project by the Pennsylvania Housing Finance Agency (PHFA). PHFA has also earmarked another $2.353 million from their Homeownership Choice Program, which will help to substantially lower the costs of the 71 new owner-occupied homes being built.

An additional federal grant in the amount of $11.08 million is being sought from HUD towards the project, and the City is providing $975,000 towards the new home construction, as well as providing most of the in-house demolition activity necessary for the project.

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

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