Mayor OKs Verizon Workout
Harrisburg Mayor Eric Papenfuse last month signed off on an agreement to help the city avoid default on a $41.6 million bond tied to the so-called Verizon Tower—but did so reluctantly.
In 770-word open letter, Papenfuse blasted aspects of the deal with Assured Guaranty Municipal Corp. (AGM), attacking the amount of the city’s obligations under the agreement and saying that the state had pressured him to sign off on it.
However, not agreeing to the deal, which was approved by City Council in late January, would have been worse, he said.
The deal is the culmination of two years of negotiations to resolve an outstanding debt burden from a city-backed borrowing in 1998.
That year, the city sold three office towers in Strawberry Square to the Harrisburg Redevelopment Authority, guaranteeing the bonds issued to finance the $24 million purchase.
One of the buildings, constituting about $7 million of the original debt, was secured by rent from Verizon, the primary tenant. However, no payments would have to be made on that bond until 2016, at which time the $7 million debt would balloon to $41.6 million. Furthermore, Verizon was set to depart the building in 2016.
Beyond tenant payments, the only security for the bonds was city tax revenues, meaning that the empty office building would leave Harrisburg on the hook for the full principal and interest on the original debt, totaling $41.6 million.
In September, the state Department of General Services agreed to a 17-year lease that will pay off a portion of the city’s obligation each year, for a total of around $11 million through 2033.
The settlement agreement the mayor signed off on helped clear the way for a $16 million retrofit of the building, which the state required as a condition of its lease.
City Fights Gun Suits
Harrisburg went to court last month to fight two lawsuits challenging the city’s gun control laws.
The city filed three motions in the Court of Common Pleas to battle two lawsuits filed in January by the McShane Law Firm. The motions seek to delay the lawsuits and disqualify McShane from the suit.
Those lawsuits were prompted by a recent state law passed last year that grants gun-rights membership groups standing to sue local governments over their firearms regulations.
As a result, many cities and towns have repealed their gun ordinances. Several others, however, including Philadelphia, Pittsburgh, Lancaster and Harrisburg, have decided to fight back.
Harrisburg also established a “Protect Harrisburg” legal defense fund to help the city cope with the expense of the lawsuits. To contribute, visit www.harrisburgpa.gov/protectharrisburg.
Gaming Money Awarded
Dauphin County commissioners last month doled out $6.4 million in annual gaming grants for projects throughout the county.
Locally, grants included:
- Harrisburg, $200,000 for four K9 patrol vehicles
- Humane Society of Harrisburg Area, $120,000 for facility improvements
- Swatara Township, $309,000 for a fire engine and other projects
- Steelton, $70,866 for fire station repairs and to retire fire engine debt
- Susquehanna Township, $202,000 for a pedestrian safety project and Vietnam Veterans memorial
- Dauphin County Library System, $75,000 for HVAC improvements
- Susquehanna Art Museum, $70,000 for a museum facility project
- Gamut Theatre, $50,000 for renovation of its new facility (match required)
- PA National Fire Museum, $50,000 for property acquisition
- Camp Curtin YMCA, $75,000 for property improvements and sinkhole repair
- Harrisburg River Rescue, $45,216 for facility improvements
- Boys & Girls Club, $80,000 for facility expansion (match required)
- Harrisburg Young Professionals, $75,000 for Market Square improvement project (match required)
- Jewish Federation of Greater Harrisburg, $50,000 for security improvements
The grants originate from revenue generated by Hollywood Casino slot machines.
Mulder Square Proposed
Harrisburg has applied for a state grant to help revitalize a large swath of Allison Hill, an area the city is calling “Mulder Square.”
The Papenfuse administration last month submitted an application for a Redevelopment Assistance Capital Program grant totaling $6.5 million. If received, the money would pay for a wide variety of projects, such as streetscape improvements, blight removal and redevelopment, said the city.
The term “Mulder” was developed by combining Mulberry and Derry, two of the principal streets in the targeted area.
Uber Launches in Harrisburg
Got a car? Then you might be able to go into business for yourself, as the Uber ride-sharing service launched last month in Harrisburg.
Company General Manager Jennifer Krusius joined Mayor Eric Papenfuse to announce the arrival of Uber, which uses a smartphone application to link drivers and riders.
The cost to use the service is a $2 base fare, then $1.75 per mile and 25 cents per minute.
Harrisburg is at the center of the area’s Uber territory, which runs west-to-east in a peanut-shaped design that goes from the western Carlisle suburbs in Cumberland County to Palmyra in Lebanon County.
Besides Harrisburg, the territory includes such places as Mechanicsburg, Camp Hill, Linglestown, Hummelstown and Hershey.
HUD Hearings Set
Harrisburg will hold three hearings this month to get public input to help develop a plan for the annual distribution of federal housing funds.
The first will take place March 5 at 5:30 p.m. at Harrisburg school district headquarters, 1601 State St. The second will be held on March 12 at 5:30 p.m. at the Heinz-Menaker Senior Center, 1824 N. 4th St., and the third will be on March 19 at 11:30 a.m. at HACC Midtown 2, 1500 N. 3rd St.
The city expects to receive nearly $2 million in Community Development Block Grant (CDBG) funds; $481,295 in Home Investment Partnerships money; and $160,887 in Emergency Solutions Grants funding.
Harrisburg City Council has approved a tax and revenue anticipation note (TRAN) in the amount of $4.5 million.
A TRAN is a form of short-term borrowing that municipalities often issue to cover lean revenue periods, allowing the city to pay its bills in the event of a cash shortfall until property taxes and revenues begin to roll in. In Harrisburg, for instance, cash flow often is weak until late March, when people begin to pay their city property taxes.
The TRAN will cost the city a $1,500 legal fee, but no commitment fee.
Last year, the council authorized a $2 million TRAN with a $10,000 commitment fee and a $5,000 legal fee. Ultimately, the city did not draw on the TRAN at all.
The city last month demolished the Riviera Hotel, a dilapidated bar and rooming house at the corner of 6th and Kelker that rapidly deteriorated after a 2010 fire and recent series of collapses.
Dave Patton, codes administrator for the city, said the demolition work was bid out to Swatara Township-based Arney Brothers, Inc., for $24,549.
Patton also said the owners of the Riviera, Marion and Diana Nicklow of Hershey, have agreed in court to a plan to pay back the city for demolition costs.
The demolition concludes a troubled run for the century-plus-old Riviera, a three-story yellow brick building with faded, blue-gray paint on the window trim and the first-floor façade.
County property records show that the Nicklows purchased the building in March 1999 for $80,000. They filed for bankruptcy protection in 2009 after defaulting on a business line of credit for the Riviera and a mortgage on a separate property, according to court records.
The building was condemned in May 2010 following a fire, Patton said. Nonetheless, Patton said he recently discovered a homeless man living on the second floor, who had gained access via a fire escape.
Berryhill St., 2110: Secretary of Housing & Urban Development et al to D. Murphy, $43,200
Chestnut St., 1722: M&T Bank to J. Palmer, $47,000
Derry St., 2426: J. Fleck to S. Rimal, $32,000
Fulton St., 1715: Secretary of Housing & Urban Development & Michaelson Connor & Boul to J. Leh, $60,000
Green St., 920: P. Wambach to C. Korinda, $126,000
Green St., 2015: WCI Partners LP to J. Blouch, $205,900
Green St., 2932: R. & E. Schwab to J.A. Hartzler, $65,000
Hale Ave., 421: R. Consoli to K. Nguyen & N. Ho, $69,900
Holly St., 1915: H. & K. Bey to E. & C. Smith, $73,000
Howard St., 1354: F. & L. String to NF String & Sons, $40,000
Industrial Rd., 4230: J. Niebauer Jr. to Cottage Real Estate LLC, $2,175,000
Luce St., 2365: R. & K. Stouffer to T. Nguyen & T. Mai, $37,500
Penn St., 1419: M. Rudy & M. English to N. Myers, $135,500
Reily St., 227: K. Kuss to R. Mundy, $166,000
Rolleston St., 1025: F. & E. Wonders to M. Jimenez & G. Abreu
Rose St., 925: S. & C. Hahn to D. Niles, $67,000
N. 2nd St., 2229: Aurora Loan Services LLC to P. & C. Ambrose, $32,500
N. 3rd St., 1219: C. Carson et al to T. Kelley, $70,000
N. 5th St., 3006: J. Hudock Jr. to C. Stockard, $66,000
N. 17th St., 98: Willow LLC to D&F Realty Holdings LP, $40,000
N. 18th St., 911; 1644 Market St.; 629 Wiconisco St.; 2040 N. 4th St.; 327 Peffer St.; 1831 Boas St.: Shokes Enterprises to JDP 2014 LLP, $433,000
Reily St., 227: K. Kuss to R. Mundy, $166,000
S. 13th St., 932: South 13th Street Properties LLC to Agree Limited Partnership, $1,783,000
S. 24th St., 706: B. & C. Shadle to M. Cornelius, $38,000
S. 25th St., 430: J. Wright to C. Munoz, $83,900
Verbeke St., 234: Centric Bank to J. Dixon, $120,000
Vineyard Rd., 218: R. & B. Seaton to S. & J. Clark, $199,000
Waldo St., 2641: P. Proctor to S. Clark, $30,000